Financial and life planning go hand in hand


A fundamental shift in financial planning in recent years has been a greater emphasis on life planning.  A video on the Bloomsbury Wealth YouTube Channel.

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Transcript: Robin Powell & Meir Statman/ Professor of Finance, Santa Clara University.

RP: A fundamental shift in financial planning in recent years has been a greater emphasis on life planning. Yes, of course, money is very important, but what really matters is how money helps you to lead the life you really want.  Someone who warmly welcomes this development is the distinguished Professor of Finance, Meir Statman.

MS: Well, you know, I often say that the biggest risks in life are not in the stock market. I say if you want real risk, get married. And if you want more, have children.  The point is obvious. And yet when we speak about finances and financial well-being, somehow that point gets lost.  And so it was very important for me to get that point across that, yes, financial well-being, of course, is important, but the ultimate goal is life, well-being and life well-being has many domains. Family, of course, and work and health and religion and. And more.

RP: In his most recent book ’A Wealth of Well-Being’, Meir Statman explores this intersection between money and what he calls life wellbeing.  He urges all of us to identify our personal values before making financial plans.

MS: I see this book as a continuation of my development of behavioural finance. And so we started with standard finance, really fifties, where people are rational, computer like rational.  And then at the beginning of the eighties and I was part of it, we got into behavioural finance and we often described people as irrational.  Later on, I said, wait a minute, There are things that people care about beyond wealth, like values.  Let’s talk about normal people.  People we know, people like us. What we really want is the good life. What we really want is life, well-being.

RP: Of course, financial planners are neither counsellors nor life coaches. But when choosing a planner to work with, you need to ensure that they’re not focussed purely on money.

MS: Financial well-being really underlies life. Well-Being. That is, you need financial well-being, the basics of earnings to be able to support yourself and your family.  You need that to pay for the services of physicians and hospitals. Even even in religion.  You need that, you know, because because they’ll expect the contribution. And you don’t want to be the only one who does not have it.  So, you have to have financial well-being, underlying life well-being. But financial well-being is not enough. We all know personally or by reading about people who are fabulously wealthy and yet manage to be miserable.

RP: Finally, bear in mind that clarifying your values is an ongoing process.  Your priorities may evolve over time. But by regularly reflecting on what matters most to you, with the help of a financial planner, you can develop a stronger sense of your authentic self and a more intentional approach to life.

Disclaimer — The information in this video does not constitute advice or a recommendation, and you should not make any investment decisions on the basis of it. If you do however require advice please do not hesitate to contact Bloomsbury Wealth.