From the February 2005 issue of Investment Advisor • Subscribe!

The Next Stage for Life Planning

A chat with George Kinder

It's December and there's snow on the ground outside George Kinder's office, a couple of blocks from Harvard Square in Cambridge, Massachusetts. So you can't help but smile at the dreamy expression that comes to Kinder's face when he starts talking about his other home base, Maui, where he is about to head for now that the Bay State's climate is growing harsh. But whether he is working out of Hawaii or Massachusetts, Kinder follows a routine that includes a special time. Sometime between noon and 2, Kinder strolls out to a secluded spot--a cabin near his Massachusetts house and a beach close to his home in Maui--and whips out a small white notebook and starts to write. "Sometimes it's poetry or a play," he says, "Sometimes it's a work of fiction. Sometimes I take a digital recorder and compose music, or take pictures with my digital camera."

In following this routine, Kinder is doing exactly what he has counseled his many clients, readers, and students to do over the years: "Live a creative and spiritual life." However, this means anything but the life of a hermit. Kinder, in his softspoken way, has given himself permission to live the busy life of an entrepreneur at the same time he nourishes his soul. In so doing, Kinder is the embodiment of the life planning movement that he, along with planner Richard Wagner, founded in the early 1990s. As he wrote in his 1999 book, The Seven Stages of Money Maturity, Kinder has fashioned a life "based on a deepened understanding of your power and purpose."

But since Kinder thrust life planning into the public consciousness with the formation of the Nazrudin Project and then the publication of Seven Stages, the movement has matured. Advisors wishing to follow Kinder's precepts are no longer struggling alone in the wilderness. They can now avail themselves of a widening array of courses, workbooks, and Web-based training programs. The Certified Financial Planner Board of Standards even granted $5,000 to a group of life planning adherents recently, including Susan Galvan, CEO of the Kinder Institute of Life Planning, to identify specific communication skills that foster trust and commitment between planner and client. In a further sign that life planning is entering the mainstream, the yearlong study will be conducted with the collaboration of the Financial Planning Association.

In a two-hour interview, Kinder explained how his concept of life planning has evolved over the years, and gave some hints of what he has up his sleeve--as well as in the pages of his ever-present white notebook. Here are some excerpts:

Where is life planning today? We're now in an environment where life planning has pretty much been defined. We think of it as an art and a science. It's terribly important that the public understand what it is and who's available to practice it.

How well is the discipline catching on? I love Thoreau's quote that people "lead lives of quiet desperation." What I am surprised by is that everybody keeps revealing that their lives are incomplete.

So why isn't life planning ubiquitous? In the life planning process, all these obstacles to actually executing that life plan come up. We short-circuit the process in the planning stage. So many of them [clients] have excuses. My wife didn't like it. My parents won't let me do it. I can't afford to live the life plan and pay the mortgage. We're the only professionals who can help them cut through it. In Dante, in the First Canto [of the Inferno], he sees up to the top of the mountain, through the forest of materialism. He starts to climb the mountain, but three beasts chase him down. Then Virgil comes out of the woods and says, "You can't get there that way." He takes him through hell and purgatory, through the anxious place.

Life planning takes clients through the anxious place and through the purgatory of structuring their lives. We are playing the role that a therapist or spiritual advisor may play, but we can make [clients'] dreams happen.

You have been giving two-day life planning workshops for years. What else are you doing to get more planners to understand this process? We are trained academically in five or six disciplines, but we've never been trained in dealing with the client. You need to know how to keep the torch lit, provide the inspiration when they are afraid they can't make it happen. You need to know how to ask questions that don't stop the client's dreams and block the client's flow. Why hasn't this happened before in the CFP community? You can't do it unless you've been through it yourself. What we are doing [at the Kinder Institute] is a five-day training program in life planning and then a four-month mentorship. This is virtual teaching, which we will limit to 12 people at a time. We have five people doing the training right now. Planners come in and have to choose someone they don't know to be their life planner for the five days. You learn from the inside out. You also conduct a series of meetings in front of the other students and teachers. You are critiqued and reviewed by everyone, but primarily by the teachers. I don't think anyone has left our five-day meetings without having their lives transformed. Life planning involves challenging ourselves to live what we are most passionate about.

What does this program cost? Typically, $5,000 for the five-day intensive and four-month mentorship. People are clearly making a big commitment to their practices to do this.

