Financial planning clients don’t often visit their financial planners with the intent of reducing all the ‘stuff’ that they have and do from their everyday lives. Instead, the focus is typically on doing and acquiring more – investment gains, strategies to protect wealth, increasing asset diversification – these are more commonly the focus of financial planning meetings. And yet, by asking clients to reflect on a more novel problem-solving approach of subtraction as a way to create and select the most important goals in their financial plans, they may actually discover how to achieve greater satisfaction from their plans.
For instance, consider what the sense of overcommitment can do to our brains. When there are too many things to do or manage, feelings of overwhelm can inhibit our ability to think clearly and take action, which is probably why we often come out of an overwhelming situation with longer to-do lists than what we started with! But deliberately ‘subtracting’ some busyness from our lives – instead of always trying to be the best and get the most at every moment – might be a better plan. Research by Mihaly Csikszentmihaly on the mental state of ‘flow’, the state of mind involving total immersion in an activity, suggests that it is the absence of distractors that allows flow and that serves as a key element in attaining happiness. Applying the concept of subtraction and flow to financial planning when helping clients choose which goals to prioritize can ultimately help them free up space to more fully enjoy the activities (or freedom from activity) that bring them the most satisfaction.
Advisors can encourage clients to engage in subtraction and to identify their most important priorities to pursue (and to identify those activities they can let go of or delegate to others) by facilitating candid discussions that explore what truly matters most to them. Adapting solution-focused therapy questions that ask clients not just what currently is working for them, but also what isn’t working, can be a helpful way to guide clients through these conversations.
As pandemic quarantines are lifted and the world begins to re-engage in social activities, financial advisors have a unique opportunity to encourage post-COVID ‘re-entry’ planning meetings to revisit financial plans with clients and to assess whether their goals need to be adjusted or re-designed. By guiding them to do so by subtracting complexity and simplifying their lives, advisors can help clients develop good financial planning goals that can accommodate greater joy and satisfaction!
Problem-Solving With Subtraction Can Help Simplify Our Lives And Bring Mental Ease
We live in a world where the norm is to add, often finding ourselves thinking about ways to add more space to accommodate our growing collection of what we own. For example, it’s easy to relate to the statement, “I have so much stuff – let’s move from an apartment to a larger home, so we have enough space for everything!”
This proclivity to create more space for the accumulating stuff we keep adding to our lives (as an alternative to getting rid of stuff) doesn’t apply just to our physical ‘stuff’ – it tends to carry over to other aspects of our lives as well. We want more freedom to be able to engage in more activities or to work more hours to gain more financial success… the list goes on. Adding elements to a situation is often how we approach solving problems, issues, concerns, and even our goals and desires.
This drive to add things to our lives is well researched, particularly by Dr. Leidy Klotz, Associate Professor of Engineering Systems and Environment at the University of Virginia, whose research focuses on behavioral science, design, and sustainable engineering. In his recent book, Subtract: The Untapped Science of Less, Dr. Klotz asserts that subtracting from a situation is less intuitive when it comes to problem-solving, which tends to make implementing solutions that involve removing elements – or simplifying circumstances – harder to practice when compared to adding elements; subtraction is not the human default.
And we find examples of this everywhere. In Klotz’s book, there is a focus on how this tendency to add complexity, instead of subtracting it, is seen in the context of architecture and engineering; in fact, the spark that lit the fire for his subtraction research came from playing Legos with his son. While making a Lego bridge, his son was faced with the problem of fixing an uneven bridge. The obvious solution to Klotz was to add a brick to even the bridge out, but his son instead chose a faster (and more efficient!) method of solving the problem by subtracting a brick from the bridge. Klotz was fascinated by this behavior and posed the same Lego problem to many different individuals. He found that a large majority of people consistently solved the problem by adding a brick.
This tendency to add also applies to writing. Mark Twain is often credited with the quote, “I didn’t have time to write you a short letter, so I wrote you a long one”, which further drives home the point that subtraction is indeed harder than adding. It certainly does take more time and effort to write a thoughtful and succinctly organized letter (or Kitces blog article for that matter – and thank goodness for editors!).
