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Financial Planning Done Right

Summary

How can you create a financial plan before you know where to aim? Your unique goals in life, what drives you, what you want to accomplish and what’s truly important - those are the targets. Not simply “retire someday”.

You don’t have to read a ton of self-help books or try to discover this on your own. There is a process that has been refined by the Kinder Institute of Life Planning to help individuals and couples discover their most important desires and how to live the best life possible.

Brad Tafoya is a Registered Life Planner, CPA, and CFP who leads clients through this process. I met Brad as a trainer at the Kinder Institute.  He joins the podcast to discuss how and why this is so important and how you can apply it yourself.


Our discussion includes:

  • Why the process of figuring out what is truly important to you comes before the technical stuff: budgeting, accounts, portfolios, investing, etc.
  • When you discover what fulfills you, it creates massive energy that empowers you to effect change in your life.
  • The 3 questions that are at the core of the process for discovering what truly matters to you
  • How to use what you discover to create a vision and overcome obstacles

This is financial planning done right.

Resources:



Photo by Markus Winkler on Unsplash


Transcript

Mike: [00:00:00] Welcome to financial planning for entrepreneurs and tech professionals. I'm your host, Mike Morton, charter financial counselor and financial advisor. And today's topic is a little bit different. Then some of the things we typically discuss on this podcast, usually we're diving into strategic planning opportunities, which accounts to be saving froth, traditional, maybe tax planning, opportunities, insurances, you know, tips and tricks and strategies.

Today is taking a step back and looking at the bigger picture. And what I feel is a more important picture. Why are we doing all this to begin with? What is the purpose?  In financial planning, this might be goals and discovery trying to figure out, okay, what are we trying to reach? And of course your typical thing that comes to mind is retirement.

I want to retire, right? I want to retire and stop working someday. But what does that mean?  What do you want to do? What are you passionate about? How do you want to live your best life? And that's what today's topics all about. And with me today, I have a special guest super special to me, this is a Brad Tafoya

he is a CPA, he's a certified financial planner. And the most important part to me is that he is a  trainee at the kinder Institute of life planning. And I had the opportunity to recently go through a couple of their trainees and continue. My education, personal development and training. And Brad was one of the trainers there helping me and others through that process so far.

And so Brad, welcome to the show. It's great to have you. 

Brad: [00:01:34] thanks, Mike. It's a,  privilege and an honor to be here with you. Happy to talk about this stuff.

Mike: [00:01:39] fantastic. So today, as I mentioned, we're going to be talking about. Planning your goals, what you're passionate about doing what you want to try to accomplish in life. And these are sort of the softer subjects, right? Not so much the tips and tricks and strategies, but it is more important than all the other stuff.

Cause if you don't know what you're aiming for in life, How are you ever going to get there? Now I mentioned the kinder Institute of life planning, and to be honest Brad, I hate the word life planning. It just turns me off. Now I understand what's underneath it and what we're going to talk about today, but 

when I say life planning, how do you explain that to people that haven't heard of that before? 

Brad: [00:02:23] yeah, Mike, you know that, that's a great question. And to be honest, I struggle with the name, life planning myself a little bit. So I typically. Refer to it. It's financial life planning, it's a cross of between financial planning and life coaching. But to really try and explain the process, this is what I tell my clients.

And that is helping people figure out how to live their best lives to live their most fulfilled lives. And we have a process where we take clients through to help them do that. And our process is to find everything that's important to them.  Because it all revolves around money, energy, talent.

And so we have to know what's important. First, once we figured out everything that's important, . Then we have a process where we take clients through to help them really figure out what the priorities are. What's their most important things to live in that fulfilled by it. As soon as we've done that, then the next step is to say, okay, now that we know what your priorities are, what are the things that could get in the way of accomplishing those priorities?

 And once we've determined what those things are, what could get in the way, then we help them find their own solutions that empower them, engage them and give them the energy to make change. After we've done that then, and only then do we take a look at the finances and we build a financial plan that has those elements, all of the things that are important to them, those priorities, the solutions to things that might get in the way that is the foundation of their specific financial plan that is tailored to them and their financial needs.

