Executive Summary
Traditionally, financial advisors have focused on managing a client's money to ensure their lifestyle is supported to and through retirement. Yet money is only one form of personal capital; clients can also draw on their energy, time, and attention. Because these resources are often pulled toward competing priorities, clients may find themselves aiming for one goal while unintentionally directing their resources elsewhere, which may create a disconnect between the client's stated priorities and how their capital is actually being used. Even with the best intentions, managing the many opportunities and demands on the different dimensions of a client's personal capital can create unintended misalignment. Yet devising a strategy to intentionally narrow one's focus to what matters most can yield incredible dividends, from peace of mind to increased time on what truly matters.
In this 180th episode of Kitces & Carl, Michael Kitces and client communication expert Carl Richards discuss how advisors can help clients assess all of their uses of capital: Money, Energy, Time, and Attention. Among these, attention may be both the most powerful and scarce resource. Attention is uniquely fragmented in today's hyper-distracted world, and because it so often dictates where each form of capital flows, a client may internally hold certain values while their calendars and checkbooks reflect different ones.
When an advisor sees tension between a client's stated values and their lived ones, there may be opportunities for gentle nudges toward alignment. For example, if a core goal – such as not being a financial burden to their children – is secure, advisors can invite clients to consider what else matters, such as time spent with grandchildren or supporting adult children still establishing themselves. Giving clients permission to dream about what else is possible with their capital, and to spend their capital in those ways, can be incredibly powerful.
On a larger scale, this perspective offers a powerful reframing of the value of financial advice. Peace of mind, often seen as an intangible benefit of planning, may in fact be an 'attention dividend' that frees clients from the mental load of managing their finances and allowing them to focus their attention elsewhere. In this sense, advisors don't just save clients money or time; they also help clients reclaim attention and energy – intangible yet deeply valued resources. A client who once spent four hours each week monitoring markets might discover 11 more days each year to focus on other things that are more meaningful to them. Financial advice, in this view, becomes not only about wealth management but also about attention management!
Ultimately, this points toward a more human-centered model of advice – one rooted in empathy, presence, and personal alignment. In a world of endless options and technology solutions, the deeper value of advice lies in helping clients direct their attention toward what truly matters and uncover the misalignments between their stated values and their lived reality. Advisors who embrace this broader mandate – helping clients align all forms of capital with what they truly value – can strengthen their role into that of a trusted guide in an increasingly distracted world.
Authors:
***Editor's Note: Can't get enough of Kitces & Carl? Neither can we, which is why we've released it as a podcast as well! Check it out on all the usual podcast platforms, including Apple Podcasts (iTunes), Spotify, and YouTube Music.
Show Notes
Your Money: Reimagining Wealth in 101 Simple Sketches- Use of Capital and Planning
- The Attention Merchants: The Epic Scramble to Get Inside Our Heads
- What Is Our Attention Really Worth?, by Carl Richards
- Rescue Time
- Add Value To Client Relationships And Uncover New Goals By Asking: "What's Possible Now?", by Dr. Meghaan Lurtz
Kitces & Carl Transcript
Michael: Well, greetings, Carl.
Carl: Hello, Michael Kitces.
Michael: How are you doing today?
Carl: It's great. As we're recording, it's the peak of fall, and beautiful weather, and the light's awesome. So, things are really, really good. How about you?
Michael: Doing well, doing well. Trees are turning here. I live in the D.C. metro area. And I joke sometimes, we actually have four seasons, and each of them lasts about three months, the way that we teach kids how seasons work. I grew up here. I thought that's how it always was. And then I learned it's not true in other parts of the world, but the fall season here then is very nice. So, we have lots of trees in various shades...
Carl: I bet.
Michael: ...of reds and oranges and yellows. So, it's a very nice fall foliage transition right now.
Carl: Speaking of seasons, it's just...funny side note. I have a friend that lives up in a small town way up in the mountains of Wyoming, and they say up there that they have ten months of winter and two months of bad snowmobiling. I'm like, "I do not want to live there."
Michael: I like that. I like that. I appreciate their focus on what's important to them.
Carl: That's exactly right. That's exactly right.
