Welcome back to the fifteenth episode of the Financial Advisor Success podcast!
This week’s guest is George Kinder, who is known to most as the “father” of the life planning – a way of holistically delivering financial planning that focuses on delving into clients’ real goals, beyond just their financial concerns, in an effort to help them use their money to deliver freedom into their lives.
What’s fascinating about George, though, is that he didn’t start out trying to create a movement towards life planning. George was actually a math major at Harvard, who then became a CPA (and earned the Bronze Medal for the third highest score in his entire state on the CPA exam!), and only began to explore the intersections between financial planning and psychology after forming a niche financial advisory practice delivering advanced tax strategies for self-employed psychologists and therapists!
In this episode, George talks about his early career and the inception of life planning itself, how he ultimately transitioned away from and sold his financial planning firm to teach life planning full time, his now-famous three questions that he asks of new clients to get to know them and begin the life planning process, and the five pursuits that most clients articulate in the life planning process… which rarely have anything to do with “traditional” financial planning goals like retirement! Though notably, George doesn’t view life planning as an alternative to financial planning, but simply as “financial planning done right”.
So whether you’ve been curious to learn more about life planning in particular, or are just looking for ideas about a whole new way to approach financial planning (and differentiate yourself in a crowded financial advisor marketplace!), I hope you enjoy this latest episode of the Financial Advisor Success podcast!
What You’ll Learn In This Podcast Episode
- How George went from being a Math major at Harvard, to doing tax returns as a CPA, and ultimately transitioning into financial planning. [2:14]
- Why George believes that “freedom” is the most important aspect of personal and professional motivations. [5:51]
- George’s definition of life planning: The most efficient process for delivering freedom into a person’s life. [7:13]
- How life planning is distinct from the short- and long-term goals financial planners often pursue. [10:05]
- George’s three life planning questions he asks of new clients, and their typical answers. [14:38]
- How to work up to asking weighty, personal, and potentially awkward questions of your clients. [26:33]
- Two of George’s most important questions for clients: why are you here? And who do you want to be? [28:23]
- Why George always ended his first meeting with a soft sell, which often has clients dying to work with him right away anyway. [35:49]
- How the concept of life planning was initially popularized, and why it resonates with financial planners in particular. [44:48]
- Whether financial planning and life planning are complementary goals or on opposite ends of the planning spectrum. [57:17]
- What George hopes for the future of financial planning, and how we could improve the CFP curriculum around the world. [1:00:28]
- George’s thoughts on potential changes to the economy and society at large that would better align our lives with the goals of life planning. [1:08:41]
Resources Featured In This Episode:
- George Kinder - The Kinder Institute of Life Planning
- Unconditional positive regard concept from Carl Rogers
- Maslow’s hierarchy of needs
- Richard Wagner
- The Seven Stages of Money Maturity: Understanding the Spirit and Value of Money in Your Life by George Kinder
- EVOKE Life Planning 5-Day Training from the Kinder Institute
- The Intensive Registered Life Planner Mentorship from the Kinder Institute
Full Transcript: Why Life Planning Is Simply Financial Planning Done Right
Michael: Welcome, everyone. Welcome to the 15th episode of the Financial Advisor Success podcast. My guest on today's podcast is George Kinder. George is known as the father of the life planning movement, a way of delivering financial planning that focuses on delving into a client's real goals, the ones that go beyond the money, and help them to experience real personal freedom. And George talks about the life planning process that he created, about how to help clients figure out for themselves what that real freedom means to them, and turned it into a program that he's now trained for more than 3,000 financial planners across 30 countries on 6 continents.
What's fascinating about George though is that he actually started out as a math major in Harvard, and then became a CPA, earning the bronze medal on the CPA exam for the third highest score in his entire state. In fact, it was only after forming a niche advisory practice delivering advanced tax strategies for self-employed psychologists and therapists and going to some of their CE sessions to network that George began an exploration of the intersections between financial planning and psychology that led him to ultimately found the life planning movement and create his famous three questions of life planning.
In this podcast we explore both the history of life planning itself and George's three questions, how financial planners can better engage their clients, the five pursuits that most clients articulate in the life planning process which rarely have anything to do with traditional financial planning goals like retirement, and where life planning fits into the world of financial planning today.
And so with that introduction, I hope you enjoy this episode of the Financial Advisor Success podcast with George Kinder.
Welcome, George Kinder, to the Financial Advisor Success podcast.
George: Thanks, Michael. Nice to be here.
How George Went From Being A Math Major At Harvard To Becoming a Financial Planner [2:14]
Michael: I've been looking forward to this episode for a long time. A lot of people who read the blog and have heard me speak over the years tend to know me as the nerdy, wonkish, tax and financial planning guy on very technical topics, but the reality is my background was actually as a psychology major as an undergrad. And I've always had a fascination for the so-called "softer side" of financial planning, I'm putting "soft side" in air quotes.
And so I can't think of anyone who would be a better guest for us to start down this road and discussion of exploring that other side of financial planning besides all those tax rules and retirement research details. Then to have the man who's been dubbed the father of the life planning movement, George Kinder, to talk about all the things that are important in financial planning besides the technical knowledge that we also spend a lot of time focusing on when we study for the CFP exam.
So maybe just as a starting point, because I'm sure a lot of folks are not necessarily as familiar with you and life planning, can you just tell us a little bit about your background, and then we'll start talking a little more about life planning?
George: Yeah. Great, Michael. Actually, you and I are probably a lot closer intellectually than you might think in that I started as a math major at Harvard and really specialized in taxes and financial planning skills and really had life planning as something that I just did naturally, I didn't know that there was any other way to do financial planning.
My background is quite diverse. I entered as a math major at Harvard, minored in economics, but ended up as an English major because I think what I was most interested in mathematics were things that we might think of as concepts of infinity and I found much more complicated to understand plays of Shakespeare than mathematical formulas, for instance.
Michael: So math was fun until you got to the integrals, basically?
George: Yeah. Something like that, yeah. Yeah, yeah, very much. But I always had that real clarity of thinking as being something that was very important to me. And then in a similar way when I started in financial planning, well, one of the reasons that I got into it in the first place was that I wanted to do something else. And that might sound rather peculiar, but what I wanted to do was I wanted to do something more in the arts. I was really a poet and a photographer. And actually at that point I was a painter, I've become a photographer since then. And I was very interested in world religions and spiritual practice. So that saying in the '60s or '60s, "Do what you love and the money will follow," I never found anyone who would pay me for my poetry.
Michael: So that whole math/econ thing was kind of the fallback because at some point you got to get paid for this stuff, too?
George: Yeah, exactly. It was very useful to be good at it, so that's what I went back to. And so I started really doing tax returns as a living, won the bronze medal on the CPA exam when I took it many years ago in the mid-'70s.
Michael: For those who aren't familiar, the bronze medal for the CPA exam is when you're one of your highest scoring on the CPA exam in your state for that cycle?
George: Yeah, I placed third in the state and roughly 20th in the country, I think, at that time. I'm very proud of that and I don't think many life planners realize that I've got that as a background.
Why George Believes "Freedom" Is The Most Important Aspect Of Personal And Professional Motivations [5:51]
Michael: Yeah, yeah. So the first unknown thing about George Kinder, you were a CPA to start.
