TIME: JANUARY 2006
The Rest of Your Life
Planning isn't only about finances. It's also about your search for meaning
Money-and how much of it you have saved-is usually the first thing people think of when they plan for retirement. But planners these days look beyond finances and ask instead about a client's dreams for the future. In a new book, The Number: A Completely Different Way to Think About the Rest of Your Life, Lee Eisenberg explores how you can shape your financial future so you will be able
to achieve and afford what you value most. We offer an excerpt:
Feeling at times like the angel of doomsday, I travel the country asking men and women: Are you saving enough money? Are you properly invested? Do you have a number in mind-the amount you'll need to see you through inflation, health-care costs, the inevitable surprises that will visit your next 30 years? Answers take the form of blank stares or silence, as if to say, "Please, can't we talk about something else?"
Most people admit they're unprepared. Surveys report that 40% of Americans are saving nothing for retirement. Fewer still have gone to the trouble of assembling a financial plan, despite the megamillions spent by financial-services companies eager to explain how complex and daunting our post-career lives will be. Financial consultants feel as if they're whistling in the wind, lamenting that their same-old, same-old message-save! don't spend! plan now!-is widely ignored. So many advisers are changing their approach, talking less about money and more about meaning: how financial planning can address a person's deepest hopes, dreams and fears about the future. For them, the name of the game is life planning.
Life planners, qualified ones at least, operate on a set of assumptions different from those of traditional number crunchers. Life planners believe that you need to do some soul-cleansing, trudge through the muck of self-examination, before you can build a money plan that will guide you through an emotionally and materially secure second half. So put down the calculator for a moment, they suggest, and start with some tender inquiries into why you're not getting your financial house in order. Could it be, say, that your shopaholism stems from a lack of, well, confidence? That you need stuff to prove your self-worth? Or-only probing here, mind you-you say you're tired of the rat race, but what you really mean is that you're hungering to make a difference in the world, to give back something truly meaningful? To get clients thinking about these things, a good life planner needs sharp listening skills, instincts that tell him when to probe and when to bite his tongue. A responsible life planner needs to respect the line between enlightened financial counseling and pretend psychotherapy, which can be dangerous for all involved.
Like traditional financial advisers, life planners aren't licensed. Want to be one? Just hang out a shingle, or add life planner to a business card-which is what a lot of financial consultants are doing these days. Life planning is no longer on the fringes of the advisory industry; it has entered the mainstream. A recent Wall Street Journal story reported that such non-New Age firms as Citigroup, Wachovia and Ameriprise Financial, among others, have begun to add life-planning skills to their financial consultants' training sessions. The newspaper quoted a financial planner from a big firm: "We need to give clients a sense of security so that they are willing to share with us things they don't want to tell other people," adding that she sometimes "feels like Barbara Walters."
If there's a founding father of the legitimate life-planning movement, he's Jacob Needleman, a philosophy professor at San Francisco University who wrote a book called Money and the Meaning of Life, published in 1991. The book is a journey through the lessons of King Solomon, the moral and economic teachings of the early Christian church, and chock full of money-related references to everyone from the Donald to Dante. Needleman's aim is to get us to understand what lies beneath our love-hate relationship with money and the relentless quest to make and spend as much of it as we can, unaware of how it might be messing with our heads.
Needleman contends that money begins to tie us into emotional knots even as we're learning to tie our shoes. To illustrate, Needleman recounts a boyhood incident: he visits a rich kid in the neighborhood, whose playroom is filled with neatly arranged, shiny toys. Among them is an elaborate model train set-bridges, tunnels, a locomotive pulling a long line of gleaming cars. Young Jacob is beside himself with excitement-but he notices that the rich boy seems sad and disengaged. When Jacob returns home, he looks at his own cheap and mostly busted train set. At this moment two thoughts collide. One is how much he envies that kid; the other is how empty they both feel. Neither is a happy camper. How can money cut both ways?
