Author: Derek Hagen, CFA, CFP®, FBS®, CFT-I™
“Those who have a ‘why’ to live can bear with almost any ‘how.'” -Frederich Nietzsche
Many people are familiar with this famous quote from existential philosopher Frederich Nietzsche (although it’s often misattributed to Viktor Frankl). When we hear the quote, we often think of the “why” piece. It reminds us that it’s crucial to have direction in life. It is important, of course. Having something worth doing with our time is essential for a meaningful life.
It’s less common, though, for people to focus on the “how” aspect of the quote. The “hows” of life don’t often get talked about in the context of meaningful living. What Nietzsche calls “how,” many of us call “life,” as in, “life happens!” (or its less PG version…).
Even fewer of us think about the relationship between “hows” and “whys.”
Applications to Life
What I think about when I hear this quote is that life can toss us around. It can seem like nothing goes as planned because so many things are outside our control. It’s like boxer Mike Tyson famously said, “Everyone has a plan until they get punched in the mouth.” Similarly, Simon Sinek says, “Always plan for the fact that no plan ever goes according to plan.”
The best thought-out plans never play out like we hope. Life throws us curve balls, and it can feel a bit like we’re being tossed around. This is what Nietzsche referred to when he talked about the “hows” that happen to us.
And yet, no matter how bad life tosses us around, having a “why” helps us reorient to where we want to go. It’s like being able to find our North Star, even in the fog.
Research shows us that some stress – if it’s the right type and amount – is good for us. It helps us overcome challenging transitions and helps us achieve complex goals. Reframing our perspective around stress and challenges can lead to more fulfillment.
Changing our expectations about these unexpected events can change our relationship with them. It allows us to help our clients navigate life’s challenges as well.
True Wealth Planning
Money Quotient’s True Wealth Planning process is designed to do just that. It’s designed to help financial professionals help their clients uncover their “why” so that they will be more resilient in the face of life’s “hows.”
The process recognizes that our clients’ vision will be most effective if it’s aligned with their values and the things that bring them satisfaction. It helps us understand that clients’ values are determined by their unique history. Finally, it changes our clients’ expectations that the only constant in life is change.
You may be familiar with this image:
This is part of the logo for MQ Research and Education (our 501(c)3 sister organization). What you may not be familiar with is that each of these lines represents a different aspect of your clients’ lives. We call these inquiry categories:
- Satisfaction and Values
- Biography
- Transitions
- Vision and Goals.
Satisfaction and Values
Your client’s “why” is built on a foundation of their values and the things that bring them satisfaction and contentment.
The True Wealth Planning process helps clients become more aware of their level of satisfaction in various areas of their lives.
You also help clients understand what’s important to them by helping them articulate their personal values. Values are different for every client; they help clients know what matters, has worth, or makes sense.
Biography
Understanding a client’s history is important to help us understand a client’s unique frame of reference, beliefs, behaviors, and money scripts. More importantly, it raises the client’s awareness of the origin of their perspective and habits. With this self-awareness, they can mindfully choose to modify their behaviors to reach their goals without feeling a loss of autonomy.
The Biography inquiry category is built on the fact that we are shaped by what we’ve experienced, and those experiences will impact how we think about our lives today.
Vision and Goals
The Biography and Satisfaction/Values categories help clients understand who they are and what they value. With this in mind, the Vision and Goals inquiry category gives clients something to aim for that aligns with what’s important to them and will bring them value. The process helps clients craft a vision of the future that is meaningful to them. They’ll be able to articulate what they want AND why they want it.
We live in a world of too many choices, and having direction helps clients move forward. This can be quite motivating because it represents their “why” that will guide them when they experience life transitions.
Transitions
The Canadian rock band Rush has a song called Tom Sawyer, where they sing: “Changes aren’t permanent. But change is.” Change is the only constant in life. Change is Nietzsche’s “hows.”