George: Well, I took the CPA course. One of the things about me from the get-go is that I've always been more interested in freedom then working at an institution.
Michael: So the CPA exam was fine, but a Big 8 accounting firm not so much?
George: That's right. Yeah, yeah. So I went out and I did tax returns for a living and advertised by dropping leaflets on cars throughout Cambridge. And I got many professors and entrepreneurs and psychologists and artists, it was a very interesting community. And it also enabled me to do spend a good part of the year writing, which was wonderful. But out of that work I realized that just as I was passionate about living a life of freedom myself, I saw many people kind of get pulled into work that they weren't all that happy with.
And so I began to ask the questions that life planning delivers for people. And the central questions really are about how do we find freedom and how do we get freedom. So I became very interested in delivering freedom to first my tax clients and then to my financial planning clients.
How George Defines Life Planning [7:13]
Michael: So maybe this is a good segue to talk a little bit about this life planning concept/phenomenon, I'm not even sure what to call it entirely. How do you define it? Right? This term has been thrown around, you're kind of credited as being the father that got all this going. It's like how do you define life planning?
George: Life planning is the most efficient process for delivering freedom into a person's life that I think exists. So it is a process that has been adopted by financial planners in particular, I think because financial planning is so holistic in its concern with all the aspects of money in a person's life. And financial planners in particular have gravitated toward it because in order for us to experience freedom in our lives most of us need to answer or resolve or address financial issues.
So in financial planning life planning is often considered the first part of financial planning in the financial planning process, the five or six stages, whatever it is. The first thing we're supposed to do is get to know the client. And that's what life planning does. Life planning is like the fiduciary standard on steroids, I don't think you can actually be a fiduciary without doing life planning. Because what life planning does is it gets to know the client so well in such an intimate and personal context that the person reveals to the advisor who it is that they really want to be, what it is that they really want to do.
And if you think about that, that's a very personal conversation, very reflective, requires a great deal of trust between the advisor and the client. And once they've revealed that, then the advisor builds into something that is profoundly inspiring for the client. And then works with that energy, it becomes so inspiring to the client to live the way they've defined as their life of freedom that the client pretty much solves all the problems and puts their energy into making it happen.
So it's a very powerful vehicle for delivering freedom, starting with trust and relationship skills, and then moving into inspiration, and then rounding it out with the solid foundation of financial planning.
How Life Planning Is Distinct From The Short- And Long-Term Financial Goals Financial Planners Often Pursue [10:05]
Michael: Can you help me distinguish this a little bit further? I feel like most financial advisors who are trying to do a good job for their clients would probably say they do a lot of that. They may not necessarily use the words that you use, but we all try to say, "I'm helping my client to work towards their goals." And certainly the most classic goal that most of us advise on clients for is working towards retirement, which is this moment of freedom where you don't have to work anymore and you can do whatever of life's leisurely pleasures you wish.
So are we just talking about another way to move people towards their goals or a different way to define the goals? Can you help me distinguish life planning from the kinds of goals we already try to help our clients work towards?
George: Yeah. That's really a great question. The goal we mostly choose in financial planning tend to come from or be structured in a similar way to the vehicles that we use to deliver freedom. So we have vehicles in retirement, in risk management, in investments, in estate planning, in cash flow. And did I mention retirement planning? So we have those vehicles, and so retirement becomes a major theme. And I think unfortunately we have a bias toward those vehicles. But when you ask anyone, even a financial planner, what they care about most in their life, it's very rare that they will mention a retirement plan or an estate plan or investments or taxes, that was the one I missed. It's very rare that they will mention that.
So what we do in life planning at the very beginning of the process is we let go of all of our preconceptions so that we can actually walk in the moccasins, so to speak, of the client. And we ask the client basically why they've come to see us. And at first they may mention all these things, the retirement and the taxes and the investments and all of that. And frankly one of the things that we've learned is that they mention those things because of media and our websites, that we tend to be pitching those sorts of things, but that's not what they care about. And if we pursue too much and too quickly those things, we risk the possibility that the client will never really experience freedom, and certainly won't experience it in the short run.
So if you take retirement as an example, what we might be aiming at and knowing that that does deliver a kind of freedom. One of the things that we discover in life planning is that we can deliver an enormous amount of freedom for almost everybody, sometimes within days, often within weeks, certainly within months and within a year or two.
So in a life planning process, when we get down to the life plan itself, we'll have the goals of retirement and the strategies of taxes and estate planning and all of the rest, and there will be some goal work in each of those areas. The passionate goals, the goals that bring the person alive is what we're most interested in. And those goals we want to access usually within the next couple of years, and often within the next few months.
Michael: So is the distinction then just this idea like retirement is some strange construct we've inflicted upon ourselves and we've all convinced ourselves that that's what we want to work towards because that's what we told ourselves, or kind of the media and society and some aggregate told us, but it's not really the goal we're supposed to be working towards at the end of the day?
George: In a way it's not really a goal at all, it's a goal that's been invented by fidelity and the tax regulations.
Michael: If you're in the asset business, telling people that they need to retire and accumulate a giant pile of assets to afford that retirement is certainly good for business.
George: Yes, yes indeed. Very good for business. You're familiar, I'm sure, with the three questions, which are one of the exercises that we use.
George's Three Life Planning Questions [14:38]
Michael: So talk to us about that, maybe for listeners who aren't familiar. We're talking about we help clients achieve goals, and sometimes they reach the goals in a matter of days or months. As you're talking about, I think most of us are used to the challenge that we try to do financial planning and the whole problem is, "Here's our strategy. Trust me, 30 years from now you'll be really thankful you did this." Like "spend less, save more, invest in these funds" kind of thing. Everything we do feels so long-term because it's so hard to move the financial needle in the short-term. So what kinds of shorter term goals are we talking about and how do you get to those things?
George: Great. And by the way, Michael, I love the long-term strategies and the long-term planning, that's all part of this. But one of the things that we're really trying to help the person with is to live in a way that energizes themselves so that they're much more successful economically with their work, they're much more alive in their family, they feel that their life is one that is flourishing with vitality. And so the kind of goals that we get to really are goals having to do, I think, more with meaning and perhaps happiness and fulfillment.
So let's look at that one exercise. Now I will say that I usually do, and I train people in, as many as four different exercises and this is just one of them. It involves three questions. And the first question is to consider what you would do if you win the lottery, if you had all the money that you needed for the rest of your life. Maybe you don't win the $200 million-dollar lottery, but you've got all that you need for the rest of your life.
Michael: You win a lottery for a couple million dollars, so in that classic sense all those financial shackles you currently feel about "I've got to work so that I can earn so that I can put food on my table and keep a roof over my head and put my kids through college and someday be able to retire," just sort of the mundane reality of the financial shackles that most of us live. So you win a lottery that's big enough, all that stuff is off the table.
George: Absolutely, that's exactly the question. And it loosens you up and you think about the tango lessons, the trips to Tuscany or to Hawaii, the fun things in life, spending more time with the family.