Needleman's book proved an inspiration to a small group of financial planners, who in 1993 assembled a free-form think tank called the Nazrudin Project. Nazrudin was a legendary mystic who, in the words of the group's leading disciple, "upended people's blinkered, conventional ways of thinking and forced them to look at themselves anew." The Nazrudins began to get together for weekend bull sessions in pastoral settings, sitting around the campfire, debating their clients' financial bugaboos. Why does money make us nervous? Why do we lose love and friendships over it? Why do we work so hard to get it and then fritter it away? Why don't we spend it on things that matter? Oh, and by the way, what does matter?
The Nazrudins concluded that a truly sound plan, a retirement plan, say, can't be built simply around how much do I need?-a national obsession now that the baby boom has reached 60. The better question is: What will bring me satisfaction and joy, how and when can I get there-and what will all that cost me?
The man who gave Nazrudin its name and mission, and who remains life planning's guru-in-chief, is George Kinder (rhymes with "tinder"). Now in his late 50s, Kinder grew up in a small town in the Midwest. He went off to Harvard, where he majored in economics, but found greater meaning in classic literature and philosophy. Eventually he chucked academia, moving to a Massachusetts farmhouse "to live a life of spiritual practice and writing." This life plan struck his parents as an enlightened pathway to material nowhere. His mother suggested that he try accounting. For the next 13 years, Kinder worked as a cpa, building a broad base of clients in Cambridge whom he attracted with flyers he attached to windshields on frosty mornings. Now and then he found himself counseling a client on an emotional issue, and locals began to refer to him as "the tax therapist." In time Kinder fell under the sway of the questions posed at Nazrudin retreats.
Kinder still maintains a planning practice near Harvard Square. He also spends time on [the Hawaiian island of] Maui. But mostly he's intent on turning old-style financial planning inside out. For Kinder, life planning isn't a flaky version of financial planning-it's where the profession needs to go, "financial planning done right," he flatly states. A few years ago, he established the Kinder Institute to train traditional planners to be more empathetic, to ask the right questions, to remake themselves into "torchbearers" who can help light the way for clients who need to figure out what they really want out of life, then build a financial plan to make it happen.
Last fall I attended one of Kinder's three-day workshops, a memorable stop on the angel-of-doomsday tour. There, in a room filled with 90 straight-laced financial advisers, Kinder staged his signature training exercise: the Three Big Questions. Kinder claims that he asks himself these questions several times a year as a way of staying focused on his personal priorities.
Kinder instructed the planners to write their answers down, not just think about them. He introduced question No. 1: "It's a fun question," he said calmly, a gentle smile on his face. "Assume that you've got all the money you need. Maybe you're not Warren Buffett, but you'll never have to worry about money again. The question is, What would you do with it? How would you live? Think for a moment, then write the answer down." Instantly the room filled with the sound of scribbling.
Next question. "You go to the doctor, who discovers you have a rare illness. He says that you're going to feel perfectly fine for the next five years, but then the illness will prove fatal. It will come suddenly, causing no suffering. The question is, Now that you know that your life will be over by then, how will you live it? What will you do?" The planners stare off into the distance for a short time, then start scribbling, less furiously than before.
The final question. "You go to the doctor. You feel perfectly healthy. Again the doctor explains that you have a serious illness. But this time the doctor says, 'You have only 24 hours to live.' What did you miss? Who did you not get to be? What did you not get to do?" The room was silent. After a while, each planner jotted down a phrase or two.
Kinder says that he has been asking these questions for years and that there's a consistent pattern to the answers. The first two questions yield answers that mostly have to do with material things: beach houses, sports cars, golf courses. The third question, however, is almost always answered qualitatively: regret over broken relationships; giving too little back to the community, the planet; an unfilled desire to write the great American novel.
It's in a client's answer to the third question, Kinder says, that an adept life planner-one who's rigorously trained and knows what he's doing-can begin to zero in. It is right here, in the funding of what should have been, that a worthwhile financial plan has its beginning and end.
From The Number: A Completely Different Way to Think About the Rest of Your Life. Copyright by Lee Eisenberg. Printed by permission of Free Press, a division of Simon & Schuster Inc., New York.