Episode Transcript
Daniel: Hey guys, hope you're having a great day. I am excited to talk with you today. It's just me today, but I'm talking about a topic I really enjoy and that is Financial Planning.
But I'm gonna be talking about what I would consider is the most common missing piece in the equation for people's financial plans, in particular physicians' financial plans.
So I want to talk through what that is and how you can better incorporate it in your life. And hopefully the conversation today will help you to improve more of the practical aspect of your financial planning. This is as I said, a fun topic for me. I enjoy this, but I recognize many of you, it's probably not something you necessarily enjoy.
I promise you, the more you experience it and talk about it and learn about it, it will be a much more enjoyable topic. Part of the discomfort there is not having much experience with it. And so what we're gonna talk about today is probably not something that the average person has spent much time focusing on.
And so it might be a little uneasy at first, but hopefully we can work through that.
We're gonna be talking about the most common missing piece in physicians' financial plans. And, I'm curious what you're thinking about as I say that. And I'm guessing that for many of you, you're thinking about numbers. Like spending too much or not doing tax shelters or whatever number thing.
I think that's probably what people think of when we bring up financial planning is related to the numbers. That's not actually it. Really, there's this misconception there is that money in itself is gonna solve problems or make life better. And I think all of us have felt that in some capacity or at some point in our life, this whole idea that I'm gonna earn more money and life's gonna get better. Or even the stuff that it buys is gonna help life get better.
I was interviewing Dr. Hala Sabry, in the New Year's Resolution podcast a while back on how to set New Year's resolutions that stick, and she had a great quote about her experience with money. And she was talking from the view of in training, as a physician. So here's the quote so, "I thought making more money in practice would change my life for the better, but in reality it only made me more of the person I already was. And if I was honest, I didn't want to continue being that person."
So I think this experience with money is such a great example of what people commonly think and feel as they start to experience money. It's this false idea that it's gonna solve problems, but in reality it's not. So that's the misconception, is that money's gonna solve problems. I can make life better by simply doing the money itself is gonna make life better.
And so back to the financial planning, really the goal of having a financial plan, or really money in general is to make life better. And so if money is in itself, not actually making life better, the natural question is, " What actually makes life better?" So that's what we're gonna talk about and that's, we're gonna get into the missing piece here.
So, ideally you're using money as a tool to live out your values. So you're using money as a tool to live out your best life, be the best version of yourself, do what's most important, you know, check off your bucket list, those sorts of things. So I said earlier, money in itself doesn't make you happy, but when you can start to use money as a tool to live your best life, that's really what's gonna move the needle on this.
And unfortunately, I think that the big missing piece is that oftentimes we fail to pay attention to our values. So that's what I'm talking about here, is using money as a tool to live out your values, your personal values. And so it's really easy. I've done this before myself. I've seen it in a million other people.
It's really easy to not have your values top of mind, not pay attention to them, not give them a seat at the table when you're making decisions, little and big decisions in life. And so I think the question I would pose for you is, "Do you know what your values are? Are you really clear?
Can you state 'em right now, like off the cuff? Are they top of mind? Are you using them in your decision making process?" So I think what happens is most of us, depending on the phase and if you've worked through this exercise recently, if some of you have done work through this exercise recently or you're just very aware of your values maybe you're gonna know them, you know, pretty quickly.
But unfortunately a lot of us kind of get so busy and we lose touch of these things. And so what happens when you're not aware of your values is you end up being influenced by all the other values around you. So like the world's values we'll say. Or your friend, your peer group values, or just the cultural values or however you want to say it.
So look at the cultural values around you, what would you say those are? It's easier, that's another thing. It's easier to identify sometimes you know, how we're doing on these things from the view of looking at other people. And so if you think about the world just in general, like what are those values that the world lives by?
And are you living by those yourself or how are they influencing you? Odds are if you're not really holding strongly to your own personal values, you're being heavily influenced by the worldly values around you. And a lot of times that's a problem because it's in conflict with what your true values are.
One of my favorite quotes, if you've been listening to the podcast for a while, you'll have heard me reference this probably several times, but "Show me your checkbook and your calendar and I'll tell you what's most important to you." I'm not sure who came up with that quote originally, but it's a great quote on really calling attention to the fact that if we really want to look at you know, where the rubber meets the road on our values is on your time that you're spending and where you're dedicating your resources, your money.