The Four Types Of Capital: Money, Energy, Time, And Attention [01:26]
Michael: So, for today's discussion, I've been enjoying the new book, the...I was going to call it the new sketchbook, the new book of sketches, the new sketchbooks."
Carl: Sketchy book.
Michael: Sketchy. The sketchy book. Oh, that's right. Okay. I'm going to call it that from now on, because you said it first. So...
Carl: That's right.
Michael: ...in that sketchy book of yours, you had this interesting drawing around, what do you call it, the sources of capital, the four sources of capital.
Carl: Yep, that's right.
Michael: Money, right, which I think we all get. Time, which I feel like there's been a lot of discussion these days around, what are you doing with your time? How are you managing your time? Energy, which I think is an interesting way to frame it, but right at a personal level, I feel like a lot of the zeitgeist of all things coaching, leadership coaching these days, is like, are you doing the things that bring you energy and not take energy? Above the line, not below the lines. I was kind of feeling the energy angles. There's money, there's time, there's energy. And then you had a fourth that was labeled attention. And I was just genuinely curious, so what do you mean by that? Where are you going with this? What is attention as a source of capital? And maybe you've got thoughts on the other three as well. I don't know if I framed them the way that you would frame them, but I was particularly curious about the attention is a source of capital part and what that means.
Carl: No, it is a fun conversation. I think maybe to back up just a little bit, I think the way I think about financial planning is, I think about it in a Venn diagram, which should be no surprise, or as Bill Winterberg and I have agreed to call them: circle sketches. Because I used to get these long letters from the Venn diagram police, when "The New York Times" would run these, and they would be like two-page emails about why something...And I used to try and defend it, and then it would just get me in...You know how that goes. You'd get nowhere. So, I finally wrote this template response. Whenever I'd get the Venn diagram police email, this response would just say, "You're so right. That's why I call them circle sketches." So just imagine a Venn diagram. One circle says, "Your use of capital," and the other circle says, "What's important to you?" That's how I think about real financial planning. And again, the never-ending process, and every word there is intentional, the never-ending process of aligning your use of capital with what's important to you. And I should mention...
Michael: Oh.
Carl: ...what's important to you...So, there's a couple things about that to our discussion. Your use of capital always had an asterisk. And there was under the asterisk that said, "Money, energy, time, and attention." I use it that way for META, money, energy, time, and attention. So, you...
Michael: Oh, yeah, I guess it does spell out META. I was going to go with MEAT, but...
Carl: Yeah, somebody else literally liked MEAT too. And maybe given Facebook's...maybe that would've been a better choice. But...
Michael: MEAT, MATE. Yeah, actually, now that you mentioned it, you can rearrange those four letters into a lot of words.
Carl: MATE would've been good. So, I like to think about how do we align our use of capital with what's important? And I want to mention one other thing. This is one of the sketches I've worked on. Honestly, there was a word in this sketch that bothered me for a decade, and I've changed it. And the word was, your use of capital on one side. The other circle was labeled, "What you say is important to you." And the word that bothered me the whole time was "say," because I'm much more interested in your revealed preferences, not in what you...I'm much more interested in my revealed preferences, not my stated preferences. And so that's where we get the checkbook and the calendar never lie, right? You'll tell me what's important to you, but I'll actually tell you what appears to be most important to you if I can see your checkbook and calendar. So, that's the backdrop for this idea of the never-ending process of aligning your use of capital with what is important to you. And we've talked at length about goal clarification over time, that would be the what's important to you side. It turns out we don't really know what that is, and it changes. And so...
Michael: So, capital in this context, I guess maybe this is even part of what threw me. Right. I see that word, I start with, well, your good old money, financial capital. There's all the various research out there. Well, we have other types of capital. There's social capital in our networks. And our relationships, there's human capital of my ability to do things, right? We get different types of capital, all essentially convert into either money or ways of generating money I feel like is the economic lens for different types of capital. What strikes me, as you framed, when you talk about uses of capital overlapping with what's important to you, it hits how much more now for your four types, right? Are you putting your money towards what's really important to you? Are you putting your time towards what's really important to you? Are you putting your energy towards what's really important to you? Are you putting your attention to what's really important to you? I was going to say personal capital is the framing that comes to mind to me, no...not meant to be a throwback to a firm that happened to have literally that exact name that got sold a few years ago to Empower, but it's a very personal framing of capital, not necessarily an economic framing of capital.