On the Kinder Institute's Web site (kinderinstitute.com) you use "EVOKE" to describe what this extended program is imparting to your students. E stands for exploration. V is visioning--what does the dream look like? In the middle of the process, what if the client gets anxious? All we do is empathize and listen, while a therapist will do a lot more. We keep coming back to the inspiring dream, rather than go back into the past. We hold the torch. O is the most important: it stands for obstacles. When many people attempt to do life planning, they get what the vision is, but then the client backs off--he has to pay the mortgage or get kids through college. We find which obstacles are most profound and deal with what is left. We ask, "What do you see as obstacles to your dream?" What [clients] thought would take two years [to accomplish] may take 10 to 15, and they're getting discouraged. They're thinking 10 or 15. I'm thinking zero to two, [but] I'll propose four. Then the budget becomes much more important--it's perhaps the most important part of financial life planning. We use all the tricks in our bag to help them get there as fast as possible. The K is knowledge--the plan itself--and E is execution. The one distinguishing difference with a traditional financial plan is that a financial life plan has two aspects. There is the traditional--a will, investments, funding the 401(k). But there is also spending more time with the kids, writing a novel, figuring out how to live with greater integrity on the job. Whenever a client comes in for a quarterly annual meeting, the focus is on the torch. Sometimes the torch actually changes, but we're on top of that. This shift is a danger to traditional financial planners. They don't go deeply enough to know what will occur. Traditional financial planning is like a doctor trying to cure the disease without listening to the symptoms.

Do you have any other projects in the works? We're registering life planners on our Web site. By spring, we'll have 50. That means they have done the 2-day program, the 5-day program, and the 4-month mentorship. We'll also offer continuing education units so people can continue to be life planners. In 2004, I gave a two-day workshop to the Garrett Planning Network. One of our missions for 2005 is to reach out to the public media--Oprah, Business Week, The Boston Globe--to let them know that life planning exists. The other broad movements [in the industry]--the first was the CFP movement in the mid-1970s. Then the fee-only movement, with NAPFA as the model. Now it's life planning. Each movement evolved from a crisis in investment products. It is important to link all three.

You've done some training for wirehouses, too? I gave a workshop for SmithBarney's elite advisor group. They're almost all fee-based people. But this is a delicate area. I do believe strongly in the fee-only movement, but it's very difficult to do life planning on a commission basis. I do know some planners who do that with grace and integrity, but it's difficult. The client has to get through your image as a salesperson. When we take our work to the giant corporations that want to do life planning, we're working with fee-based or fee-only people. What we are finding is that life planning is something that is likely to lead their organizations more toward a fee-only approach.

You were one of the founders of the Nazrudins. I don't think that Dick Wagner and I realized how huge this was going to be when we started the Nazrudin project 10 years ago. In the early days, I was sitting at their knees. The first five years were extraordinary. It was the think tank of life planning. We all felt more like pastoral counselors than financial advisors. A group of us would hang out and solve problems. It was like the '60s--helping out with a community that was passionate about their clients. Now we have the Kinder Institute, and [early life planning advocates like] Elissa Buie, Guy Cumbie, Elizabeth Jetton, Dick Wagner, Ed Jacobsen, Troy Jones--they're now all major FPA figures, in the leadership, or emerging into the leadership of the FPA.

George, you talk about America being in a spiritual crisis. We are earning three times as much income as our grandparents, and all the studies show that we are not happier. Is that a spiritual crisis or what? Is that an economic crisis? We have had 50 years of stagnation and you call this the best economy in the world? We are not producing any more happiness. That's an economic crisis. If we were living more proactive lives, doing what makes our hearts sing, you'd see the economic benefits occurring throughout the world. This means working with the smallest economic units: the person and the family. There are four major things that people dedicate their lives to in life planning: family, spirit, creativity, and community. What we are talking about is healing relationships within the family and unleashing creativity. The family unit can then be more valuable to the community.

How about your own practice? I sold my practice five years ago to Abacus Wealth Partners. I feel that I was liberated when I sold my asset management service. I am still affiliated with Abacus. I work on an hourly basis, and I refer people to them. I get to see my old clients and take on new clients from time to time, but my focus is on how people are going to live a life plan. Asset management is much more of a commodity business than we've acknowledged. I am a big believer in indexing. The life planning part is the real value. Life planning is the heart and soul of the business.

Most advisors today get their assets from clients who are retiring. It's terribly important that life planning be delivered as early as possible. People in their 20s should be made aware that life planning exists. So should middle-income and lower-income audiences. We've given the two-day training at inner-city churches. This is terribly important. It's ridiculous that people don't know about financial planning. The basics of economic literacy ought to be taught in high school, and life planning needs to be introduced in college, or when people are in their early 20s.

If you were writing Seven Stages today, would you change anything? If I were to redo it, I'd be much more clear and direct in attempting to inspire the reader to create his own life plan and to find an advisor who is comprehensively trained as a life planner.

Any sequel to Seven Stages? There's another book, perhaps. I'm not quite ready to address that. Since I've been a kid, I've always wanted to do illustrated books. I've been influenced by William Blake. I've wanted to combine writing and illustration on a single page. I hope to have something in a few years.

Editorial Director William Glasgall can be reached at bglasgall@ia-mag.com.

Reprints Discuss this story
This is where the comments go.