And so a lot of us say that so if I were sassy, like what are your values? You know, maybe you're gonna say like, family's important. That's a common like first reaction. And so maybe you have some values in mind that are important. But then the question becomes like, how are your actions aligning with those values? And so what happens is if we have these values that are, we know deep down are important, and then we have these actions that we're our day-to-day decisions and the actions that we're taking are in complete conflict with those, that's where you start to get friction or cognitive dissonance is what they call that.
There's stress and friction and you kind of feel like you're not living your true self when those pull further apart. And usually what's happening is you're pulling towards the worldly values instead of those values you know deep down are most important to you.
So that is the far and away biggest missing piece I see in physician's financial plans. The numbers are important. I'm not trying to say the numbers are not important, but you have to do both look at your values and what's most important to you and look at the numbers from the lens of those values.
So we're gonna go through an exercise today on this show, which I think will really help. It's helped me, it's helped people I've worked with. I think it will really help you to clarify your values and help get them more top of mind. And so we're gonna just talk through this. I'll have an attachment to the PDF of the exercise in the show notes in case you wanna write it on paper.
I have mine written on paper. I just like to, for these kinds of exercises, I'm usually like an electronic type guy, like I put it all in on the electronic version of stuff. But for this kind of thing, I like to hand write. So, we'll have that linked.
Okay, so the first step, if you're looking at the document, you'll see this, but the first step is to really just brainstorm like what is actually truly most important to you?
Like, what are of all the possible values you could identify with, what are your top values. So the document, when you look at it, you'll see a big huge list of like possible values. And then there's some blank spaces for things you might fill out if something you identify with is not on the list. So as I was going through this, a couple of the ones I actually identified were not on the list. So I wrote those in.
But what I want you to do is skim through this and maybe put like a check mark next to the ones that potentially would be important to you. And so go through the list, identify what possible values might be for you, and then as you're thinking through this, so for me, this is like a 20 to 30 minute exercise.
Like I'm just sitting and thinking about it. So as you're thinking through it, think about past experiences that were really fantastic. Like, awesome. Like great times in your life where you're like, "Man, this is.. I'm living life." So think about past experiences or even like future ideal things you could see happening that would be, you know, great experiences or things that have happened or situations you've been in. So think through like past times or future possible times that really struck you as like awesome times.
And sometimes those can be clues into like what possible values are for you. So go through the list, identify or checkbox 10 or 15 when I was doing this. Most recently I had like 15 or so that I checkmarked. And then what you're gonna do, so after you've done that I want you to underline like your top, say 3 - 5. So underline your top 3 - 5 values that you would say are like most important. And these are gonna be what we're gonna document on the next page.
So for me as I was going through this, relationships was number one, I called it Selfless Development. I've made up my own value. Selflessness is on here, but I like selfless development better.
That was my second one, and then Exploration was my third one. And so you can write those ideally you're writing 'em in priority order. And for me these are priority order. So relationships is number one. Selfless development is number two, exploration is number three. So I ideally you're writing them on the next page in priority order for you.
And so what you're gonna do is for each of those top three values, you're gonna write down a couple of statements and behaviors that identify and help explain that, how that value, you know, how you see that playing out in your life.
So, I'll share with for my example I'll share like the first one that I went through just to kind of give you guys an example to work off of.
So relationships, like I said was my number one, and I would equate that to like loving others. So for me, my outcome statement is to love God, family and others above myself. Like that's the ideal. So behaviors for me the top one is accepting love of Christ first, and that allows me to have that ability to love others.
So that's kind of this whole, a lot of this is priority orders. So for me it's like loving God, accepting that love of Christ will allow me to give the love out to others. And by having daily prayer, reading the Bible relationship with Christ, those are the things, the actions, the behaviors that would tie into that.
So that's the number one behavior for me along the lines of relationships because I believe that by honing in the relationship with God first, it will allow me to do relationships in the rest of my life better. The second one is improving marriage always like never like coasting. So learning to give compromise, love, have date nights.
So date nights is a really concrete example of that. But you know, it's more than. So that's the second one is marriage and like I said from ideally these are in priority order. The third one is leading and loving my boys. And so providing a good example for them. And this all ties into the, you know, others.
So like ideally the first and the second ones I just mentioned are in themselves. Very good examples. But there's a lot more than that. So a concrete example for me is having like a special dedicated time that we have regularly where we can build that relationship. The fourth one is being a great friend, having deep conversations with other people.
And the fifth one would be like loving strangers even, and ideally my enemies. So these are examples of behaviors. There's a bunch, like you could go on and on forever. But, the idea here is to just have some prompts to remind you of what that value is and why it's a value, and how, you know it might play out in your life.