Further, this issue goes beyond Legos, architecture, and writing. For example, US legislators tend to add more rules to the US Tax Code rather than removing or even revising past rules, even when rules become obsolete. And financial planning clients, too, tend to develop goals that focus on acquiring more. Not many financial advisors have clients who ask, “Will you help me find ways to subtract?”
Clients generally don’t think of retirement as a situation where subtraction makes sense. Yes, when we retire, we might subtract ‘work’ from our list of daily activities, but we fill our cups right back up with all the other things we are going to do. I personally have two sets of parents who are both retired (my mother and stepfather, and my father and stepmother), and I can’t tell you how often I hear them say that they are busier now in retirement than when they were working!
Even though using subtraction as a problem-solving approach may not come to us intuitively, it is well worth considering because of its potential to bring us mental ease. Let’s consider what happens to our brain when we don’t subtract – in other words, when we let our lives become overloaded with too much to keep track of. When so much is going on to the point of having too much on our plates, we tend to become less creative and more reactive (and, conversely, less proactive).
Despite the presence of so much going on in our lives, this state of having too much is not necessarily fulfilling or emotionally satisfying. This is true, especially when our lives are filled with activities that we do not enjoy doing. Adding too much to our plate, past the point of saturation, tends to take up so much mental energy that it can create a sense of scarcity for the things in our lives that we do enjoy, and that truly matter to us. And this sense of scarcity – as pertaining to the important stuff! – can exacerbate a sense of not having enough in general, and thus the natural inclination to add more stuff places us in a vicious cycle of trying to solve the problem by adding, in order to relieve the (false) feeling of scarcity.
Moreover, subtracting as a means of simplifying our lives can bring its own joy. Marie Kondo is well-known for the tagline, “sparking joy”, which she frequently uses in her book, “The Life-Changing Magic of Tidying Up”, as well as in the Netflix series, “Tidying Up With Marie Kondo” in which she helps people declutter their homes by letting go of belongings that don’t hold personal meaning for us. Kondo advises, “Keep only those things that speak to the heart, and discard items that no longer spark joy. Thank them for their service – then let them go.”
Interestingly, Leidy Klotz’s research supports why Kondo’s methods actually work. Essentially, subtraction can help us enjoy the activities that we love, and that bring us joy, allowing us to mentally engage with those activities more fully by eliminating the non-essential ‘stuff’ in our lives.
Subtraction doesn’t focus as much on doing less as it does on reducing complexity and engaging more deeply in fewer things. It takes work to organize the house or to think of how to meet financial planning goals using methods based on subtraction instead of addition (e.g., it’s easier to buy a bigger spice rack or dresser instead of throwing out outdated spices that are never used or clothes that are never worn, or moving into a bigger home to accommodate the growing collection of stuff that accumulates over the years).
Financial planning clients with overly complex lives (and assets) are especially good candidates for adopting a subtraction strategy when it comes to creating financial planning goals that bring them joy and satisfaction. Additionally, there are ways that financial advisors can help them do this and, at the same time, strengthen their relationships with clients by helping them get there!
Financial Planning Clients Can Benefit From Subtraction Strategies That Help Them Identify Goals That Really Matter
So why are financial planning clients good candidates for reaping the benefits of subtraction? As Leidy Klotz points out in his book, Subtract: The Untapped Science of Less, if we want to subtract, we (sort of) need to have too much in the first place. In a previous blog article, we looked at research suggesting that many financial planning clients tend to be Maximizers, who are characterized as always striving to have the best and most, as opposed to ‘Satisficers’ who tend to be happier with the status quo.
And financial planning clients who constantly strive for more will likely accumulate more (even when having more isn’t necessarily beneficial or key to reaching important goals); as such, they may be in a good position to benefit from subtraction strategies.
Importantly, financial planning clients can benefit from subtraction, especially when they have a financial advisor who can encourage and support them in the process. As mentioned before, subtraction is not easy, especially because we don’t intuitively think of it as an obvious strategy when it comes to problem-solving. Yet, just as writers benefit from editors, financial planning clients benefit from their advisors who can help them design their financial planning strategies to focus on what is most important to the client so that they don’t get sidetracked by non-essential distractions.
This does not mean that Maximizer clients must completely absolve themselves from the ‘more is better’ mentality – in fact, some Maximizers find great joy in the quest for more. Financial advisors can help these clients find ways to re-organize their ‘more’ in unique ways that ensure their actions are in alignment with their financial plans and life priorities.