Life changes are called transitions, a psychological process that people go through to come to terms with their new situation. Transitions can be expected and good, like getting married or having a child. Or, they can be unexpected and difficult, like the unexpected loss of a loved one. Regardless of the type of transition, most have a financial tether that would benefit from proactive planning to provide both practical strategies and emotional support.
Transitions are good for us to know about because most transitions have a financial tether that we can help plan for.
Although we can’t stop the fact that change is inevitable, we can better anticipate and prepare for it. Our relationship with change has a massive impact on the decisions we make post-change.
Virginia Satir famously reminded us, “Life is not how it’s supposed to be. It is the way it is. The way you cope with it is what makes the difference.”
Guiding Clients to True Wealth
Money Quotient guides financial professionals on how to facilitate these conversations with clients. The True Wealth Planning process is a multidisciplinary approach, utilizing aspects of positive psychology, the stages of change, empathic listening, Motivational Interviewing, self-determination theory, coaching, mindfulness, and adult learning, among others.
The process goes through five stages, sometimes called the 5-E process, to effectively guide clients toward meaningful living. You may be familiar with the following image, which highlights the stages.
At the core of the True Wealth Planning process is the focus on both Intelligence Quotient (IQ) and Emotional Intelligence (EQ), collectively called Money Quotient (and our namesake).
The IQ component represents the practical knowledge. It’s the mechanics of money and our strategies and tactics. It’s sometimes called exterior finance.
The EQ component represents emotional intelligence and awareness. It’s how we are with clients, communication skills, and understanding how clients relate to money. This is sometimes called interior finance.
The MQ component represents a combination of facts (IQ) and feelings (EQ); when we focus on both components, we help clients achieve well-being.
Explore Stage
The first stage of Money Quotient’s True Wealth Planning process is the Explore stage. Here, we are ensuring that we are a good fit for the client and that the client is a good fit for us. We strive to understand the client’s main issues and concerns. At this stage, we’re starting to build trust.
Early in the process, you cover a lot of ground, but it need not (and should not) be daunting because you’re not delving deep into any topic at this stage. We’re going broad but not deep. This early engagement helps differentiate you from other financial professionals because you’re not simply collecting financial data but learning more about the client’s whole life, showing that you are a life-centered professional.
Engage Stage
Once the client has decided to hire you, you’ve entered the Engage stage. In this stage, you’re starting to identify and clarify your client’s true values and priorities. You want to understand where the client is now in several areas of life and the journey that got them to where they are. This helps you understand their unique perspective and how to best communicate with them.
At its core, when engaging, you’re painting a picture of your client’s current reality, or point A.
Envision Stage
In the Envision stage, you’re helping the client create a vision for the future that feels fulfilling to them. The vision includes everything that is important to them and everything that contributes to their life satisfaction, contentment, and happiness.
From there, you help the client define personal and financial goals that align with their vision.
Think of this as your client’s point B.
At this point, you’ve started to go deeper into various aspects of the client’s life to help them ensure they are using their time and money in ways that will contribute to their overall well-being.
Enlighten Stage
In the Enlighten stage, you put together recommendations for the client to reach their vision. As part of the process, you’ll summarize what you know about the client’s values, priorities, concerns, upcoming transitions, and objectives. This helps the client feel understood.
Now that they feel heard and understood and have increased their self-awareness, you can offer strategies to reach their vision.
When presenting your plan, you show the client how each recommendation supports their vision.
Empower Stage
Once you’ve guided the client this far, they feel empowered to take action. They’ve now seen the connection between your advice and their life vision, which intrinsically motivates them to implement it. During implementation, your client can ride the motivational wave you’ve helped them create.
Unanticipated events occur in life, and priorities shift with unexpected events. Thus, it’s important to regularly review your client’s True Wealth Plan.
By guiding clients on this practical, repeatable process, you can help clients create a vision for their lives that makes dealing with the unexpected nature of life easier and more tolerable.
Want to Learn More?
Money Quotient trains financial professionals in the True Wealth process and helps them implement the concepts into their practices. The first step is to learn about the Fundamentals of True Wealth Planning.