The rhythmic beat of the music. The curvature of her hands and body movement. Art and precision. This is the essence of Flamenco dance.
A Sunny Day in Spain
In our recent travels to Spain, my family and I started the day in Seville by walking to Metrosol Parasol. At the rooftop café, I sipped sangria while my husband had una cerveza (a beer) and the kids enjoyed the view. We ate a hearty lunch of tortilla española and paella around 2pm. We then proceeded to Plaza de España, a beautiful tribute to the culturally rich cities throughout Spain. Off in the distance, we heard music and noticed a small flamenco group performing. Two ladies were dressed in their traditional flamenco garb, supported by two male musicians. The petite older woman took the stage and interpreted the music beautifully. The movements of the taller, younger dancer that followed her were equally impressive.
Qualitative and Quantitative
What does this have to do with financial planning? A lot, actually.
Financial planning is about much more than the technical data. While I agree it is important to hire an experienced advisor who is technically competent, I think it is even more important to find someone you can trust. Someone who understands your hopes, dreams, and deepest desires … an advisor who meets you where you are and doesn’t judge you for past mistakes. One who will work collaboratively with you (and your spouse if married) to close the gap between where you are now and where you want to be in the future.
That gap may be big or small. But it’s there nonetheless. You might be able to quickly jump across the gap if it is small and within reach. Larger gaps will take more time and effort, just like constructing a bridge. It’s far easier to build that bridge when you have a team of people to support you. And that is where an advisor can be incredibly helpful.
I understand financial planning is a hard concept to grasp. After all, it’s intangible. I find it far easier emotionally for people to hire me for tax compliance work through SV CPA Services because there is a tangible deliverable (a tax return). But if you weigh the pros and cons, having your tax return prepared by someone else likely does not have a dramatic impact on your overall quality of life. Financial planning, when done properly, is transformative because it gives you permission to explore the future possibilities. At its core, financial planning is far more valuable than a tax return based on historical data.
A Note About Technology
It’s no secret that WorthyNest® embraces technology. I meet virtually with clients outside greater St. Louis on Zoom video conference; in fact, all of my meetings were conducted virtually when I lived abroad in Spain for three months. Here are some other reasons I rely so heavily on technology in my business:
1. It’s better for the environment. Less paper, fewer trees cut down.
2. We live in a digital world. Information is readily available at your fingertips.
3. And finally, the financial plan is stale after a day.
Investment values fluctuate daily, and you could have a significant life change. Examples include a move, promotion, job loss, business start-up or sale, marriage, divorce, pregnancy, or death of a loved one. The possibilities are endless. And those are just examples of changes happening to you. What if your internal desires change? Perhaps you yearn to travel or volunteer more. Within my planning software, we can quickly update goals and re-run the financial plan in a matter of minutes.
Technology has its limitations, though. For example, I ask new clients for details of their current life insurance coverage in the initial data gathering phase of the financial planning process. My financial planning software gives a very precise number like $2,467,008 of “necessary” life insurance. It highlights level 1 needs (i.e. debt payments and funeral expenses) and separately displays level 2 needs (e.g. future expenses and earnings potential).
But the software may not take into account that the client is within 10 years of retirement and has other financial assets available to liquidate. Or it may fail to recognize that the spouse could increase his or her earnings if suddenly widowed. The software may also fail to see that the premium to fund this $2.4M policy could be better applied elsewhere. This is where financial planning becomes art. I apply professional judgment and my intimate knowledge of the client to articulate an appropriate recommendation of life insurance – and it’s usually not $2,467,008. As a fee-only fiduciary, I’m not conflicted about recommending a different amount of insurance because I only make recommendations in the best interest of the client.
While we’re on the topic of technology and the human side of financial planning, I’m going to comment on one more thing: robo-advisors. If you have a substantial amount of money outside of employer-sponsored retirement plans (i.e. $250,000+), you should be very cautious about robo-advisors. Here’s why. When the stock market is volatile and your emotions make you want to sell, you don’t have any one person to stop you. You enter the order on your computer to sell, and it’s done. Just like that.
If your money is held in one of the hybrid robo solutions like Vanguard Personal Services, you can call one of the CFP® professionals on staff, but he or she won’t have the depth of experience about your particular situation. If you call the next day, you’ll get a different CFP® professional. There’s very little consistency.
WorthyNest® has and always will be a financial planning centric firm. But we also offer investment management services. And I didn’t realize how crucial that was until a recent conversation with another advisor. Clients contact me if they are concerned about a market downturn. I’m the voice of reason when their gut tells them to sell. We decide together if selling puts them closer to their long-term objectives or further away.
I hope you agree that financial planning is equally artistic and technical. It marries the qualitative and quantitative aspects of money.
The picture I painted at the beginning of this blog post – a sunny day in Spain and spontaneous Flamenco show – was a dream of mine for a while. My husband Bryan and I took several steps to make it a reality. What’s your dream? Do you need help closing the gap? If so, schedule a complimentary consultation with me now.
P.S. Is this is the first blog post you read on my three-month excursion to Spain? Check out my original article on the reasons for our adventure and subscribe to the WorthyNest® blog so you don't miss any other details.