Financial Planning

How Three Simple Questions Led to the Best Investment I Ever Made

A large pool, palm trees and the sea

Life is busy, and we all have things we want to do and targets we need to meet in the short and long term. Financially speaking, this means things like reducing mortgage debt, savings, school fees, retirement and leaving a legacy. But setting aside these common financial objectives, how often do we sit down and really focus on what we want to do in our life? Or perhaps, more importantly, when we come to reflect on our lives, what don’t we want to regret not ever doing?

You could say that part of a financial planner’s job is to help turn the ‘I’m so sorry I didn’t…’ into the ‘…thank goodness I did.’ Or about transforming regret at a missed opportunity into pride and the satisfaction in a wish fulfilled. The difference between these things can be huge and leave a lasting impact on your life, as I know from personal experience.

One method I use to encourage my clients to see the world in this way is by working through three questions set by the celebrated financial adviser and thinker, George Kinder. The questions are designed to move people away from an isolated focus on savings, investments and pensions to get a deeper understanding of what matters to them and to help focus on achieving a life of fulfilment without regret. The questions are:

Question 1 – Imagine that you have enough money to take care of your needs, now and in the future. How would you live your life? Would you change anything?

Question 2 – Imagine that your doctor says you have only five to ten years to live. You won’t feel sick, but you’ll never know when death will come. What will you do? Will you change your life? How?

Question 3 – Now imagine that your doctor says you have only one day left to live. Ask yourself: What did I miss? What did I not get to be or do?

Questioning Myself

I had been taking clients through these questions for a number of years when, seven years ago, I decided it was time for me to put my money where my mouth was and answer them myself. One Saturday morning, my wife, Juliet, and I worked our way through them. I have always been a careful planner – for me this was the only sensible way to meet my financial commitments, now and in the future. This was the first time we’d ever done something like this together. It wasn’t long before we discovered that we were just ‘living to work’ in order to financially support ourselves and our families, to pay our girls’ school fees, and aiming for a comfortable and early retirement. What answering Kinder’s three questions reminded us is that there is more to life than just planning and striving for these financial staging posts.

When Juliet and I compared our answers, we agreed that we wanted to do more with our money, give more to charity and to family members, travel more with our daughters (they grow up so quickly) and our parents thus enriching the lives of all three generations and creating long-lasting memories. We then understood that if you’re not intentional about making these things happen you tend to just fall back on the planning around capital items like a pension pot or achieving a certain level of savings. We didn’t want to just plough on with our lives, heads-down, only to get to retirement to realise we could have enjoyed it more along the way.

Putting it into Practice

That was the emotional side of the process; the practical side came next. Now we’d identified our life goals, how could we fund them while remaining on course to meet our existing financial commitments and plans for retirement? For example, we decided to travel much more with our daughters and bring both sets of parents along too, which meant that our annual holiday budget was going to increase. With only so much cash in the pot, we needed to weigh up our new goals against our current financial plan. It’s a trade-off and about finding a compromise that allows you to achieve both.

Luckily, we go through this process with Progeny clients, hence we calculated this by using our lifetime cashflow plan. This helped us to re-engineer our plans and work out what could change to accommodate our new lifestyle. In our case, it showed that I needed to earn more money and delay retirement by a few years – a compromise that was more than worth it in my eyes. I was fortunate enough to be a business owner, so I altered the business plan to accommodate my new earnings target and changed my pension contributions, putting my retirement back a few years.

From then on, all three generations went on amazing holidays together every year. We showed our daughters the pleasure of travel as they were growing up and treated our parents. My father passed away last year and I am now so grateful that the last seven years have been filled with the most amazing times spent together, creating memories that none of us will ever forget. Kinder’s questions had helped us avoid the pain and regret of missed opportunity and enjoy a life of fulfilment.

When we think of financial planning and investing, we tend to think of monetary sums and growing our wealth, but I believe that wealth can be a state of mind regardless of how much money you have. Taking the time to identify what was truly important to me and my family and changing our plans to achieve it is one of the greatest investments I have ever made.

If you would like some help in focusing on your life priorities and adapting your financial plans to achieve them, please get in touch, we’d be delighted to help.

This article does not constitute financial advice. Individuals must not rely on this information to make a financial or investment decision. Before making any decision, we recommend you consult your financial planner to take into account your particular investment objectives, financial situation and individual needs.

Photo of Andrew Pereira

Author Andrew Pereira

Director, Progeny Wealth

Andrew has been working with families, high-net-worth clients and business owners for well over 20 years.

Learn more about Andrew Pereira

Join the discussion 3 Comments

  • Kate Williams says:

    You bring to mind a book which caught my eye when I was in Waterstones the other day. It was by the Roman writer Seneca and called “On the shortness of life”.

    He says that time (not money) is our greatest asset and needs to be invested wisely. Here is a quote: “Most human beings complain about the meanness of nature because we are born for a brief span of life, and because this spell of time that has been given to us rushes by so swiftly and rapidly that with very few exceptions life ceases just when we are getting ready for it.” A bit later he says, “You will hear many people saying “When I am fifty I shall retire into leisure; when I am sixty I shall give up public duties” … How late it is to begin really to live just when life must end! How stupid to forget our mortality, and put off sensible plans to our fiftieth and sixtieth years aiming to begin life from a point at which few arrived!” And later, “It is generally agreed that no activity can be successfully pursued by an individual who is preoccupied, since the mind when distracted absorbs nothing deeply, but rejects everything which is, so to speak, crammed into it. Living is the least important activity of the preoccupied man… But learning how to live takes a whole life and, which may surprise you more, it takes a whole life to learn how to die!”

    Maybe Progeny should have a copy of this book on the coffee table in its reception for all its customers!

    • Alex Shaw Alex Shaw says:

      Very wise sentiments Kate! Time really is such a precious commodity that is taken for granted far too easily, by far too many. Thank you for the comment.

    • Andrew Pereira Andrew Pereira says:

      What a fantastic comment – thank you Kate.

      We have ordered the book. I look forward to reading it!

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