Michael: And you literally ask that to the client, like, "Hey, Mr. Client, I just want to do a thought exercise with you? Just talk to me a moment, let's pretend you just won the lottery and it's a couple million dollars and it's enough that you don't need to worry about work and financial issues to maintain your lifestyle anymore. What would you do?"
George: That's right. That's right. And in a way we're setting up the deeper questions that are to come. And the client may or may not know that. But the frame of this in a financial planning meeting is that in order to understand what your goals really are and for me to be able to really help you I need to know much more about your goals than simply have you fill out a questionnaire. "And so bear with me and tell me some of the things that would be really extraordinary for you to have the freedom to do."
So that's the first question. And you can imagine there's a lot of material things, typically travel comes up quite a bit, adventures and experiences, all of that gets listed.
Michael: And you would just kind of let the client riff on that for 3 or 5 or 10 minutes? What does that conversation look like?
George: Yeah. It can be a conversation or it could be homework. So I have a website that's a free website for consumers and this is one of the questions on there, and they would fill it out as homework. But then if they brought it in, having done it as homework, then the conversation is a very interesting one. You've got all the answers down there and you go through them. And one of the ways that you build trust and you build excitement around your relationship is that we train at Life Planners to be excited about these things, to understand that this is who the client has to be to live well. Not necessarily to all of these questions, but as we get to the deeper questions, question two and question three.
So question two is much deeper and you'd never ask this first because you have to build trust with the client first. And so question number two is a life or death question, it's asking the client if they went to the doctor and suddenly realized they only had 5 to 10 years left to live, how would that change things, what would they do, and how would they live.
Michael: So we had the first question, what if you won the lottery and the financial shackles are released and you can go off and do what you want, but it's kind of an unlimited time horizon question. It's like I'll think of some immediate trips I want to do, but this is open-ended. So the idea of question two then is what happens when we narrow this down further? So good news, bad news. Good news, you still won the lottery. Bad news, it also came with an unfortunate diagnosis that you may only live for another 5 to 10 years. "Now what are you going to do?" Is that the idea of the exercise?
George: Well, in a way, that's at least one idea for it and one function of it. Actually, we don't assume that we won the lottery, question number two is independent of question number one in a way. And what we'd like in the client is for it to be a bit more poignant for them. So the question is really if they discovered they only had 5 to 10 years left to live but they knew they were going to be completely healthy during that time, what would shift for them, how would they live their life, what would they do.
And, yes, it certainly helps in a wonderful way to prioritize question number one, but something strange and wonderful can happen in addition to that. And that is that sometimes you get someone answering question number two with completely different answers from question number one.
Michael: Which I suppose is part of the point, right? Like those disparities are where it gets really interesting, right? Like, "I removed your financial shackles, what do you want to do? Now I'm giving you a little bit of time on this earth, what do you really, really want to do? What are you going to prioritize now?" And then watch and see whether the answers change or not.
George: Exactly. And if they are similar to question number one, you're also going to get a winnowing out of the things that aren't as important and you're going to hone to those things that are. And if it's completely different, you're learning that there is a deeper level of meaning for this person and that level is extremely important, it's a life or death level, and it's usually something that doesn't pop up in your traditional financial planning questionnaire data gatherer, and often not in a meeting without first really winning their trust because it's very person, it's intimate.
Michael: So what kinds of answers do you hear? You said on number one you remove the financial shackles, "What do you do?" And I guess, not surprisingly, at least to me, thinking about even conversations I've had with clients that just had their retirement moment, their financial independence moment. There's some leisure activity, there's some travel, often there's some "see the world," have some certain experiences in life I always thought about having that now I want to go have. So what kinds of things start cropping up when you put this "you have 5 to 10 years to live" kind of time horizon on it?
George: It can vary widely, but two of the things that come up much more strongly than in question number one have to do with family and relationship and with kind of unfinished business. So it might be that they've lost touch with their sister and they really want to make that relationship come back or that they realize that their dad was really important to them and they never really found a way to express that. So family and relationship comes up a lot, but there are other things that are revealed there. And maybe I should go to question number three to look at what the real kicker is.
Michael: Okay. So what comes next in the sequence?
George: Yeah. So the final one is one that you definitely wouldn't ask a client without having real trust and having prepared them in a way, and these first two questions do prepare the ground for it. And the question is if you go to the doctor and you're feeling perfectly healthy, but the doctor reveals that you've had, without knowing it, an illness that has come to term and, in fact, you have only a single day left to live. And the question is not what would you do with the day, but the question is to absorb the shock of that information, that knowledge, and reflecting on what you'd anticipated accomplishing, being, or doing. What did you miss? Who did you not get to be? And what did you not get to do?
Michael: So it's kind of like, "Do you have any regrets?"
George: Regrets are part of it, and some people go totally to regrets. Sometimes it's the person really just feels that they're on a trajectory towards something and they haven't been able to really do it. But if they were faced with that moment where they couldn't now do it, then of course they would regret that they hadn't accomplished it.
What is extraordinary here is that the things that come up I think of as arising in five areas, sometimes I call them the five pursuits. And one of them is back to the theme of family and relationship, and that's the strongest one. Not for everybody, but it's there more than any other by far. The second most common one actually has to do with values, or if they're in a religious way it could be something explicitly spiritual or religious. The third most common is creativity, and that creativity can also be entrepreneurial creativity, it could be creativity in a business, but often it's something more in the arts. Those are the three most powerful.
And then two others crop up strongly, as well. One of them we expect from our financial planning education, and that is giving back. So we learn about that in our courses on estate planning, but it's a surprise. It's fourth, it's not in the top three by any means. And then the fifth most common one has to do with, I call it, a sense of place. And it could be that I live in the city, I'd love to have a place in the country, or vice versa. Or it could be something about planet earth itself and the environment. So those are the five.
Michael: So these are the themes of the things that people tend to put forth by the end of the third question?
George: Exactly, right. And what a life planner will do is they will build what we call a torch, a vision for a client, they'll paint the picture of actually delivering a life that has each of these things realized, fulfilled.
How To Work Up To Asking Weighty Life Planning Questions [26:33]
Michael: So how does an advisor build up to this? I'm just imagining an early or a first client meeting, like we're going to do financial planning and they come in for the data gathering/discovery meeting, whatever you want to call it. And do I start asking my usual financially-oriented data gathering questions, and then some point I'm going to lay some life plan and jujitsu on you now, "Watch this," and then shift the conversation into these questions? Just I imagine they're so weighty and they're so not in the line of the usual kinds of things that a lot of us ask as we're just trying to gather the information, the data. Does this create weird moments in the meeting? Do I have to have a whole other meeting for this? Do I do this in my meetings with clients? How does this flow from a practical perspective and now just be some horrifically awkward conversation with the client?
George: Yeah, great question, Michael. First of all, clearly you need to have prepared the client for this when they come in. In the old days with my clients I would, in a very simple way, I would just simply say, "In order to do financial planning with you I need to understand who you are. I've got a series of exercises that I use that most clients find to be very meaningful for themselves and they're very helpful for me to know then how to actually set you up with the right investments, to actually make your estate plan work in a way that's appropriate for you, to set up the retirement in the right way. So does that sound like a process that you'd like to do?" I'd say almost always they say, "Yes, that would be great?"