And again, with that backdrop as the foundation. So in a sense, that's life planning.

 Mike: [00:04:00] It's that simple. That's amazing. Brad, I loved how you. Just simply broke that down. What are all the important things? What is the most important things to live a fulfilled life, which is going to be very different for everybody. And then how do we get there using our limited resources?

Because we all have limited resources of time, energy, money, and how do those combine. To empower you to move forward and just have that awesome life that you're looking forward to. 

Brad: [00:04:36] Yeah, totally. And there's so many times people think that things that they want or need that are important to them don't have anything to do with money, but they do. Because again, it's all a trade off, you have these things, you have your time, your energy, your resources, your money where are you going to apply those things?

And it's all driven by what's most important to you and trade-offs, and so if you don't know what your highest priorities are, How can you apply those things appropriately?

Mike: [00:05:02] absolutely. Now I'm going to share one other quick story. Before we dive into more details along what you've shared, I've gone through some of the training, some of this life planning, some of these questions we're going to get to today. How do we go through this? And I'd love that there is a process I'm going to ask you about that.

But I, by going through this, I thought, oh, here's what I want to do next. Or here's where I'm headed or, the typical kind of retirements and the kids, through college these money questions. But as I went through these particular questions and went through this process, I discovered things about myself.

I didn't even know were there. And that's what's truly amazing. I went through the training so that I can bring this to other clients the same way Brad does and other registered life planners bring this to clients. And I discovered things about my passion around entrepreneurship, my passion around small business, doing a startup.

Treating my business as a startup and growing it and bringing this life planning to more people all through this process. So it's just been amazing for me. And that's the big reason I'm excited to have Brad on the show and introduce this topic to my listeners.

Brad: [00:06:09] that's awesome, Mike.

Mike: [00:06:11] Now   the other thing that I really liked, Brad, is that there is a process. So that was my first question   do people have to read a ton of self-help books and do lots of introspection or go on retreats to, start figuring these things out? How do they go about it?

Or, like you said, the kinder Institute has a process, that we can take people through that  takes time, right? But it doesn't have to be aimless. there is a specific process that we can go through to get there. 

Brad: [00:06:36] Okay. Yeah, definitely a specific process. And it definitely takes some time and some energy, but it is more than worth it. And as you said, we find the clients often find things that they didn't realize how important they were to them until they go through this process. 

If a client doesn't really understand how something might be really, truly important to them, or they've pushed that to the back because I think other things are important then how can they truly plan their life and how can they truly plan their financial lives if they're not paying attention to those . Things.

And yes, we have a process that helps all of this come to the forefront.

Mike: [00:07:10] I couldn't agree more. It's so funny. I'm just sitting here nodding my head because. Every client that comes in and Brad, you're probably the same. It's all about the money in motion about, should I save in this account here? How am I going to save for retirement? Am I saving enough? Is it Edo, which I do for insurance or estate planning?

It's all of these typical, I'm using the air quotes here of financial planning. And how do you begin answering those questions without understanding what's important. And again, whenever I ask a client what's important, I want to retire at 55 or 60, or I want to  travel more. Those are always the first answers.

But that's not  truly what people want. If when you take just one little step deeper, you'll  discover a wealth of things and we'll go more than just one step deeper. 

 Brad: [00:07:53] Yeah, we'll go a lot deeper as you know.

Mike: [00:07:55] all right, so let's dive into it. Describe to me again, briefly, you talked about  at the high level,  is this going to take hours? Are there multiple meanings? Tell me the high level process before we maybe dig into some of the specifics 

Brad: [00:08:08] Yeah. I would typically suggest that the process that we're going to talk more about the life planning process. If you will, that happened over at least two, probably three meetings. And each of those meetings can be anywhere from an hour to two hours each.

So, Before you even get into the financial piece, we're talking five, six hours. But as having gone through the process yourself and you  just attest it to it is so worth it. 