Carl: The way I think about it is, I think of, okay, what do I have that I could invest to earn a return on? What do I have that I can spend, right? I can invest energy in a project. I can certainly...and we'll get to attention, which I think is super fascinating. So, I think of it as attentional capital, right? I can invest attention. Now, let's talk about attention for a minute.
Michael: That's a fascinating way to frame it. Sorry, I have to process that for a moment: "I can invest 'blank' in that project."
Carl: And we'll talk about that.
Michael: And you fill in the 'blank' is an interesting range. Yeah, I could put some money towards it, I could put some time towards it. I could really put some energy towards it, which isn't necessarily the same as time. I can decide whether I'm going to put attention towards it.
Carl: And thinking about the return, right? Because I think we need to talk more about this, but we all have an emotional balance sheet, right? And I think the return that we get from these things, I think, to me, it drives me a little bit bonkers that we often think of return just in terms of dollars, right? If I give a no-interest or a really low fixed interest loan to the local flower company so they can buy a sprinter van...This is an example I heard recently, I think it was in Carbondale, Colorado. And let's say I'm only going to get a return of 3%, and I decide it's not very risky. I've met with the person, all those things, right? Of course, there's still risk in it. Only a return of 3%. That's not all I'm getting. Because every time I see that van, I feel good. I'm happy that the community's better off. And every time I see that van, and I may see that van two or three times a week, that's part of the return profile of that investment in my mind. So, I just think we could think much broader about that. And that's where we get...Is that okay before I move to attention?
Michael: Yeah, yeah.
Carl: So attention to me is interesting just because all the people, the wealthiest people in the world, are not railroad titans. They're titans of attention, right? Like Facebook...
Michael: That's a bold statement.
Carl: Zuckerberg, I would argue, Musk, Bezos, Amazon, they're all competing for our attention. And I don't know what that means other than, at the very least, thinking about the fact that it must be valuable, right? Our collective attention must be really valuable.
Michael: Well, yeah, there was a really interesting book that came out a couple of years ago that was literally called "The Attention Merchants," something like that, that was written about that phenomenon. And it essentially kind of tracked the evolution of media accompanies as the merchants of attention. So, it was looking at the evolution of media from the olden days of circulating flyers and leaflets to the rise of newspapers, to then the digitization with the internet, and then social media. So, it was this evolution of the things that captured our attention. But it was very much built around that theme of most of us don't realize how economically valuable our attention is, and that businesses have been operating for the past, at least 100 or 200 years, specifically built to monetize our attention.
Carl: Totally. So, all that points to the same thing to me, which is, I should maybe start thinking about the value of my own attention, right? And I think you can make an argument now that politics is...maybe, it's always been, but it's certainly more than ever, the power in politics is the power of attention, right? My ability to attract and gain attention and get people to...Isn't this interesting language, right? The ability to get people to pay, right, to pay attention. So, that's...
Michael: I never actually thought about that from just a pure language. That is literally what we say, pay attention.
Carl: Yeah. And I would argue, look, the currency of a good relationship is attention. The cost, the way you have a good relationship is by paying attention, right? So, let me give you an example that I was thinking about the other day. I could take my daughter skiing, and that would cost me money. Unfortunately, way too much money these days. It costs me money. It would definitely take energy. It would take time. And it's quite possible that I could do all of those things. I could spend the whole day with her and not be there, right? Be on my phone...
Michael: Not paying attention because I'm on my phone, or otherwise.
Carl: And even if I'm not, yeah, just thinking about something or being on my phone, or...And I guarantee you she would know the difference. That relationship would be less reward...There would be less of a return on that relationship on that event, even though I invested money, energy, and time. I think attention's actually probably the current of the rest of them in terms of when we talk about relationships. I think you pay...I think the cost of a meaningful life is attention. And so, to me, it's really interesting to think about, okay, great. What does this mean for advisors in terms of helping clients manage capital? I help you manage capital. Okay. All we've ever really thought about is money. And sometimes we're like, yeah, time, because money equals time. And retirement, we think about in years. But how do we help, not only ourselves, but other people pay attention to what is apparently a maybe...?