Two Important Questions For Clients: Why Are You Here? And Who Do You Want To Be? [28:23]
Michael: Right, right. Who would deny, like, "No, I don't want to tell you anything about me, just do my plan," right? Yeah, I get it, it's kind of a natural inviting. Even I like the line that goes like, "In order to do your financial planning well I need to understand who you really are, and many of our clients find this personally meaningful, as well. Would it be okay if I asked you some questions?"
George: Exactly. And actually what we do with a classic client coming in who's going to be a significant, one of your top 20 or 30 clients, maybe not your very top client. So you know the number of hours it's going to take to do the financial plan and how much time you would spend with them. We take the first meeting and we don't ask these questions in the first meeting, we sit with them and we simply ask them... We've prepared them with the website, we've prepared them with e-mails, they might be prepared because they've been referred, most of our clients are referred. And those referrals come with meaning, meaning that their friend has told them the kind of work that a life planner does. So most life planners get clients who are eager to do this kind of work, it's not awkward at all for them.
So the first meeting. And by the way, there's data gathering throughout a series of meetings. The data gathering, you've sent out a data gatherer already and they've filled that out, you've reviewed it perhaps before they come in or perhaps they just hand it to you when they come in and you look at it at the very end of the meeting. Typically I would glance at the income statement and the balance sheet, the cash flow and the balance sheet, just glance at them because in a moment you can tell what the economics of a person's life are just by looking at those.
And then I would say, "So, what brings you here? What would you like to accomplish?" And if they just go to, "Well, I just want to take care of my 401(k)," I'll say, "No, no. I'm in the financial planning business." In the old day I didn't even mention life planning. "I do financial planning, as you know. And so the question is who do you want to be? What do you want to accomplish in your life? And how would you like the finances to support that?" So I might frame it like that. But usually if I ask, "So why are you here?," just a question that simple leads to a conversation that goes on classically for a half-hour to an hour, with intermittent pauses and my asking very simply, "Anything else?"
And the way that that's facilitated, it's a conversation skill that we train our advisors in, it's facilitated by having a great deal of empathy. So if the client seems nervous or anxious about something, you go, "Oh, I'm so sorry," or, "Oh wow." So you share their feelings. Or if they seem to be excited about something, you go, "Wow, boy, that would be great." And just that simple. Not asking clarifying questions because then it becomes your meeting.
So what you're trying to do is have a very open-ended kind of approach so that the client moves into what is most important, what's most deeply urgent for them to share. Most clients come in to see us with something that's really quite important about themselves that they'd love to share, and most clients leave disappointed that they were never able to share it. And it usually involves something that has been very challenging for them around money or something that they aspire to but that's very personal.
And most of us don't let the clients get there because we ask, "Hey, okay, but what about your retirement?" Or they start to tell us about, I don't know, their house on the beach and we dive into architecture, the cost of the house and all of that. And the client very quickly begins to think that we're not capable of, in fact, going where they really want to get to, which was that their dad has the strings on the trust that the family all will inherit in some way and he's not a very nice guy, and how do we get through that, how do we work through that. Or that they aspire to play jazz in a club and they've never told anybody.
So the first meeting builds trust, is what we do. And we really are great listeners. And the last half-hour or so we do whatever remains in the data gatherer that we've seen and we do our bells and whistles, we share with them why we're a great person for them, what is it that we really specialize in that seems to touch on what it is that they're most concerned about financially.
And so the client leaves the meeting with a great sense, like they're eager to come in and talk with you in that second meeting and they really have the sense at the same time that you're great at the financial skills. So then it's the second meeting where we introduce the questions.
Michael: Then you've got to back me up a moment. If the questions come in the second meeting, so the first meeting is I'm still doing my data gathering kind of stuff, I'm asking some probing questions, but I'm not getting to the three questions until a second meeting?
George: Right. And the last half-hour, I would save that, or maybe the last 45 minutes, for whatever remains of the data gathering that might need to be there. So usually a meeting lasts somewhere between an hour and a half and two hours. And so somewhere between a third and half of that time, at the end only, occurs the financial element so the client is confident in you as a financial advisor and sees that you're going at the right things that need to be gathered or need to be understood.
Michael: Okay. So how do I explain the client coming back for the second meeting? If we were having this discussion the first meeting about some of their goals and dreams and hopes and wishes, and we spend half to two-thirds of the meeting on that, and then the last third getting into the data, then I say, "And we're going to do one more meeting where in order to go and really do financial planning I need to understand more of who you are, so I want you to come back in and we're going to ask some more questions"?
George: Well, usually I've given the three questions, it's part of the data gatherer. And usually the client comes in, and I don't know how many of your clients come in with everything fully prepared.
Michael: Yeah, good point, not very many.
George: Yeah. So we figure that that's going to happen and we go listen for the next meeting, "These are the things that we're really going to focus on. And we're really going to go at the vision, we're excited to work with you. We're confident from what you've said that we really can deliver something to you. And what we're going to do next time is we're going to fine-tune the vision so that we are really clear, so that I'm really clear as your financial advisor who is it that you want to be and what is it that you're aiming at. And I know as you've done some of these questions but not all the others you've seen that they really get at the answers to that. So we're going to be covering that together or covering that with you and your spouse, and that's the function of the next meeting so that I know exactly what we're aiming at, what's the trajectory here, what's the prize."
Why George Always Ended His First Meeting With A Soft Sell [35:49]
Michael: So how do I make the business case for this? Because I'm sure there are at least a couple of advisors now that are thinking like, "Great, so we're going to do a data gathering meeting and we're going to ask some touchy-feely questions, and then we're going to do another data gathering meeting and add more touchy-feely questions. At what point do I get to give them the plan and get paid for my work?"
George: Well, one of the things that's wonderful about this is that you typically get paid at the end of the first meeting for everything. What I would do, I've always done a soft sell. And so at the end of the first meeting I'd go, "Well, you've seen our contract, we don't need to go over that now, we can do that any time in this financial planning process." And typically at the end of that meeting, because you've listened to them in a way that no financial advisor has ever listened to them before, they go, "No, no. I want to sign on, I want to get going on this." And so they're ready to sign the AUM and make the business go basically right away.
Michael: Because they often just get so energized by this conversation, they just spend a while talking and dreaming about all the stuff they want to do, and so now they're excited to sign up with you to do it?
George: Exactly. Everybody else has been talking about the 401(k) or the annuities or they're talking about a tax strategy. And here they've talked with someone who really listened, wasn't talking at all, really just listened to who they really wanted to be. And it's so meaningful for them. And then you've shown in the last half of the meeting or the last third of the meeting that you're really pretty savvy with all the financials, too. Why would you want to go anywhere else?
Michael: So how did you come up with this process of doing this? You're doing, I guess, tax returns, you said, early on after graduating from college and getting your CPA exam. So at some point you just decided to start asking some of your tax clients really interesting questions? How did this evolve in the early days of George Kinder, financial planning and tax practitioner?