Mike: [00:08:33] Yeah, I mean, five or six hours to discover what's truly important to you and what you want to move towards. And we're going to do it. in six or 12 months, start taking those steps right away. That's a no brainer.   Okay. So the first thing is, truly the breadth of what is.

  Important to you, all the things that are important to you. So I'm going to read through the three questions. One at a time, Brad, these are George kinders and the kinder Institute of life planning. This is his classic three questions. Now there's a lot more material and a lot more to life planning.

I discovered these a few years ago, even before I was introduced to the Institute and I was like, oh, these are great. And I started using them completely wrongly in my practice. That's okay. We, get better as we go. But I've been using them and discovering how powerful they are. And now that I know more the meaning behind them, and that's what I want to ask you, Brad, today is  what are we truly trying to use them for?

Okay. So this is the process, these three questions that go from the broad, what is important to you to getting a little more specific and more specific to get to what's truly critical in your life.  All right. Here's the first question I want you to imagine. That you are financially secure, that you have enough money to take care of your needs now.

And in the future, the question is how would you live your life? What would you do with that money? Would you change anything? Let yourself go. Don't hold back. All your dreams. Describe a life that is complete. That is richly yours. I love that question, Brad.  Everything starts coming up right away. All the things that would be so fun to do. So what are we trying to get to when we're asking this question or when people are exploring it on their own and 

doing this 

Brad: [00:10:18] Yeah. Great question, Mike. And I'll start by talking a little bit about how we got to this question first. And that is the first meeting with a client is a way different meeting than they've ever had in their life. They come in and we simply ask them, why are they here? And we've listened.

And we just let them talk and we let them talk for an hour and a half. We find out everything in that first meeting that's important to them. And what we're doing there is we're setting up the stage to let them know that they're in a different place. We're creating a safe, confidential container for them to step into.

So often in our lives, we don't take the time to sit down and think about what's truly important to us. We may think about it up in our head. And let us spin around and spin around, but we don't ever really give ourselves the time or the permission to really put them down on paper. And that's what this process does.

So we start by creating that safe container by listening. And then we get into this question and by the time that the client has gotten to this point and we've listened to them, but maybe for the first time in their lives for an hour and a half, really finding out what's important to them. And then they answer this question, they just take off and the stuff that comes out.

Is everything you can think of, a second home quitting their jobs , but  what it does though, is it really starts to get down to the things that are important in their life. Spending more time with family spending time with their kids, spending time with friends, traveling it just opens up so many different avenues and reminds them of the things  that have been important to them.

Maybe even something like they've always wanted to learn how to play an instrument, but they didn't feel like they had the time. Or the talent and now that they have all the money in the world and time, maybe they could learn how to play that instrument. And so it's all these little things that come out of that just to paint a beautiful picture.

Mike: [00:12:07] I love what you said around giving the client time to explore this. So if someone's doing this on their own and writing just literally taking the time to go through it, or when we do it with clients sitting down and just listening, because as you said, you're going to start with the typical stuff, but I loved when you said having the time to learn a new instrument, I never thought that was a possibility.

And so you wouldn't, you're just not going to say that, but if you're given the space, you'll find that, oh yeah. First I want time. I want to travel. All right. What are you going to do? I'm going to go see places. Okay. What are you gonna do there? It's just, you keep going. And when you have an hour and a half to just literally spit out everything that you're interested in accomplishing stuff comes up that wow.

If I had the time. Yeah, I would do this and this. And then suddenly you say it out loud and you feel it's whoa. Yeah. that was important. 

Brad: [00:13:00] Yeah. It's really about giving people not only the time, but the permission to dream big, because so often when we don't get that, we don't give ourselves that permission and wonder. When somebody has given that permission beautiful things happen. And we get to facilitate that and it's just a complete joy watch.

Mike: [00:13:16] The permission to dream big. Love it. All right. So this is where we start the breadth, the getting out, ah, just a ton of potential material, things that are really interesting to you. Along a wide range of topics. And now we start diving into what may be. More important, which areas are going to be more important than other areas.