For instance, financial advisors are likely familiar with the idea that spending on experiences instead of on tangible ‘stuff’ can sometimes make us happier. Vacations spent together with family can be far more rewarding than buying a pair of fancy black stilettos (although these are also great if you can buy them to wear while on vacation!).
We also enjoy spending money in ways that allow us to avoid dealing with unpleasant (yet perhaps necessary) experiences. In his book, Klotz references a study of millionaires and their financial behaviors. The study compares two groups of millionaires: one group spends money to avoid tasks such as cooking or running errands by paying someone else to take care of these things for them, while the other group does not utilize their wealth to lift time-saving chores. Unsurprisingly, the group that spent money on avoiding activities they considered tedious and unenjoyable was happier.
The study was replicated on middle-income earners as well, and the same result was found. Those who spent money to avoid what they didn’t enjoy doing (household chores, grocery shopping, support with childcare) were happier – which suggests it is not so much about having more money or the purchasing power it represents that drives happiness, it is really about having more time for other things (and not having to spend as much time on things that aren’t enjoyable).
Accordingly, financial advisors can use subtraction as a novel way to help clients identify financial planning goals that address what’s most important to them. Goals don’t need to focus on getting more of something; instead, they can address how to simplify complexity and to let go of unnecessary or undesirable elements that provide the client with the capacity for what brings the most joy and happiness into their life!
Helping Clients Simplify Their Post-COVID Lives Creates Unique Relationship-Building Opportunities For Advisors
Talking to clients about creating value through subtraction may feel strange for financial advisors, especially for those who may not fully agree with the housecleaning philosophy endorsed by Marie Kondo (which can perhaps come across as excessively minimalistic and perhaps uncomfortably metaphysical).
Nonetheless, the fact remains that our current situation is one of dramatic social change as a result of COVID, and during times of great unrest or dramatic change (e.g., death, divorce, the birth of a new baby, becoming empty nesters, retirement), people are often more open to new ideas and other perspectives as they figure out how to adjust to the changes happening around them.
As social distancing requirements have loosened and clients return to work and re-engage in social events, financial advisors might consider the idea of scheduling a post-COVID ‘re-entry’ planning meeting to revisit financial plans with clients and to assess whether their goals need to be adjusted or re-designed. Many people have adapted to their current stay-at-home life and, even though they may want to go back to the office or start attending social events again, they may also be nervous about going back to what ‘normal’ used to look like.
For many during the pandemic, time seemed to slow down a bit. And for some, going back to past lifestyle habits may come at a cost… and for many, this cost translates as time. As such, inviting clients to talk about not only what they want for the future but the important things they have now that they want to keep as they move forward could be a very fruitful discussion that can potentially benefit from new subtraction strategies.
For example, some clients may have to return to the office for a certain number of days of the week. While they may be excited about this (who doesn’t miss listening to Kitces.com podcasts to and from work!), there are others who may have gotten used to enjoying an extra hour in their day or who prefer having lunch at their own kitchen table. For these clients, the time they will lose because of their commute won’t necessarily be a deal-breaker if you can help them find ways to enjoy their evening after a long drive home. Things can be very simple, like scheduling a Tuesday pizza night so that instead of having to rush home to cook for family time around the dinner table, the client can order pizza and get right to family time.
In other words, instead of trying to stuff more tasks and activities into an already short period of time outside work, help clients find a way to ‘subtract’ by simplifying what needs to be done. Ordering pizza or takeout, or maybe even trying a meal service like Blue Apron or Hungryroot, can cut down on the time it takes to buy groceries and prep meals, serving as better time-saving options.
When it comes to clients who want to spend time with their children or even to set aside their own personal time, it’s important to help them resist over-scheduling. Instead, suggest that they identify just a few activities that they love doing with their family and then do only those. Because everyone has had to put off social functions and many recreational activities for so long, the return to a post-pandemic ‘normal’ can make it tempting to overbook too many activities. Encourage clients not to try to do everything lest they overwhelm themselves with too many commitments.
Adding in moderation as a means to rebuilding a simpler lifestyle, especially in the context of comparing pre- and post-COVID circumstances, can be seen as a form of subtracting because the goal is, in essence, to simplify the over-scheduled lives many of us had pre-COVID.