George: Great, great question, Michael. So I think there are two things, one is what was happening inside me personally and the other is what was happening in the environment that I was working in as a tax advisor. Inside me, as I mentioned earlier, I was passionate about living a life that had freedom in it. And freedom didn't mean doing tax returns for a living. So freedom meant being much more connected to the arts and to culture and to spiritual practice and being in nature more and being in relationship. Many of those things would energize many people. So I was passionate about those things and passionate about having a work-life balance that delivered primarily those things. So that was a passion and I was constantly trying to figure out how do I budget my time and budget my work so that I can really live in that free way more of my life.
And then in the environment in which I was working in Cambridge it turns out, I don't know why or how, but a huge percentage of my clients, at one point I think I had 500 of the 1,000 psychologists who work in the Boston area as clients.
Michael: Was this a deliberate pursuit of a niche or just accidentally ended up that way?
George: It was kind of a mix. I didn't really go after them, but what happened, I was very curious, I bought the whole Prentice Hall, or CCH, set of books, it was like 13, 15 volumes. And I was fascinated with how do I deliver the most freedom to my tax clients. And so I went out and I studied tax deductions. And one of the things that I almost invented...
Michael: I'm sorry, I just have to pause on that for a moment. "I wanted to figure out how to give my clients more freedom, so I went out and studied tax strategies." All right, I'm sorry, I just had to observe that. Please, keep going. That's fantastic.
George: Well, it was similar in a way to the kind of work that you do because you do that all the time. Those of us that read you, you're constantly giving us new insights into how to actually deliver greater degrees of freedom having to do with the economics of a client situation. And that was what I was passionate about, as well. And it was my narrow focus at that time before I got the CFP exam under my belt, was taxes.
And so one of the things that I didn't quite invent but virtually did was that I noticed there was a case, I always felt that a therapist should be able to write off their personal therapy, which was a huge expense for these guys, $5,000, $10,000, sometimes $20,000 a year. And that they should be able to write that off as business expense. Why should this go on the Schedule A under medical deductions? Didn't make any sense to me at all. So I crafted the argument and then I went and I studied. And what I had to do, I actually had to go to Harvard's libraries to find the case. And I studied and tried to find a case about this. And I discovered a case where someone actually made that argument.
And so I just said, "Okay, that's what we're going to do." And imagine it as a Schedule C deduction for self-employed therapists versus something over in Schedule A where you had to weigh it against all the other deductions and everything.
Michael: Yeah, and thresholds and back then and now face itemized deduction.
George: Exactly. So what happened was therapists love me and they flock to me. And being curious and engaged, I then became really interested in what else might be deductions for them and I started to go to all of their CEU courses. So I'd spend weekends and weeks actually going and learning their skills.
Michael: So you started showing up at like Carl Rogers humanism discussions.
George: And Carl really influenced me a lot in terms of unconditional positive regard. That's what we do in life planning, we give the client that much belief. So I learned a lot. So internally I was passionate about my own freedom, and then externally I had this group of therapists that I was learning from, engaging with. And I learned how to listen from them really was what happened. And I basically came back and taught them this way of delivering freedom.
So even now when I do a five-day training for financial advisors, occasionally I get a therapist. And once I had this absolutely fabulous, perhaps the most famous, therapist in all of the Netherlands and his wife, and they're both famous and had been writers in the major editorial columns in the papers for years. And he came and he took the five-day and he said, "This is what therapy is going to be. What you're doing is the right way to do it." Instead of going back and focusing on the past and how since you're not able to do the life you want to be or you must have done something wrong in the past, "Let's go look at it and discover the feelings."
We ignore all of that, we don't pay any attention to the past at all. We empathize if the client brings up something that was painful and we show them that we can really be there for them in that way, that they see that we're a sympathetic human being. But what we do is we aim at, "Well, what would be fantastic? What would be a great life?," and then, "Let's make it happen. Not in retirement, but let's make it happen now." Clients just love it. Whatever neuroses just melt away.
Michael: And I almost have to imagine that at a point that you had this, well, I guess what started as a tax-based niche in psychologists and therapists, and started evolving in your services. The psychologists and therapists themselves probably ate this up in particular, like, "You're asking me all these humanism, Maslow's hierarchy style questions," that they're trained to be aware of, but they've never had it applied to them.
George: Yeah. And was, I think, astonishing to many of them was that I didn't go back in the past to solve the problems, I just looked at, "What do you want? And let's make it happen." And then applied financial planning skills to make it happen. But the key is getting to that depth where you're delivering what the client really wants, what more than anything would deliver freedom and a flourishing vitality into their life.
How The Concept Of Life Planning Was Initially Popularized [44:48]
Michael: So when did it start to go broader? Right? It started out you were doing this thing, you had this niche with psychologists and therapists, your practice started evolving and asked these interesting questions that you're absorbing because you're going to psychologist CEU classes to connect with the niche that you're serving. So at what point did it shift from just, "Hey, there's this guy in Boston named George, he's a tax guy, but he does some cool financial planning questions"? When did it start evolving from George the practitioner into George, this guy that teaches this life planning system to other people, to other advisors?
George: Yeah. I think probably the key moment was a moment when I was in Maui already living the life that was my life plan. And my girlfriend at the time happened to see some blurb that came in from the ICFP, which is, as you know, the precursor to the FPA, along with the IAFP. And it was a call to speakers. She said to me, "You got to speak at this thing." And I went, "No. No, no, no, no, no." She said, "No, I'm serious, you've got to speak at this thing." And finally she threatened my, she said, "I'm leaving if you don't call these people up and speak to them and give a speech."
Michael: "And just tell them about this thing you're doing because it's really neat."
George: Yeah, exactly. And so she dialed me in and, "Okay, all right, all right." I got on the phone and talked to, I can't remember who it was in the old ICFP, and they gave me a speech. I was on a panel and one of the great NPR journalists kind of hosted the panel. And there were a number of good people on the panel that are still out there, including Jerry Detwiler and a few other people. I talked and at that meeting I met Dick Wagner. And Dick was, I think, president-to-be, president-in-waiting, however that designation is.
Michael: Yeah, president-elect I think was their label for it.
George: Of the ICFP, and connected with him.
Michael: Okay, so this is early '90s? I'm trying to think, I think Dick Wagner was ICFP in the early '90s. Okay.
George: We decided to give a joint presentation. And I figured, "Dick has got all the politics, knows all the people, and I don't know anybody. But I've got some pretty neat stuff and Dick loves this stuff and loves design on his own." So I thought, "Let's just share the platform." And we gave one of those speeches on a retreat where it was given three times and it gathered momentum. So by the third time people couldn't get in, couldn't get in the door it was so popular. And I introduced the three questions and some of the other exercises, and then we set up the Nazrudin community out of that, which was an exploration on the human side of money.
Michael: So for those who aren't familiar, can you talk for a moment about Nazrudin and what Naz is?
George: Yeah. I'm not a participant in Naz anymore, so I know it more in the early days. But I think it still does the same thing, and that is that it is a very open forum where it's a wonderful way of organizing an event, a convention, whatever you call it. Nobody knows coming in what will be presented, but the people come in and they present what they would like to present the night before the main event, series of events. And the community votes on which of these things they'd like to see.
And so you get some really interesting kind of hot-of-the-press topics that are facilitated, so to speak, and most of them having to do with kind of the human side of money. So there might be psychology, there might be spirit, there might be children, it could be all different kinds of things.