So I'm going to read question number two, as we continue on this process, this time you visit your doctor, who tells you that you have five to 10 years left to live? Yeah. Or is it you won't ever feel sick at the bad news is you'll have no notice as to the moment of your death. What will you do in the time you have remaining to live? Will you change your life and how will you do it? ,   as I think about having a limited timeframe now, five to 10 years, obviously, things immediately. Coming to focus even though five or 10 years. you know, It's got some time, but , that's going to be here tomorrow. And so now to immediately focuses  what is important, Brad?

I assume that's the point of getting to this question? 

Brad: [00:14:32] Totally. We've opened them up.  In a way with the first question and the first meeting of listening we've  let them dream as we talked about dream big. And now we're saying, okay, Now, you've got five to 10 years.

You've given them all this stuff. Now you've got five to 10 years. What is it that's really important. How are you going to accomplish all of those things? And that's where the priority start to really fall out. And you start to see some real recognization that something that somebody thought they needed to put off 10 or 15 years.

No, they need to have that now. When they suddenly realize that they have five to 10 years left live.

 Mike: [00:15:05] can imagine Brad, you've been doing this for a while. That's  exactly. When you said I've been putting this off. Isn't that what we all do with basically all of our dreams. It's always look down the road. I can't wait till, we say that how many times a day I can't wait until, and this suddenly is like, whoa,  I gotta do this now.

Right? 

Brad: [00:15:23] Yeah. It really puts people in a space where they. Not only understand what is truly important to them, but they can't afford to put it off.

And so again, it creates that energy to move forward and reach those things sooner.

Mike: [00:15:38] all right. We've got one more question as we're continuing along the focus here and here's the last question. You go back to the same doctor, but this time he shocks you with the news that you only have one day left to live. Notice what feelings arise as you confront your very real mortality, ask yourself what dreams will be left unfulfilled. What do I wish I had finished or had been? What do I wish I had done? What did I miss? This question is a super hard hitting, right?   If you just have that the one day, obviously the question is not, how do you spend that one day? It's looking back  what comes out of this question, Brad when you're working with people or  what are you trying to really get to here? 

Brad: [00:16:38] yeah, Mike, thanks. And you said it, I want to be clear because it's not, how would you spend that last day? Cause that's usually what people go to and that's not what we're asking. We're asking again. Who did you not get to be? What did you not get to do? What talents did you not get to use?

Where did the world not get from you? And that really puts people in a different space. And so this whole three questions, right? It's like a big funnel and you start at the top with everything that's important and then become down to the five or 10 year timeframe. And now all of a sudden, boom, you've been given one day and you're looking back, who did you not get to be?

What did you not get to do? What talents did you not get to use? And boom, it becomes crystal clear. And in that instance what things you would have missed out on and who you didn't get to be. We now know what three, four or five things are truly the most important to that client and their specific situation.

Mike: [00:17:37] It's always interesting because, I would have used this question or this kind of question, like  what would you have on your obituary? What do you want to have written try to put yourself in the future and think back what is most important. But again, that gets back to the first question.

It's oh here's the things I want to accomplish. I probably have decades to do this. I can't wait until. X Y Z, but no. This is, this is today. You got to look backwards today and what did you miss? We better start on that tomorrow. We better get going on that. if that's important to you, it needs to be on the obituary needs to be on the stone.

Like there's no waiting for retirement or waiting for five years or 10 years. It's let's figure out how to get that going today. 

Brad: [00:18:15] Yeah. And often what we find, the answers here at first glance would appear not to be financial at first glance. It's things like I didn't get to see my kids grow up. I didn't get to spend special moments with them. I have this relationship with my brother's sister, whoever I didn't get to repair that.

Things like that. And you say what does that have to do with finance? Or does that have to do with money think of everything in terms of a trade off of energy, talent, and money and time, usually those things that are so important to us get put off because. We think we have to do something else.

We think we have to work 10 hours a day to make our financial ends meet. We get so tied up in all these other things that those go to the back burner. And so this process really helps remind people. Yeah. What's truly important and recognized.that. Yeah. All of that is a trade-off.

