Wouldn’t it be nice if money came with a user manual or a road map? Well, here it is, folks. You have asked and the financial planning powers that be (or at least the folks at Bloomberg BusinessWeek) have answered. Click here for the Financial Planning Flowchart.
For the Do-It-Yourselfer in all of us, this fun, interactive chart is a great tool. But like any tool, it’s not right for all people and in all situations. Heck, you can downright hurt yourself with any tool in the wrong hands. (Just ask my wife about the great job that Steve “Mr. Fixit” does around the house and office).
Reading the comments at Bloomberg BusinessWeek to this, you’ll see how even a team of experts in financial planning and including a professor of the subject have not been able to cover everything in this map. Issues like Long Term Care Insurance (LTC) or student debt or elder care are not covered for example. There’s no mention about life-altering events like divorce or death of a loved one. But there’s no wonder about that.
Financial planning is not black and white. And trying to anticipate the myriad of financial issues and choices that a person may face throughout a lifetime is a Herculean task. But the panelists do an admirable job and for those with no other background in finance or those who don’t have the time or inclination to delve into these matters, this really is a neat primer.
I will say from experience that given the complex nature that most of us have with money – we are either coming at it from a place of “abundance” or from a place of “scarcity,” for example – that as helpful as this road map is it is difficult – if not impossible – for any one chart, process or program to answer all questions neatly, quickly and succinctly – especially in all cases.
There’s a joke that says if you ask twenty weatherman about tomorrow’s weather, you’ll get nineteen different predictions. We have over three hundred million people in the US. Attitudes, experiences and emotions about money are different for each. And when it comes to money, all of us left-brained analytical financial types are playing to the right-brained emotions of our prospective clients. There’s bound to be something lost in translation.
I tend to joke that I live and work in the “grey zone” (though with three kids under age 4 I’m surprised that I don’t personally have more grey hair). My home is grey. The color of the car I drive is grey. I think that this is just a reflection on the types of solutions available for the situations I deal with when working with clients.
Besides platitudes, there’s nothing black and white about finances. Sure, we know the old saws: Spend less than you make, borrow for college because you can’t borrow for retirement, neither a borrower nor lender be. When push comes to shove and you’re sitting across from a client asking about specifics, you’re not likely to have the same solution for the same reason for each person. (If you’re a one-trick pony, maybe you’ll offer a pat solution. As the other old saw goes, to a carpenter all problems look like a nail. But then you’re not really a skilled craftsman because a good carpenter has lots of tools in his bag just as a good financial advisor should too).
While you can do almost anything yourself (except brain surgery on yourself, I’m thinking), there’s a role for a competent guide through the wilderness of money. You just have to find that trusted guide who can take all this stuff and make sense of it for your particular situation and recognize that he/she is not perfect since the people, process and certainly the tax laws themselves aren’t perfect either.