Michael: But everyone knows they're coming together for some kind of conversation around life planning? I'm just imagining if everybody shows up and just say, "We'll talk about whatever everybody feels like talking about when we get there," you still need some binding themes so people know what kinds of topics to put forward.
George: It tends to be life planning, how do you work with families in your community perhaps. People have all different kinds of topics, all related to them professionally primarily around the human side of money.
And so it was a very exciting and dynamic place and it's where I gathered with this community the ideas that came out as The Seven Stages of Money Maturity, which then created quite a sensation as really the first life planning book, so to speak, but that was aimed at consumers, as well. And I began to give speeches all over the place to all the major financial organizations. And a few years later, as I gathered community, I would go to the FPA and I would hang out a lot with the global community because I was fascinated with what was happening globally and if we couldn't bring life planning to them. And by connecting with that community we now have life planners in 30 countries on 6 continents and have very strong communities in Europe and in South Africa, in India, really all over the world.
Michael: Can you tell me a little more? Just what did that evolution look like? So you do a panel at ICFP, Dick Wagner loves it, he starts bringing you back, you do some more sessions, people start following it, the Nazrudin community starts to form, you get ideas that germinate, your book Seven Stages of Money Maturity. Are you still doing your life planning practice for clients at this point, as well? Are you actually starting to train other advisors yet, or that's still in the build-up stage?
George: Yeah, great. I sold my financial planning business I think in the early '90s shortly after I wrote The Seven Stages of Money Maturity, which was 1999. And one of the things I did with that book was that I designed The Seven Stages of Money Maturity course at the same time. And so there was a period of time when every single president of the FPA, year after year after year, came to that course. And so it was very popular. And we had a pre-conference giving the course at every FPA event.
So I was beginning to train advisors and I was selling my business and still working on with the firm that I sold the business to, but slowly transitioning to Kinder Institute, which was the training vehicle. And one of the things that I realized was that Seven Stages of Money Maturity has a lot of the psychological influence of my early life coming in. And so a lot of people have actually misinterpreted what I think of life planning, as it being largely a counseling kind of approach. And I think of it much more as delivering freedom.
In fact, I think that one of the things I'm working with now, as you know, is this book on civilization. I'm thinking about democracy and I'm thinking what we need in both democracy and in finance is a world where everybody believes in freedom and believes in it for the person that they're sitting with. So the skills of EVOKE, of life planning, are the skills that really we need throughout civilization. Where we're facilitating people's freedom, again, whether it's in economics or it's in democracy or it's in financial services.
So what I realized was that people taking the two-day were going off and they were trying to do life planning just with the three questions and with a few other exercises. And they were often bringing in psychological questions that were getting them over their heads, basically, in territory that they weren't trained to do.
Michael: Well, because I know there have been critics already out there around life planning that have raised the question, "I'm here to be a financial planner, not a psychologist. I don't feel like this is my domain."
George: And I feel that, too. I completely identify with that. But I don't believe you can financial planning without having a focus on freedom. Because what are you doing it for? What does it mean? If the person hasn't articulated who it is that they really want to be, what it is that they really want to become, how can you possibly do financial planning? How do you know what the goal is? How do you know what to aim at? You've got the ladder on the wrong wall. Your ladder is on the wall of money and on all the skills you've been taught in the financial planning profession, not on the client's wall.
So I completely agree, but you can't do financial planning without knowing what freedom really means for a client, and knowing it deeply and profoundly so that you actually tailor your financial plan to that deliver. And seeing that financial advisors were missing that and they were going off more into a therapy kind of orientation was what caused me to create the five-day training which we call the EVOKE training, which is the training on the process of one meeting after another after another, leading the client through a financial planning process that delivers freedom to them.
Michael: So at this point there's two programs for advisors that actually want to try this or want to get more familiar with this? There's Seven Stages of Money Maturity which is a two-day workshop, and then EVOKE which is a five-day training?
George: Yeah, that's right. And there's a designation, we have a registered life planner, which includes one more, it's a six-month mentorship with a trainer really using EVOKE with their clients and coming back and doing case study. And it all is around a community of usually 10 to 12 people, along with a couple of trainers.
Michael: Okay. And out of curiosity, what does it cost for someone who wants to become a registered life planner? I guess just wants to go through some of these processes and check it out for themselves.
George: The full cost for the full program of the two-day, the five-day, and the mentorship is around $9,000.
Michael: But it's broken in to pieces, like you don't have to be all in or bust?
George: That's right, that's right.
Michael: So if people are curious, where would they start? Do they start with one of the workshops? Do they start with one of the books, like read Seven Stages of Money Maturity, if you want to start going a little bit deeper into some of this?
George: Obviously the books are the cheapest way to kind of dip in. And the Life Planning for You book is a great consumer book about life planning that has the EVOKE process embedded in it and it's tied to a free consumer website. So that's kind of fun. And there's an advisor book called Lighting the Torch, but it's 10 years old at this point. Personally I think that the understanding of life planning is so experiential and it's so important that in order for us to really be great life planners that we actually have experienced it and that we live our life plan.
There's nothing better than coming to a five-day because that's where you get together with 10 or 12 other people and you pair up with one person and you spend the entire five days life planning them and they spend the entire five days life planning you, along with the coaching of two, three, or four life planning trainers. So it's just a fabulous way and you exit the five-day with this inspired vision of who you want to be, including your entrepreneurial business, as well as a very strong foundation in how to actually deliver it meeting by meeting into a client's life.
So that would be where I would go. If I were a youngster or new to financial planning or interested in life planning, that would be the first place I would go.
Whether Financial Planning And Life Planning Are Complementary Or At Opposite Ends Of The Planning Spectrum [57:17]
Michael: So I'm curious, there's a lot in this debate out there about life planning. So on the one end, as we touched on earlier, we have the folks that suggest it goes way too far into psychology and financial therapy and is better done by psychologists or should be a discipline unto itself. And then at the other extreme I know some who would just suggest that basically all financial planning in the end comes down to the ways that money influences our life or can be used as a tool to achieve goals and that life planning is just financial planning done right, or financial planning done well, or financial planning done best.
And so I'm curious what your view is on this. Are financial planning and life planning opposite ends of a spectrum, the same thing, complementary things? How would you frame it?
George: I think that personally I don't know how you do financial planning without doing life planning. Because what happens is that you don't have a clear idea where you're going. It's life planning that tells you who the client is and what they want.
So I see this as financial planning done right, basically. But the other thing about the therapy piece, as I think I mentioned before, I don't think life planning has anything to do with therapy. We have some overlapping skills in that a great financial planner who is a great life planner is a great listener. And that's fundamentally what a great therapist is, is a great listener. But therapists then use a skill set that goes into your past childhood experiences and unravels them in some way. A life planner doesn't do that, a life planner looks at what your dream of freedom is and simply empathizes in the challenging places that you might have and gets inspired for you with this Carl Rogers quality of unconditional positive regard and really looks at what does freedom look like for you, "Let's deliver it," and applies then the financial architecture to that.
So that's how I think of it.