So that as you go through life, you can reference it and be reminded and help with decision making and direction and that sort of thing. So, I'm not gonna go through the rest of these. Basically Selfless Development for me was like developing myself from this view. Not so much of pride, but more humility like I'll give you one example of it is like working out has always been important to me.
Like health is very important to me, but in the past, early in my life, I have been healthy or, you know, worked out or whatever more from a selfish standpoint of like, I wanna look good and I need to look good. Which everybody wants to look good, but today it's more of like, how do I live a long life so that I can take care of my family and have relationships?
It kind of ties into that first value. So, there's a bunch within that, but like, selfless development is a big deal for me. The third one is where I kind of get into more concrete stuff related to my work and personal. And all these things like values tie into personal work, everything.
So exploration is like, I love like l learning new things, going into new places, exploring. That's partly why I enjoy business. It's just fun for me. so that's definitely a top one.
So once you have these written down and have a good outline of what that actually might look like in your life. That's a huge step.
But, you really are not changing anything until you start living by them or taking action on them. So knowing your values is the first step is hugely important. But we have to then start putting them to practice and that it gets challenging, but like a huge first step, like I said, is getting them documented.
You're gonna start to gain more awareness just from having them on paper. So the last part of this, I'm gonna talk through like putting them into practice, like how to live more in alignment with them. And then I'm gonna circle back to like some examples of like your finances and ultimately where we started with this is your financial plan is like, how are you viewing your financial decisions, you're using your money, your finances as a tool to live out your ideal life, which to me is like the definition of good financial planning.
So, next steps on putting them into actual practice. So some examples, I'm gonna just throw out some examples to think about. Going back to the financial plan, a lot of times when we talk with people about financial planning as I'm a Financial Planner by day, but when I'm talking with someone about their financial planning, oftentimes they're gonna bring up goals.
As you know, starting points in the conversation. Like, I wanna retire by ex age, or I need to pay off debt or it's important to get an emergency fund or whatever. So those are good examples of goals. And then we're also gonna talk about like decision making and some of these big decisions that they have coming oftentimes are important to them to talk about as well.
Like, I'm transitioning into practice, I need to buy a house or like my kids are going to college. There's all these life changes that are happening. And so in these discussions, one-on-one, we will try to peel back the layers on the underlying reason behind these. But really what I'm saying for you listening is ideally your values, these values we just went through, they're the guide helping you.
They're like the reference piece of directing you in these goals that you're setting and these decisions you're making. And really thinking about, "Okay, is this truly most important? How does it fit in with my values? Why would I do this versus other options that are available?" And even thinking like if I say yes to this one thing, or if I really pushed hard towards this one goal, is that inhibiting my ability to say yes to potentially much more important things down the road, or even now.
As you're looking at decisions or goals or these life circumstances that happen it's a good practice to get in the habit of peeling back the layers on those, like, "What's my why?" So ask yourself why questions until you get down to the root purpose behind it or root cause. And ideally that is more in alignment with these values that you have.
Nobody has perfect alignment too. That's important I think to point out. Like all this stuff we're talking about helps pull the two together, but like nobody's perfect on this. So perfection is really just not attainable. It's more of like a constant tweaking and realigning as much as possible, tweaking even it evolves over life.
Like, I know mine have evolved as I've gotten older. Like my values have changed a little bit. And so that's important to kind of put out there as these will evolve. They're not gonna be perfect, but we're just looking for like improvement over time.
So let's talk about some, like practical examples of this and maybe I think this'll help you to kind of, you know, really start to think about it in your day-to-day life.
So common big decision that happens, it's really emotional and that oftentimes is one of the biggest mistakes in your life, but also can be one of the best decisions in your life.
So it's a really dicey decision, and that's the decision about buying your first home or maybe buying your dream home. The home buying decision is super emotional, tends to get like dicey. I've had the experience of working with people a lot on that particular decision, and it's kind of a risky one to where it's common that people deviate from their values on that particular decision.
So as you're approaching that decision, let's say you're transitioning into practice and you're thinking of upgrading common question we get is like, how much can I afford on a home? And the answer is like, I have no idea. Me as the financial planner, I'm gonna tell someone if I don't know their circumstances, I'm gonna say, "I have no idea."
