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Helping Americans Protect, Save and Grow Wealth
Wealth Wisdom In The Context Of Life
Welcome to USA Financial Planning Partners, Inc., home of LifeFocused Financial Coaching. Conventional financial planning is a thirty-five year old school of discipline designed to help Americans achieve financial success. This sounds like a nice thing, after all who doesn’t want ‘financial success’? Imagine if there was something better. . .
LifeFocused Financial Coaching is the first step in making progress towards financial success in life. The LifeFocused process opens the path to more money, security and control; less risk, taxes and cost, leading to a true enjoyment of your finances, focused on a significantly meaningful life. LifeFocused Financial Coaching seeks to bring you closer to the following objectives:
- Build and protect the maximum amount of wealth optimally possible with considerably less risk
- Spend and enjoy your wealth in the context of your unique life without fear of ever running out
- Pass all your wealth on to whomever you want, leaving a meaningful legacy inspired by the unique purpose of your life
- Enjoy successful health, finances, relationships and your own personal, distinctive pursuit of happiness
conventional financial planning is a six step process.
- Establishing and defining the client-planner relationship
- Gathering client data, including goals.
- Analyzing and evaluating your financial status.
- Developing and presenting financial planning recommendations and/or alternatives.
- Implementing the financial planning recommendations.
- Monitoring the financial planning recommendations.
Most of these six steps are perfectly fine; however the crucial step, (4) developing the plan is the Achilles heal of this well-intentioned process. There is a major problem with conventional financial planning – it doesn’t work. Why? Because conventional financial planning is based on concepts of physical science, primarily mathematics. In the simplest terms conventional financial planning, especially the development of the plan can be reduced to a simple algebraic formula:
Where W is wealth, M is money, R is rate of return and T is time. The client is asked what they will need and to make certain assumptions as to how much money you can invest, how long before you will need the money and how much risk tolerance you have. The planner then inputs those numerical assumptions into the above formula and solves for the unknown variable. Voila! Your financial plan is developed.
Actually the process is a little more complicated because it incorporates aspects of the plan that are not entirely financial, such as law, taxes, rules and regulations. However, this formula is the primary chassis. For example : A woman 55 years of age who wishes to retire at age 70 and has invested $200,000 plans to add $20,000 per year to her plan. After answering a risk-tolerance questionnaire, she and her advisor determine that she is a 3 on a 5 point risk-tolerance scale, moderate risk. Having an understanding of the mathematical average of the US stock market the advisor determines that he can come up with an asset allocation that will likely return an average of 7%. The formula looks something like this:
Thus she discovers, with the help of her capable planner, that she will retire at 70 with over a million dollars. Then we assume that her risk-tolerance will drop at age 70 and we can expect a 5% ROR. A healthy 55 year old female has a life expectancy of 28 years. Which means she can draw an income of around $60,000 annually made up of mostly interest and some principal.
If she decides that is not enough, she’ll have to take more risk to increase her assumed ROR or deposit more money, reducing her current income or settle for less. Essentially she has to make life choices at 55 for herself at 70 and beyond based on arithmetic.
So what’s wrong with that? Nothing, if we lived in a world with perfect knowledge, but we don’t. We live in a world of uncertainty and change. If we are to truly succeed we need to account for financial endeavors in the real world. We all have to make choices, based on our own unique value scale, given scarce resources. This area of knowledge is economics and it is a social science. We determined to develop a process that would help people attain the elusive objective of financial success and utilize this process in the real world.
LifeFocused Financial Coaching is a practical process as opposed to the theoretical processes of conventional financial planning. Don’t try to look up LifeFocused in the dictionary, it isn’t in there. We created the word to encompass our unique process. It is a compound word made up of the words – life and focus – meaning the concentration of energy and attention on the experience of being alive with deliberate intent and clarity. The financial coaching refers to a heavy concentration on the role wealth plays in your life.
A LifeFocused Financial Coach is your partner, your advocate and your financial expert. Our job is to provide you with the knowledge, tools and personal assistance in developing your own unique financial journey, focused on a significantly meaningful life. We share our wisdom with you so you can enjoy your finances to the fullest extent on your own personal pursuit of your unique happiness.
Please keep your eye on these pages as this site is still in development.
for more information, please email us at info@usafpp.com