Carl: Because there's another game you can play. There's going to be a day in which...Somebody actually asked me this the other day, they're like, "What if we treated money like we do time in the sense of, at the end of every day, it's all gone, and you start with a new clock. You can't save any of it up. You can't store it." And it's just a thought experiment. How would you treat...? Because one day that will be true. One day, you won't be able to store up any more money. How would you treat your money different?
Michael: Well, I can't get a bigger piggy bank? Come on. I can always store more money.
Carl: No, I'm talking about the day, the end of analysis, as we call it in the financial plan, right? There's a day that...The Egyptians tried, it hasn't worked very well, to sort of take it with you. So...
Michael: Okay. True. Yes.
Carl: Yeah. So, I'm super...Yeah. So anyway, let me pause with attention. What comes up for you?
The True Value Of Financial Advice: Attention And Peace Of Mind [15:55]
Michael: I start thinking about this just in the context of work we do with clients and just the...well, not necessarily about the emphasis on pay of pay attention, but how often have we been in some situation with clients that essentially comes down to stop paying attention to CNBC and pay attention to what I'm telling you? Obviously, I don't say it that way, but...
Carl: Right, right.
Michael: Yeah. That cops up a lot, right? Which then, to me, raises question, so is part of our value that you can pay attention to me and that alleviates your needs to pay attention elsewhere? How do I better earn my client's attention so that they will pay attention to me and not feel tempted to pay attention to the other things that are not actually great places to pay that attention?
Carl: Yeah. And the opposite way of saying that is when you hear clients say, "Gosh, I'm not even thinking about that anymore. I'm just not worried anymore." Well, why are they not worried? Well, because they're not paying attention to the hand-wavy people on the internet, right?
Michael: So, is that a way to frame, one of the benefits of financial planning is peace of mind? Which I know is true, having sat across some clients, and I've always struggled with that from a marketing perspective. But is that an attention promise, an attention value prop? Peace of mind means you won't have to pay attention to that anymore? Because I got it for you. I'm covering it, I'm doing it. You delegated it to me, however you want to frame it.
Carl: Yeah. And again, I'm not exactly sure the type of language I would use with clients. We can talk through that in a minute if we want. But I think my experience has been, after some period, and I often point to 18 months, 18 months into a relationship. But what really has to have happened is the financial pornography detox program has taken hold, right? And what you start to hear, if you were able to listen to what a client would say to a friend about you, if asked, and since we don't talk about money, this doesn't happen often, but if they were, if the client was interviewed,...I did this a couple times, hired marketing companies to interview clients, and the clients always said something around, "Gosh, I don't worry anymore." Right? They didn't say, "Carl built an efficient markets portfolio based on..." They knew that. That was probably part of the process to get them to this spot. But the ultimate spot they got to was, "I'm just not worrying about that anymore."
And we actually had...There's a great story about, this client was a CFO of a big company, and he started actually calculating how much time he was spending thinking about his investments a week. So, it was like, he just sort of paid attention to it. I read The Wall Street Journal, I do this, I do this, I do this. He came up with the number four hours a week. And he actually came...and he did it further. He was like, "What is that, 208 hours a year? And if I'm awake this many hours..." He came back, and he is like, "You've given me back 11 days of my life." Right? "Because I'm not paying attention to that stuff anymore." Right? And there's that word, I'm not paying attention to that stuff anymore.
Michael: So, Mr. and Mrs. Client, Mr. and Mrs. Prospect, you'll spend money to hire me to save time, energy, and attention that you won't need to spend on your money.
Carl: Yeah. Again, I think the challenge with a lot of the value of our work is that, in the early stages of a relationship, and especially coming to see you, they don't even know that that's a thing. And we've talked endlessly about goal clarification over time, getting clear about your values. Nobody comes into your office saying, "Please help me clarify my values." Right? But the stuff they'll point to later is not going to be the presenting problem that came into your office for. And so I'm not so sure how you would use that in marketing. But, yeah, things like worry-free, stress-free, not thinking about things anymore, taking that plate from you. All of that is pointing to, "I'm not spending any energy, or time, or attention on this anymore."
