by Archie M. Richards, Jr.
November 26, 2007

George D. Kinder, CFP® begins his financial planning process with clients by asking three questions:

1. Imagine you have all the money you need for now and the future. How would you live your life?

2. You just found out you have only 5-to-10 years to live. How would your life change?

3. You just found out you have only 24 hours to live. What regrets do you have? Who did you not get to be?

Financial planning begins with writing down your life goals and deeply-felt personal values. In detail, what do you want money to accomplish for you? What would you like to do in retirement? Travel? Return to school?

In addition to ascertaining goals, the planner gathers data, evaluates the financial status, and develops recommendations. His financial plan presents the long-term goals, the investment strategies to achieve them, and the obstacles to eliminate. With the client's approval, he helps implement the recommendations and monitors the process over time

Make choices between now and later. Look at self-imposed constraints and stretch for the highest outcomes.

While engaged in planning, one wife said she'd always wanted to be a landscape painter.

The planner asked, "What prevents you from starting now?"

She realized that nothing was preventing her. Happily, she began to paint, and one of her works now hangs on the wall of the planner's office.

Let's say you've always intended to retire at 65, but you realize in your late-50s that your nest egg isn't large enough to make this possible. What should you do with your monthly savings: Add them to your investments or pay off your home mortgage early? It depends on what the planning process reveals.

A financial planner helps people confront things they'd rather not talk about, like dying. He might save money on your life insurance and add additional amounts to your investments.

The planner finds out who (or what) is to receive your property after you die. He inventories your assets and liabilities and identifies beneficiaries. A lawyer will be needed to draft documents, such as a living trust, but the planner can help reduce the time spent with the lawyer.

He planner tries to take advantage of easy tax savings. Are you contributing to an IRA for an unemployed spouse? Are you taking maximum advantage of employer matching in a 401(k) plan? Are you using the available perks in your corporate benefit package, such as medical reimbursements accounts and disability insurance?

If you want to retire in your 50s, are you aware that you can avoid the excise tax penalty on early IRA withdrawals by taking out substantially equal annual distributions for the greater of five years or until age 59½?

Financial planning isn't just a one-shot deal. It might also help determine, as time passes, when to buy a new car or a new home or when to make a charitable gift.

Some people keep their money in bank CDs because they're buffeted by so many investment possibilities that they just can't decide. The planner helps them get over the risk phobia.

When crises arise, people tend to do things they shouldn't. The planner helps negotiate the difficulties.

People are prone to buy when stocks are peaking and sell when they're slumping. They buy last year's winners. They put their eggs in one basket and don't moderate volatility by buying a variety of asset classes. The planner helps control the emotions about money and make fewer investment mistakes.

If the investment program spelled out in archierichards.com appeals to you, the planner can help implement it.

The average individual lags market benchmarks by a wide margin. Dalbar, a market research firm, found that from 1984 to 2004, the average investor in stock funds earned only 3.51 percent per year, while the S&P 500 attained 12.98 percent a year. Earning just a few more percentage points a year makes a huge difference thirty years hence.

Visit www.napfa.org to find a fee-only planner in your area. Good financial planning brings peace of mind. Try it.