The current post-COVID environment offers a unique opportunity to springboard from the extreme ‘subtraction’ we were forced to do during the height of the COVID pandemic because of social distancing and quarantine requirements, allowing us to consider a more reasonable post-COVID lifestyle by returning to the activities we loved, while moderately scaling back the activities that don’t matter to us as much.
Accordingly, while many clients may want to bring back certain social activities, they do not have to bring all of them back, and advisors can encourage them to re-engage in only the activities that are most important to them.
Another way to generate ideas for reaching goals through subtraction beyond COVID can be through solution-focused therapy questions. These focus on answering two specific questions: 1) What is currently working that would help to reach the desired goal?; and 2) What is not currently working to achieve that goal?
Consider the following dialogue as an example of using solution-focused therapy questions during a post-COVID re-entry planning meeting with a client who is anxious about returning to work:
Advisor: Thanks for coming in today; tell me – what is up, how can I help?
Client: Well, I am taking you up on your post-COVID re-entry plan meeting. I hated COVID and being stuck inside all the time, but I am also nervous about going back to the office every day. I really enjoyed those extra hours at home, just bonding with my family.
Advisor: Okay, tell me more about what you are thinking. I am interested.
Client: Well, over these past 18 months, I have really found a lot of happiness being home with my spouse, and I realize how much I would miss my kids and grandkids if I just go back to pre-COVID ‘normal’.
Advisor: Well, for one, thank you for coming in and talking about all of this. It's awesome that you have something that inspires you so much. I am all for working with you to bring more joy, happiness, and love into your life. As we brainstorm through this a bit, tell me… what would you say is currently working in your life when it comes to spending more time with family?
Client: Well, my kids live close by, so during COVID, we would get together for BBQs where we could ‘distance’ ourselves but still be together while we were outside. And thankfully, for the most part, we have continued this tradition of getting together. I am always happiest when I’m with my family during these times.
Advisor: Great, great. So, if I can paraphrase, something that is working is having routine get-togethers with your family.
Client: Yep, it would be ideal to do more of that, certainly doing less of it is not acceptable. I worry about this a lot.
Advisor: Okay, well then my next question is this: Can you describe for me what isn’t working, as it pertains to getting more family time or even just upholding the current, scheduled family time that you have?
Client: Well, the grandkids are starting to play sports again. And don’t get me wrong, I want them to have fun with that! But my own kids want to meet up with their friends, too, and between the grandkids’ activities and my own kids’ social schedule, I feel that my work hours keep me from being flexible to accommodate the weekly needs of my family and their appointments so that we can all still spend time together.
Advisor: Alright, so correct me if I am wrong, but I am hearing you say that what does not work is that, as things are opening back up, there is now a rush for your family to do a lot of things, family time is being put on the back-burner, and even your own work schedule interferes with time you can spend together. Could we say there is no balance or rhythm to the schedule just yet?
Client: Yes, busy schedules are confounding my time with my family. And I worry that once the rhythm is fully restored, we will just go back to how things were before. Although we all live very close to each other, we seemed to live totally separate lives and never saw much of each other very often.
Advisor: Okay, thank you for sharing that insight. Just to make sure I am understanding, you don’t want to go back to the over-scheduled lives you had before.
Advisor: Well, here is a curveball – have you ever thought about retiring early or switching to part-time work? We can totally explore those options and see what changes would need to be made to your plan to implement those changes. Yet, if I may, might I also suggest that we discuss other ways to subtract or side-step over scheduling?
The dialog above utilizes the type of questions found in solution-focused therapy that explore the things that do and don’t work for the client so that the advisor can help identify activities and actions that should be done more and those that should be done less. The advisor also skillfully used reflective listening and paraphrasing to help themselves and the client describe a more complete picture of the actual situation and what is trying to be achieved.
Further, the ‘subtraction’ of reducing (or retiring from) work wasn’t something that had ever crossed the client’s mind before! While early retirement would not necessarily be a viable solution for everyone who wanted to spend more time with their family, the point is to consider solutions that can sometimes involve thinking outside the box… and to let financial advisors do what they do best – take these potential solutions and see if (and how) these different scenarios would fit into their clients’ financial plans.