Michael: I'm just playing with taglines in my head now. We don't just help our clients save their money, we help them save their attention.
Can AI Duplicate Human Attention? [20:51]
Carl: I'm actually quite interested in this idea of being more upfront around attention because I feel like I'm getting increasingly just...If I had a concern in the world, there's a few, but one of them is this deep fragmented attention, and I think it's producing...and I think AI tools are only going to make it worse because they're even more alluring, right? But if you just start watching...because you've been traveling a lot lately, as I have been. And so I spend some time in airports just watching how few people...I better not even talk about the bathrooms, right? People walking everywhere, bathrooms included, with screens in front of their face, and that's an attention problem. And if we can't learn...If it's true, and I don't know if it is, but I think it is, that the currency of a really meaningful life, and especially relationships, I don't think you have deep, meaningful relationships without paying attention. How could you? And if we're not actively...so I'm sort of curious about, if there was something worth fighting for these days, it feels like it's attention, helping people get on top of their use of attention.
Michael: So, to open up a slightly edgy related topic then, can AI pay attention to me? Can AI pay attention to me?
Carl: Well, I think this is a really problematic double-edged sword, only if I engage with it. And then it might be able to pay attention to me 24 hours a day, never get sick, never...Right?
Michael: I mean, like, it's...
Carl: With my prompts.
Michael: I don't know, it's always available. I guess I'm...Does it being always available mean it's always paying attention? I don't know. Is there a...? Because you've highlighted so much of the attention element, right. With your daughter, if you go out on a trip, it's not the same if you're not paying attention, right? If you go with her, but you're distracted on your phone or something. So, I don't know, it just, to me, there's an empathy thing built. I don't know, there's an empathy thing built in there. There's a human connection thing built in there. Is that a version of what...at least those of us who are naysayers about AI replacing us as advisors, is that part of what it comes to? The AI can always come up with answers, but is it really paying attention in a way that I feel more connected?
Carl: Yeah, it is a really interesting question, and I feel really...It makes me slightly sad, is the emotion I'm feeling around the idea of...because not only is it artificial intelligence, I think we're using "AI" too often. We need to continue to use the word "artificial". Not only is it artificial intelligence, it's artificial empathy, it's artificial connection, it's artificial attention. It's all those things. People are saying all the time, "I talk to this person, my AI friend, all the time, they're so empathetic, they listen to me, they care about me." Well, that's artificial empathy and artificial attention. And I think intelligence might be a thing AI can pull off, but wisdom is not a thing AI can pull off. And I think artificial intelligence versus human wisdom is how I've been framing this discussion lately. And I think you could insert attention there. It's a cheap substitute for the real thing.
How To Discuss Capital Alignment With Financial Planning Clients [25:00]
Michael: So, with our time left, then just bring it back to me from the advisor end. What am I doing with this? Is this about how I position myself? You know, Mr. and Mrs. Client, my fee is nothing compared to how much you pay attention to your own portfolio.
Carl: Nice. Nice.
Michael: Oh, you can try that if you want. Someone try that, tell me how it goes with the prospect, maybe I'll do it.
Carl: I don't think it's much that...
Michael: Is this language I should be using? Are these client conversations? Is this a new discovery conversation, which is totally different than my fun marketing hook? Where do I go with this?
Carl: I am a much bigger fan of just using these things to inform how you act rather than maybe what you say. And so I think you...now I can't get away from the phrase, you pay attention to how clients are using time and energy and attention. If I say that my goal is to never be a burden to the kids, that was a real client's example, right, and you press me a little bit on, "Well, and what then," right? Let's pretend like you're, you know, you're there. We'll define that later. We'll call it a goal. But let's say we've met this goal of never being a burden to the kids. What then? And I get to this point of like, "Gosh, I'd just like to spend more..." This is a real example. So, that's why I'm using these. "I'd just like to spend more time with my grandkids. In fact, I'd love to have $10,000 a year that I could spend any way I want as long as it was on the grandkids."
