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Why you can’t do great financial planning without cheesecake

Why you can’t do great financial planning without cheesecake

It’s really important to open your client’s eyes to the concept of time.  And as great Lifestyle Financial Planners, it’s crucial that we instill a sense of urgency in our client’s mind so that they can get their plan built and crack on with enjoying their ‘what for?’  Personally, I find cheesecake helps.  Let me explain.

Time and health are your client’s biggest assets

When I’m working with clients and I ask them to run through their most important assets, they always mention their house first.  Then pensions, savings and investments.  Yet they always ignore their 2 most important assets:

  • time
  • health

You can’t quantify health.  Hopefully you have it, but it can be taken away at a moment’s notice.  It’s therefore linked to time.

But we can quantify time.  Everything else is meaningless without it – you can have all the money in the world, but it’s irrelevant if you have no time.

So, I always ensure that ‘time’ and ‘health’ are included as assets on the whiteboard – written at the top and in blue (to show how important they are, and that they are even more important than all the other ‘stuff’).

And when I try and quantify time with a client, I always ask them how long they think they will live.  99% of the time, they will begin to recount all of their relatives who have lived to a ripe, old age – completely ignoring any relatives that have died young.  Their mind is selling them the story that they want to hear – that they will live a long time.  It gives them comfort.

The problem with assuming you’ll live for a long time

The more time you think you have, the less urgency you feel.  It’s a classic scenario – whenever you’ve been given a long time to do something, it’s likely that you left it right until the last minute.

And then there’s the important distinction between life expectancy and active life expectancy.  It’s no good planning your ‘for what?’ up to the age of 90 if, for the last 15 years of that time, you’re going to be slowed down and possibly unable to do the active things that you want to do.  So we need to be thinking in terms of active life expectancy.

Why we need to instill urgency

It’s really important to instill that sense of urgency – it’s what makes us change our lives and the things that we do on a daily basis.  If you had 3 months to live, would you be doing today what you are currently doing?  I doubt it.

We need to get our client’s to stop seeing the future as a different place.  After all, today is yesterday’s future.  Our job as financial planners is to instill urgency into our client’s minds so that they feel the urge to crack on and get their fantastic financial plan built – then they can actually enjoy it.  That’s the point.

3 tools to help instill urgency

There are 3 types of tools that help to instill some urgency – we either use a visual cue, an emotional cue or a practical cue.

1.The visual cue.  I often draw a chart on the whiteboard – a grid with 90 boxes.  Each box on the grid represents a year of somebody’s assumed 90-year life.  I mark a ‘x’ in each box, up until their current age, and also in the last 15 boxes (representing their likely ‘inactive’ years).  Imagine your client is 54.  Once you’ve marked the first 54 boxes, and the final 15 boxes, your client can see that there are only 21 empty boxes left – it looks a bit scary.  There’s not much blank space left.  Your client can see how much time has passed and how much time is left to live.  And remember, 90 years is very much a ‘best case scenario’.  It instills a sense of urgency.

2. The emotional cue.  Sometimes, I use a time focused chart.  We look at how many years your client has left (let’s assume 21, as we did above) and we go back 21 years to remember the key events in that year.  We use a list of the biggest stories from each year – the biggest pop records, news stories, celebrity deaths – and we take the client back to see what jogs their memory.  And when you do this, the event they recall always feels like yesterday to them – it gives time some context.

When I do this exercise on myself, it takes me back to 1995.  Oasis and ‘Don’t look Back in Anger.’  I remember exactly what I was doing at the time – it has emotional connotations.  I remember being in the back of a Vauxhall Nova doing a 7-hour journey to Newquay with my best friends, trying to find a barn rave.  But it feels like yesterday.  Yet the time that has elapsed since that album is the time that I have left.  Again, it’s a bit scary and instills some urgency.

3. The practical tool.  And finally, if none of that works, you bring out the cheesecake.  This is where you put a practical counter on things – something that they do periodically, (like a holiday, visits to certain people etc.) and you count how many of those they have left.

For me, I use cheesecake.  There’s a big agricultural store where I live and, occasionally when I’m in there, I’m tempted by the delicious big chunk of homemade farmers cheesecake that they have in the cafe.  Around twice a year, I’ll cave.  I’ll sit down with a cup of tea and enjoy that big chunk of cheesecake.  When I look at my chart, that’s only 42 pieces of cheesecake.  And that doesn’t sound good.  Again, it makes me realise how little time is left.  It gives me that sense of urgency in everyday life.  Each time you do something, you realise time has passed since the last time you did it – time is finite.

Hopefully you’ll find those tools useful because, when you think about it and you’re trying to work out what’s more important between time and money, nobody ever dies wishing that they had more money.

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