Michael: So that distinction that you'd make from sort of psychology and financial therapy is that those tend to be backward-looking, whereas financial therapy is still in that sort of financial planning context. We're forward-looking, we're talking about goals, we're talking about what we're moving towards. We're just trying to come up with a better way to articulate what we're moving towards, and then use money as a tool to get there?
George: Yeah. And it's really a process, it's a short-term process and it delivers the client into freedom. Whereas therapy often is a very long process where one investigates and feels and dives into problematic areas. Whenever there's a problem in life we kind of go back in therapy and dive into problematic areas where we first had that kind of experience. Something very different here. Who is it that you want to be? Let's talk, have a serious conversation, one that's profound for you. What is it that you really want to accomplish in life? And then let's make it happen.
What George Hopes For The Future Of Financial Planning [1:00:28]
Michael: So if life planning is financial planning done well, is this just a flat out gap in the CFP Board's curriculum and topics around financial planning? It was a few years ago we formally added this category called client communication and trust to at least recognize some of these dynamics as part of the educational curriculum. Would you just view this is still a gap, this is still a thing that we need to teach and train all the way down to the CFP Board Registered Programs level if we're going to move financial planning forward? Or does that overstate the case?
George: No, I think that's right, I think that's going to be essential. Yeah, no, I think that's right, Michael, that's how I feel.
Michael: Okay. So maybe if there are folks in academia listening, contact George about making undergraduate educational curriculum to tie the training so we can teach in the student format as well as at Kinder Institute for experienced practitioners that want to go back and do this or redirect their careers in this direction?
George: I'd be delighted. Absolutely.
Michael: Fantastic. So where do you see the industry going forward here? As someone that has seen a lot of financial planning, has even seen it across multiple countries and continents, do you think this is where we end up eventually? Are we not going to get there and we're going to end up with two channels at some point of the more numbers-oriented planners, the more life planning-oriented folks, and this becomes a niche, albeit a thriving one? How do you think this plays out from here?
George: I think one of the ways I like to think, and it's really how I'm thinking in the new book that I'm writing, as I mentioned, on civilization, is not thinking just now and short-term. We tend to get bogged down in obstacles and problems if we do that. But thinking out dozens if not hundreds of years and thinking what would be ideal in financial services. And I think there are a number of things that would be ideal. And so that's where I would assume that we're headed.
And the first is that the world of products and the world of advice get completely separated so that there's never a confusion in the client's mind. And we're trying to do this with more transparency and more rules and identifying something that we're calling the fiduciary standard, and those are all very good things. But I think we need to go much further with all of that and make the world of products and product companies completely separate from the world of advice so that advice stands on its own and, in fact, is the key to delivering freedom across all levels of society. So one of the ways that I think of financial planning is as the greatest of all professions because it delivers freedom into people's lives. So that's where I think we're going.
And I think in terms of the numbers versus the life planning, I think that's a short-term issue. It's that we've come in, not necessarily the baggage, but the history of a numbers-orientation and a product orientation. And we need to realize that the nobility of financial planning is in delivering freedom. And the other thing that's, to me, very interesting about this is that that nobility is something not only the profession is called toward, but it's also what the country, what democracy, what the world is called toward.
And this brings up a couple of things for me in terms of where we're headed and the influence that as financial planners we will have. And one of them is that everybody is meant to live in freedom. So it's not something that is just for those who can afford our million-dollar or $5-million-dollar or $10-million-dollar minimums. Everybody needs to live in freedom and the EVOKE process, the life planning process is something that can deliver that to people.
So one of the things that I think will happen is a democratization of this life planning process so that everybody experiences it. And now I'm forgetting what the second theme is, but maybe I've incorporated them both, the democratization and the delivering of life planning to everybody.
Where we really need to look is as if we were dozens of years from now, even hundreds of years from now, looking back and thinking, "What would have been best? What would be best for everybody?" And one of my thoughts is that products and advice need to be completely separated. We're going through all this work around fiduciary, around transparency, and all of that, and it feels to me as if we're just doing the bidding of the product companies, whether they're brokerages, insurance companies, banks, or whatever. And financial planning is really the thing that clients need and clients want. Great advice is what should be running the financial services industry, not great products.
Michael: So kind of akin to the medical industry where we just... Well, we don't get rid of the products, right? There are still drugs and they're very valuable and they do very important things, but we completely separate the medical advice practitioners from the drug companies. And the doctors aren't the drug sales people, the doctors are the drug gatekeepers, it kind of flips the relationship around 180 degrees.
George: That's right. And of course one of the things that's a little frustrating for me, having been around in this industry now for going on 40 years now, is that we've had this idea for that entire time. And a little bit has happened maybe, a little bit. We could certainly crow about the development of financial planning and the development of life planning. But, in fact, here we are, we're still debating getting a fiduciary standard that our wise predecessors did back in 1940, 1941. It's kind of crazy that the power is so much on the product side of the business, on the big industry side of the business, and not on the consumer side or the advisor.
And I think the main thing that has to drive this if we're going to shift from financial advisors having the lowest trust level, down there with used car salesmen and politicians, that the only way we're going to get out of that is by understanding that, in fact, the nobility of financial planning is that we deliver clients into freedom. We have all the skills to do that, whether we're talking about our skills in taxes and investments and all the rest or we're talking about the listening skills that we're developing in life planning. Our mission is to deliver people into freedom. And when we understand that and we take the bull by the horns and we say "no" to the product companies and the political influence that they've had, I think we'll begin to see something. But that's going to take quite a movement on our side and perhaps getting consumers to understand what we're talking about.
Michael: So how many people are practicing life planning today? And I mean that in the formal sense of you've trained them, you put them through something, I guess other trainings or full registered life planners. I don't know if you keep track on both sides.
George: We do, we do. First of all, the books, just the books, the books have sold roughly 50,000 copies. So there's a lot of people out there who are familiar with it, most of them are financial advisors, and many of those people will be dabbling in life planning and some of them will be very good just naturally. The trainings we've given, the two-day training I think we've given to close to 3,000 people now, maybe a little bit shy of that. The five-day training is probably, oh, it's less than 1,000, it's probably 500 or 600 people. And registered life planners, we may be getting close to 400 of them. So it's a much smaller number of people who are really dedicated and do their CEUs and all of that. So that's the numbers.
George's Thoughts On Potential Changes To The Economy And Society That Would Better Align Our Lives And The Goals of Life Planning [1:08:41]
Michael: Where are you focused today? Are you still day-to-day immersed into the Kinder Institute and doing trainings or are you off thinking of the next great thing? Where is your energy now?
George: I'm engaged with Kinder Institute on a daily basis. I still give a number of the trainings, but I think most of the trainings are now given by professional trainers that we've trained and registered life planners. My passion has always been freedom, and it's been a passion for myself personally and it's been a passion to find a way to maximize freedom throughout a civilization.
So when the banking crisis came along and I realized just looking at the massive settlements that all the great financial services companies were fined with and how this had gone on for so many decades, I decided to write a book about civilization and the way that civilization and financial services within civilization, economics, and politics, the way that I saw it working, that it might work to actually deliver freedom into people's lives. So the book that I'm writing is about civilization right now and there's some unusual ideas there that come out of the conversation that we've had and come out of our financial planning background, Michael.