In the above scenario, the advisor is aiming to introduce a subtraction-based strategy but hasn’t yet explicitly mentioned that to the client. While it would be fine to finish the conversation without discussing what subtraction actually is, it can be worthwhile to bring up how it can be a beneficial approach to solving problems.
Talking about the science involved in these decision-making processes can be an interesting conversation topic for the client, even offering them an opportunity to briefly pause to reflect on how these strategies can be applied to their own situation at hand. For instance, research by psychology researcher Mihaly Csikszentmihalyi on ‘flow’, which describes the state of mind when someone is fully engaged in and deeply focused on what they are doing – whether it is playing chess, writing, creating financial plans, or playing the violin – suggests that even though an activity can be difficult to learn and intellectually challenging, getting into a flow state while engaging in it can bring great satisfaction. Flow is an excellent example of subtraction; by concentrating on just one activity and subtracting everything else from that moment, people can truly engage in activities they love to do and enjoy the experience of immersing themselves in that activity.
Continuing the conversation from above, the advisor decides to talk more specifically about subtraction with the client:
Client: Yes, maybe I need to think more deeply about how to restructure my schedule so that I can get more family time in. I see now that I don’t necessarily have to ask my family to add more activities into the week; I might be able to remove things.
Advisor: Adding things to solve problems tends to be our natural default. Most of the time, when we solve issues, we look for new opportunities that we can add to what we already have, but subtraction is also possible and often creates simpler solutions. And it has many benefits, too, even if it might be a bit tougher to think of solutions that involve taking things out instead of adding things in.
Client: Yes, I know what you mean. I’m an architectural engineer, and while I don’t ever mean to work late, I can lose myself drawing plans. I have loved it for many years. I don’t really want to fully quit my job, but getting so engaged in my job… I also see that as keeping me from another love, my family.
Advisor: Really, thank you for sharing that. This is incredible insight. And this brings up another fun fact about how subtraction can be a great problem-solving strategy. Research has suggested that delegating some activities that we don’t enjoy, like housecleaning and running errands for groceries, can actually make us happier because it gives us more time to spend on the things we do enjoy. I bring this up because, knowing that you love your job and your family – well, could we brainstorm together about how to find more free time so that you can spend more time with your family?
For example, maybe we can find a cleaning service to help you clean your house. If you didn’t have to do that, how would you spend the time that was freed up? I know that may be a small thing, and maybe you like cleaning, but we can find things that you don’t like and maybe find ways to delegate those things. What are some more ideas for places we could subtract from your schedule so that you have more time, energy, or concentration to do things you love?
In the above example, the advisor has done a couple of things. First, they discussed the concept of subtraction with the client and shared how it can contribute to ‘flow’ – the joyful and often peaceful state of mind that we experience when we can focus on work we love and have space and time to fully immerse ourselves in that work. A state of flow can be attained when there are no distractions, which can be attained by subtracting them.
The advisor also has normalized hiring help. Which can be relevant because, for some people, hiring someone else to clean your home, run your errands, or help with the kids may not feel quite right to someone who feels they should be the person responsible for taking care of these tasks. There may also be guilt or discomfort with the idea of hiring outside help, perhaps because the client may feel they are adopting prodigal spending habits or being too ‘fancy’.
But if the advisor frames the discussion around subtraction as a normal, useful problem-solving strategy and notes the research that backs it, it can give the client a sense of having ‘permission’ to consider these things without guilt.
The client can also be encouraged to discuss what they don’t like to do and what they may want to eliminate or delegate without the fear of being judged. Ultimately, the advisor can help the client figure out how to subtract things to simplify their lives in such a way that allows for greater joy and satisfaction, and at the same time, that develops financial planning goals in line with supporting their happiness!
Talking about subtraction and reducing complexity in a financial planning meeting is not only novel (we are usually more focused on protection and growth) but also offers an alternative solution with powerful benefits that we simply cannot achieve in the same way if we were to only consider adding as a way to solve problems.
Financial planners and their clients are in a unique position to take advantage of these approaches because clients tend to have not only a base from which subtracting can be beneficial but also the potential means to accommodate subtraction strategies in the first place (e.g., hiring help, reducing work hours, etc.).
After all, aren’t clients, at some level, subtracting by engaging the financial advisor to eliminate the responsibility and stress involved in managing their finances and developing a financial plan for themselves on their own?