And so where do you really want to apply your time? Energy and talents and money? It all is tied together.

Mike: [00:19:15] Absolutely. There's no other way to say it. It's all tied together. And yet financial planning always seems to deal with just moving the money around from cash flows and budgets and savings and retirement and kids. And it's just, where's the money moving and we're not talking about energy and passion and  your time, human capital, all these other things. so   starting point. Can I say that, like those kinds of three questions figuring out what is most important in your life and helping to uncover that. So now, as we've clearly shown here, there's a process that has been refined over years and I'm sure we'll continue to be refined.

And this helps us with the, maybe the first stage of figuring out, okay. Here's truly. The most important things in my life, Brad,  what do we do from there? Are there more steps, the next steps in the process that someone can take on their own? Or of course, when they work with a life planner, what comes after this? 

Brad: [00:20:13] Yeah. So really what comes next then is after we've gotten all of this stuff out there, that's so important. Now we know what the priorities are, right? So again, if we go back to what I said before, we have a process that finds out everything that's important to you. And then the second step is to find out what's truly the priority to you.

So now what we do is if you're working with, a financial life planner, we really try to do is we take all of that information. And we build a vision of that client's life and replay it back to them of how things might be different for them based on all of this stuff that we've heard, that puts all of those things that they've just established as priorities for themselves at the forefront of their plan.

And we give that back to them, if you will, as a vision or as a gift to say, what if your life was like this? And the purpose of that is to create energy now that we know. What is important. We are now creating energy for our clients to remind them of how important it is and to go forward and to really take these steps.

Once they have the energy, then we ask what could possibly get in the way, And what we find is that if we've done our jobs correctly, to establish those priorities and that energy There's certainly some things that get in the way, but those things are not as big as they used to seem because the clients now are so energized and they start to solve these things that might get in the way on their own.

And you ask them, okay what could you do about that? And they're like boom. Here's what I can do. And again, we have a process that we help them through that to find those solutions, if they can't come up with them right away on their own. But it's all about empowering them and energizing them so that they.

Go forward and actually make these changes.

Mike: [00:21:51] it's amazing. If I was listening to this podcast, Brad. I'd be almost sort of like rolling my eyes a little bit. Okay. All right. Maybe. But I can tell you, man, I have been through some of this and the energy. You mentioned energy quite a few times here. And with this kind of visioning of your future, which is not a retirement future, let's be clear.

 Brad does not say to somebody, Hey, in 20 years, here's what your life is going to look like. It's six months from now, 12 months from now. What if we had these changes.

such that here's the way your life looks. If you want to spend more time with your kids. You're doing that in specifically a day  that you might be spending with the kids and it feels great.

And you've got the time to do that. So painting that kind of picture in the very, very near term to make changes now, going through that, the energy that's created is unbelievable. It just is. So it's something that we could talk about today. That's what we're talking about, but it's hard to really press upon a listener, just the energy and emotion that is absolutely created by  thinking about your life in nine months, that has many more of the parts in it.

That you want to have in it. It's amazing energy. And then as Brad said, what could possibly get in the way of making that happen? Let me tell you, you'll be knocking those things down. There's no tomorrow you'll be getting at it. 

 Brad: [00:23:13] Yeah, Mike. What we often find is we'll paint this vision and we'll, we'll maybe have a client accomplish something a year from now, through their three biggest things. And in six months you get a phone call and the client says, guess what? Boom . boom, boom.  So at first they come into the meeting thinking it's going to take five or 10 years, and then we give it to them in a year.

But because of the, again, the permission, the energy, the space that we've created and  empowering them, they start knocking these things off much sooner than even they thought they could and sooner than what you give it to them. And so it's just, it's really is a amazing and beautiful process.

 Mike: [00:23:49] It's simply awesome. Brad, I'm feeling the energy right now, just talking about it and it is so great for people to feel like they can get accomplished so much more quickly. Than they even imagined. And that's exactly what this process helps you uncover inside of yourself.