Well, it's interesting then a client goes and does that thing, whatever it is, take them all to Disneyland, whatever. And then like, "Hey, how was the experience? What was it like?" Then I could start asking questions of like, "How do you find...?" If I had a client like that, and I was able to ask them, "What do you do to make those experiences the most rewarding?" I'm not even sure I'm saying like...I could see myself asking, you know, "I bet that grandkids really notice how much you're sort of paying attention to them," right? "How do you do that? How is it...?" So, I could just see myself trying to find ways to point at it. But I also wonder, I'm super curious, and it'd be fun to...If anybody has emails about this, send them to Michael because I would love to read them, which are, are there ways for us to be more overt about this, more...? I'm using a screen time app called Opal that I track. Actually, you can have communities, and I've got other advisors joining that community to screen time derby. We're getting kind of aggressive about, get off your phone and get outside, or get in client meetings, or get into relationships. Is there a role for that with clients? It feels to me like there has to be.
Michael: A role with clients to say? I don't know.
Carl: Let me give you an example.
Michael: Tell me about what you're paying attention to.
Carl: Let me give you an example.
Michael: Are those are the things you wanted to pay attention to? And let's keep score about whether you're better aligned and paying attention to what you actually wanted to pay attention to over time.
Carl: Right. Let me give you kinda a crazy example. When I first wrote about attention and how aligning your use of time, money, energy, attention in The Times column, Rescue Time reached out to me and had me install Rescue Time on my computer. And I made a bunch of claims about how I spend my time. So, this is largely about time. I hadn't made the connection to attention yet. And I made a bunch of claims. I never check email after 5:00. I don't check it on the weekends. I don't watch sports news. I care about sports, but I don't watch sports news. And I certainly don't spend any time on politics, and especially not the other news channel. I would never read that one, whatever the other one is for you. And then I had them track it for 30 days, and then they came back to me with this report, which was just, the word I often use is horrific. I've told the story enough now that I don't cry anymore, but it was really hard because it became...
So a specific example is like, my daughter says to me, "Hey..." My statement of financial purpose on my one-page plan says time with my family, mainly outside. That's my stated preference back to...you know, my stated preference. And then you come back to me, and my daughter one day asked me to go on a mountain bike ride with her, And I say no, because why, I don't have time. And then I pull up this report, and I spent 57 minutes on ESPN that day. And I'm curious about maybe...And that example has a lot to do with time, but it also is like, what stole...?
Michael: My attention.
Carl: I don't love that phrase necessarily because it puts me in a lack-of-control role. But to a large degree, we are showing up to a...There's 300 Ph.D.s on the other end of this fight at Facebook, or Instagram, or wherever. So we just have to be aware. So, is there a role with clients who are like, "Hey, I've noticed you keep mentioning you don't have time to spend to coach your daughter's soccer team. Where's that time going?" I've been saying to people lately, in a much nicer way than this, but, "Hey, that's a cute story. Let's pull up your phone right now in open screen time, and I'll find you the two hours a day you need."
Michael: Cool.
Carl: You couldn't do that, that...Maybe you could, some clients you probably could, but most clients you probably couldn't. But is there a way to start working with, slowly, little, I call them righteous tricks? Little, little righteous tricks are always in service of the client because there are little ways that we can start exposing clients to that. So one day they wake up and go, "Man, I'm spending four hours a week now with my local charity that I've always wanted to volunteer with. I didn't have time before, and you helped me find that time." That's interesting. That's an interesting place to explore.
Michael: All built around, I'm just trying to help clients with their alignment of their uses of capital. All of them, not just aligning money to their values and what's important to them, but aligning money, and energy, and time, and attention to what's important to them.
Carl: Yeah. And remember, it's what's important to them, not you. So, it's always sort of like, "You told me this." I think we're going to have an increasing role in that because I don't think anybody else...nobody else is willing to do it. Nobody else is willing to have that conversation, and probably nobody else has the tools or the access to the data to have that conversation around money, at least. And it'd be interesting, crazy idea, thought experiment. Is there a world in which screen time is like a cash flow statement? Hey, we helped you with cash flow management, now we're helping you with time management. Just your allocation of it, not necessarily the nitty-gritty detail. Is there a world? I have no idea. But these are the kind of questions I love to think about. So thanks for allowing me to.
Michael: Awesome. Thank you, Carl.
Carl: Cheers, Michael, that was fun.
Michael: Thank you.