Well, the reason is because I know it needs to be based on your values and I don't know your values and everybody's gonna be different, so if someone I don't think anybody would ever say this, but if someone said like, my number one value is to have a really nice house and that was all I cared about. Then I would say, we will go to the bank and see how much they'll loan you and whatever the max is, take it.
And there you go. So that's, like I said, that's a probably unlikely scenario, but at least you're living by your values. But what more often happens is people get caught up in that particular decision or any of these big decisions and they don't consult their values or they just haven't really thought about 'em in years.
And we get caught up in the motion of it, and then we go with some rule of thumb or what the mortgage person told you, or a realtor or whatever who has no idea what's most important to you. And then we just roll with it. You know, lean, heavy towards cultural norms. So that's why the culture, our culture has gone towards bigger houses and nicer houses.
There's constant pressure to have nicer things, and so you're gonna definitely get pulled in that direction of like having a nicer house when you're not having a firm stance on like what's most important. So ideally what you're doing instead of just going with a rule of thumb or like listening to what the realtor, the mortgage people tell you as far as a price to spend on or just picking a random number instead of going that direction and just picking, just doing it off of that sort of process. Ideally you are consulting these values. So I know maybe home is not on your list of values. But I'm sure it will tie into your list of things. So, I'll talk about like my scenario as an example.
So for me, if I guess if I look at this list of things, the relationships is probably where my home could tie in most into my values. But really it doesn't tie in directly so much aside from that. But relationships, it ties in because I want a nice place for my family to live and I wanna be in a neighborhood where I have people that I can associate with and build a relationship with and have families, which is happening.
I mean, have families that we can grow up with and have friends and that's where the relationship part is important. So having a house that kind of checks those boxes is important. But beyond that, it's like not super important.
So, if buying a house is gonna force me to compromise on something like spending time with my family. Then we're getting into like problem territory. Or if buying more house than the baseline that's needed to be in a nice neighborhood with good people, if buying more than that is gonna force me not to be able to like go explore new places like travel and you know, do the things that I would love to do there, that's when we start to get a problem.
So personally for me, it's like, I ideally am spending the least amount possible to check the box off of the relationship thing and have like a nice place for my family, and then I'm dedicating other dollars to things that are what I would say much more important to me.
A good example for me because my house decision was made so long ago. Like I, we've lived in our house like 10 years, so it's hard for me to remember exactly what life was like then, but I always have this one recurring in my world is the decision about a car. So I've talked about it before I drive an old junkie car.
It's like, it's not junkie, but it's like It's had a lot of a lot of good miles put on it. It's a good character building car we'll say. So it's a 2003 Avalon. It is every year or two I get in this thing where I'm thinking about getting a new car, whether it's like somebody else influenced the idea on me, or you know, my wife brought it up or whatever. It's like every year or two I start to think about getting a new car. And so lately, like, well, I guess as long as I've owned it anytime that's come up, one part of that process is I'll think about it from the view of like this kind of thing.
So what happens is I start to realize if I spend more on a car, which for me, if I really look at the car what's most important and why do I buy a car? I really don't care about the car itself at all. Like zero. I care about point A to point B. I don't drive very much. It's literally like a golf cart for me.
I walk to work. I drive my kids to soccer practice. That's about it. So it's a very low priority thing. So when I start to look at a new car and I look at the costs benefit of it, it's like basically taking away dollars that I would love to put elsewhere.
Like, you know, going on sweet trips with my wife or giving more charitably or traveling more like way, way better use of money for my personal situation than to spend more on a car. At least right now in my life. So I think it's been helpful for me as I set these goals to like consult values, these values and let them be the guide. And you know, they kind of keep me on track and pull me back towards that voice of reason.
Like I said, it's not perfect. These values, like they're a work in progress. They're constantly evolving and everybody's gonna have different variations and you know, it's gonna look different for each of you. But the whole idea of this is to start to get in a routine of thinking about what's most important and like documenting it and then consulting that as you make decisions.
So that's what it comes down to that. I think that's the big takeaway is what I would advocate for all of you is getting to a place where you have documented what's most important to you, like it's written down. And you're using that to make financial decisions, to set financial goals, to make decisions in life.
And by doing that, that's gonna really help improve your life and get you to a point where you're living that ideal life. That's really the goal of financial planning and really of life in general. So, that's all I got for today. Like I said, I'll put the link to this. I'm holding it as I'm talking.
If you are watching the video, you'll see these. But I'll put the PDF of this Exploring Values Exercise in the show notes that way you can reference it as you go through this hopefully it's a value to you and we will look forward to catching up again next time.