So one of them is if you go back to Adam Smith, who we all have revered for many good reasons, and you look at how his economics is based on self-interest and it's based on a moment of transaction and what occurs in that moment. I think that many of the externalities of the world that have given us problem, I think the externalities of war, the externalities of massive inequalities, the externalities of unconscionable pollution at times, externalities of cynicism, the polarization we find in politics today, I think that many of those come from the Adam Smith perspective. Much good has come from it, as well.
And so I'm actually re-visioning both economics and freedom and democracy. And there are two fundamental concepts that I'll throw out to you as one of the closings for this conversation. But one is what if instead of self-interest we had an economy that was based on self-knowledge? What if instead of self-interest even in our democracy it was self-knowledge that it was based on? So that's one notion. And the other notion is what if instead of a moment of transaction the focus in economics was on moments of freedom? What if the fundamental economic unit was a moment of freedom, not a moment of transaction? How would that shift our understanding of economics? How would that shift the externalities that might arise throughout society? And I think that the changes would be phenomenal for the better.
Michael: Is that kind of akin to some of the discussion I know that's been out there in the economics world that we need to stop measuring GDP, gross domestic product, and we need to start measuring, I forget what the label is, but like a gross happiness product, like a gross well-being product, something that you set the measuring stick as the well-being of the population, and then optimize for that? Because when we set the measuring stick as GDP, we optimize for economic output and sometimes forget the harm that that causes along the way.
George: Yeah, that would be one of the elements. I differ a bit from the happiness school in that I think, you can see from the questions, I think that we're actually vitalized much more, we feel a flourishing in our life when we address fundamental question of meaning, and there's a lot of happiness that comes from that.
So I would differ a bit. But, yeah, certainly, that would be one of the themes that would be in this. I'm looking at markets, I'm looking at advice, I'm looking at products, I'm looking at entrepreneurial spirit, which I think is what life planning unleashes, and then I'm looking at democracy, media, and leadership. And I think if we don't address all of those issues with this perspective of several hundred years out looking at what really would create a great or a golden civilization, if we don't address all of them now, we have these horrific externalities that we're facing of artificial intelligence, of cloning, clearly of war and of financial crises, of inequality, of global warming.
And I think the technology, one of the fellows who invented the Internet, this wasn't Al Gore of course, but it was one of the fellows how really did invent the Internet our of MIT, used to say that the extraordinary thing about human beings is that they can design systems that are far more complex than they know what the outcomes will be. And this is one of the things that we need to address.
And another way of framing that that is one of the frames for the book, has also been said many times, is that we're such an extraordinary species, we have done so much brilliance in the realms of technology. You and I expect to live decades longer than our great-grandparents did. There are just phenomenal things, and what we can do, communicating around the globe. But the one thing that we haven't developed in all that time and grown with is the human heart. We've got a brilliant mind that's developed the universe of human beings, but not a brilliant heart.
And so one of the themes of the book, as well, and life planning is very related to this, is how do we embed a brilliant heart into these systems so that we know that civilization is sustainable and will deliver freedom with integrity for many centuries to come.
Michael: And when does this come out? Are you publishing the book now, it's out soon?
George: I'm doing a very quality draft of it right now, I expect the final draft will be done by the end of May probably at the latest. And so I would expect the book to be out in early fall.
Michael: So is there a working title that people should watch out for, or just stay tuned for the Kinder book when it's out?
George: What I'm telling people is that it's a book on civilization, but I'm not giving out the title just yet.
Michael: Okay, all right. We will watch for the Kinder book then.
George: Very good, very good.
Michael: So as we get in the end here, this is a show about success, advisors who are successful, trying to help clients towards success. And one of the things I've long observed is that success means very different things to different people. And so I think not only built a successful business, you created a successful movement in helping advisors to be more successful with their clients, so it's very meta. I'm curious from your perspective then how do you define success?
George: For me I think what success is is maximizing the moments of freedom that I live in throughout my life. And part of that freedom for me is maximizing the amount of freedom I can deliver to people around me. So moments of freedom is a very small thing, but I think it goes down to that. How many moments in a day do we experience a real vitality, a flourishing quality inside of our life, an excitement, a delight? So it's not about so much about external things other than wanting to spread this so that this happens for as many people as possible.
Michael: And I think there's an interesting context to that, that it's sort of this recognition that the success and the sense of freedom will be fleeting, right? Because these are moments, it's not like success is when you manage to live freedom 24/7, 365 days a year, right? There was an interesting context to me of how you framed that. We're just looking for the freedom moments in the day and at least being able to maximize those moments when they come.
George: That's right. I think that's right. Yes, I'll just leave it at that.
Michael: That's a fantastic place to finish. Well, thank you, again, George Kinder, for joining us on the Financial Advisor Success podcast.
George: Thank you, Michael. It's been fun. You are quite a listener.
Michael: Well, thank you, I'm just trying to take it in and learn from the masters.
George: Wonderful. Thank you so much for doing all of this.
Michael: Thank you, my pleasure.
Tommy Sikes says
Wow. Terrific episode Michael!
Michael Kitces says
Thanks Tommy! Happy to be of service! 🙂
Meg Bartelt says
I think the line between therapy and life planning is a bit murkier than Mr. Kinder presents. It is true that SOME styles of therapy are backwards looking. But there are also many that focus on the Now and the Future. So those styles of therapy have the potential to overlap with Life Planning a lot more. This is not necessarily a bad thing, but it does mean that we have to pay closer attention to not stepping outside our training, our wheelhouse as financial planners.
Dave Arey says
Products and Advice need to be completely separated. AMEN. Fabulous episode!
Josh S says
great interview until the 7:50 left mark. Adam Smith, of all people, and his philosophy is the cause of all the bad externalities in the world? Are you kidding me, George??? THere was no war, hunger, inequality until Adam Smith came along with his observation that people act for their self interest. Mind you he just observed this as a human nature.
I would argue that capitalism, which allow for a person to pursue his own freedom, is why over the past 250 yrs world society has flourished in advancement whereas the world before it, for thousands and thousands of yrs was stagnant. Rose Wilder Lane is a good place to start for those uninformed.
David Doo says
Well it sounds great in theory.
I actually used to ask myself the 1st question when I was working. [What would you do if you won the lottery?] And the answer I always came up with was: Keep working. Maybe in a different job, but in the same career and field.
Fast forward to today. I retired 5 years ago. I do nothing related to my work career [as a software developer for 35 years]. Instead my retirement centers around playing the violin, singing, and playing in string quartet and in a country/bluegrass band. I’ve taken voice lessons for the last 3 years. I envisioned none of that on the day of my retirement, let alone thinking about it in the 20 years before that.
After I retired I did try some exercises to brain storm what I wanted to do in retirement. I couldn’t see any pattern in my answers. [e.g. What 3 things gave you the most satisfaction in your life?] With hindsight, yes maybe there was a pattern, but I couldn’t see it at the time. I stumbled around trying this and trying that for 2 years before music came into focus for me.
I would guess that psychologists are better at this kind of [self-]analysis and maybe that’s why George’s practice took off with psychologists as clients. I’m not sure this works with nerdy engineers as clients.
—a nerdy engineer