Truly incredible. So from the top  what's important to you defining that, getting very precise, right? With those questions, then the vision of the future near term future. Then knocking out obstacles, what can get in the way and getting started on those. And then that's where we get back to the traditional quote, unquote financial planning.

All right. Are we using your money and your time and energy to make that vision a reality as soon as we can. 

Brad: [00:24:31] Yeah. Perfect.

Mike: [00:24:33] Perfect. Just summed it up as awesome. So that's my understanding and Brad's explained it to you on the show here today, around. The life planning again, not a massive fan of that terminology. So we try to break it down and explain it. But the kinder Institute is a place that you can find a lot of resources.

What are other places, Brad, there's also a website, the life planning for you. 

Brad: [00:24:55] Yeah, I think that's a great one. Mike, I'm looking at it right now. Life planning for you.com. And it's got a wealth of resources on there for folks that maybe want to try this on their own. And it is still very valuable to go through these three questions on your own and there's tools there's books that George Kinder have written that are very helpful.

And then once you've done that, if you feel like you want more than there's a place where you can find a registered life planner to help you through this process. And, Mike  what we like to say is that life planning is really financial planning  done. Right?  So what I often tell my clients is I can answer your financial questions. I can certainly do that, but it would be doing you a disservice if I didn't know everything that's important to you. If I don't know those priorities, if I don't know what could get in the way, then I'm just throwing darts at a dart board.

Mike: [00:25:39] Yeah,

I'm just sitting here nodding and smiling because it's so true. It's, the specific financial questions we can answer. It's not as hard as a lot of people think, but when you're trained and you've got some background in it, you know, but how is that helping somebody truly live their best?

Okay. 

Brad: [00:25:55] there you go.

Mike: [00:25:56] Now  I'll make a couple of comments too. I've read some of George's books. They have great information. Honestly, it didn't hit me, too well. So don't be turned off if you flip through open a book and it's like, eh, not sure about this. I will say also the life planning for you website is a fantastic, has so many resources really spend some time.

 I've gone through it and  I'll just take five or 10 minutes to jot some stuff down. You won't get nearly as much out of it. You can do it on your own, but make sure you're really setting aside some time and push yourself. Hey, what else?  Anything more?

I mean, Really fill in that stuff, give yourself a bunch of space and time and there's good prompting questions there. So just take your time going through it. The more time you put in, the more valuable the output is going to be. 

Brad: [00:26:37] Yeah, totally.

Mike: [00:26:39] Yeah. Brad, anything else that we haven't talked about in terms of life planning or kinder Institute that you wanted to make sure we got in? 

Brad: [00:26:46] Just what you said, the way I look at it is life planning for a client is really  an investment in themselves. And, to make that investment be as successful as possible it takes some time and again, that energy. And so if they set aside that time and create that space and invest in themselves, then they're really going to be able to live their most fulfilled lives.

Mike: [00:27:09] absolutely. Brad, where can people find out more about you or more about the Institute? 

Brad: [00:27:15] So the Institute is a Kendra institute.com. I'm listed as a trainer there. I think as Mike mentioned my website is www.tafoyabarrett.com T a F L Y a B as in boy, a R E T t.com.

Mike: [00:27:30] Fantastic, Brad. I really appreciate you coming on and sharing this process that I feel is so important. As you said, that's just sum it up the way that you said it was financial planning done, right? 

Brad: [00:27:46] Yup. That's it? 

Mike: [00:27:48] That's it, man. Thank you so much for being on super appreciate it?

Brad: [00:27:52] Yeah. Thank you, Mike. It was a pleasure. And an honor, I appreciate it.


Mike: [00:27:57] Thanks for joining us on financial planning for entrepreneurs. If you like, what you heard, please subscribe to and rate the podcast on Apple iTunes, Google play Spotify, or wherever you get your podcasts. You can connect with me on linkedin or mortonfinancialadvice.com. I'd love to get your feedback. If you have a comment or question, please email me at financialplanningpod@gmail.com. Until next time thanks for tuning in