A Framework for Financial Freedom
From 5th to 11th October Chesterton House will be supporting Financial Planning Week, a worldwide event to celebrate and promote the benefits of sound financial planning. As a contribution towards the week's activities, our Chairman Andy Jervis reflects on the work of one of the world's leading visionaries in this hugely important vocation.
I’ve been influenced by many people over my career as a Financial Planner, but there are a few who stand out for their contributions to both the financial planning profession, and to my own personal development and understanding. One of these is George Kinder.
Now 72, George is still very active in promoting financial planning as the path to personal freedom. He is often described as the father of the Financial Life Planning movement, and he has written several books on the subject. For me his first book, The Seven Stages of Money Maturity, remains his seminal work, providing a framework for understanding our life’s journey in relation to money and unlocking the keys to both ‘money maturity’ and personal freedom. The framework he describes is one that I have used many times when working with clients to help them to explore their current level of understanding, to resolve difficult money issues, make sound decisions, and to achieve a sense of ease and equilibrium around money that is the ultimate goal of the journey.
The Seven Stages are grouped into three distinct parts. First comes Childhood, signified by Innocence and Pain. George describes our childish Innocence, whereby we neither know nor care how money works, and our first pains of Adulthood as we realise that we need to make our way in the world, and that effort will be required. Innocence isn’t just a childish state, however, and George describes with numerous examples how people who are otherwise mature can fail to make progress in the world of money because they cling onto childhood beliefs, some of which can last for a lifetime. Traits such as chronic overspending or hoarding, dread and disempowerment around money, inability to attend to practical necessary financial tasks, and investing in the latest get rich quick schemes are all signs of individuals who are stuck in Innocence, and have failed to satisfactorily break through the Pain barrier necessary to developing money maturity.
The second part of the journey is Adulthood, signified by Knowledge, Understanding and Vigour. In addressing the Pain of childhood beliefs, an individual realises that there are things that they need to know, both about the world of money itself and, crucially, about themselves. Knowledge revolves on learning the specific skills needed to handle money effectively, but also about money’s virtue. George describes the freedom and integrity inherent in money and its use, and how the journey into money maturity and personal freedom are naturally intertwined.
Knowledge is also concerned with identifying personal goals, and George uses a number of exercises to be able to identify your own goals, not just in a monetary capacity but in the sense of who you want to be. Taking time to delve deeply into your most personal goals and motivations is an essential step in both personal and life planning, and forces one to confront the question of what you are prepared to sacrifice in order to achieve a bigger and more noble objective - an important step on the journey to adulthood.
Understanding, the fourth of the Seven Stages, is involved with the practical application of our newfound knowledge as a step on the road to wisdom. More importantly, though, it is about understanding ourselves at a much deeper level. It is about confronting our fears and confusion around money issues, and allowing ourselves to become vulnerable, acknowledging our feelings and emotions and starting to let them go. Indeed, letting our thoughts go and letting feelings be is one of the core teachings of the book and of George’s work with clients and financial planners over many years.
The fifth stage of Money Maturity is Vigour. As we develop our Knowledge and Understanding we start to become aware of the possibilities for our lives, and our energy levels increase. It is in this stage that people find the resources to build successful careers, found great enterprises, or carve out a life for themselves that reflects their true purpose. It is about taking action and moving towards a wholeness of spirit. It is about discovering who we are.
The third part of the journey towards Money Maturity is Awakening, signified by the stages of Vision and Aloha.
Vision is about inspiration, “the deep soulful urge to focus all of our energy on a goal that reaches beyond our beings into a context larger than ourselves.” It is about understanding our place in the world, what we contribute and how our actions align with our values and goals for the benefit of humanity. George gives examples of visionary leaders, people who have come from humble beginnings to inspire us with their vision, such as Nelson Mandela or Walt Disney, but also people who demonstrate vision in their own communities, inspiring others around them to take action towards a noble objective. It is about changing our perspective from acquisition to contribution. It is becoming clear about the gift we make to the world.
The final stage of money maturity is Aloha, a Hawaiian word that describes a state of humility, kindness and blessing that passes from one person to another. Aloha is not a financial state, it can be given by a poor person to a rich one, or vice versa. It arises from the place inside us where we have emptied ourselves of attachments to objects and stories and can give ourselves spontaneously, genuinely, and lovingly to another. Aloha flows without effort, and represents a profound sense of ease around money and life, enjoying our existence and taking pleasure in the seemingly mundane. Some might describe it as a state of grace.
In my work with clients, I have seen people make huge changes in their lives as they become aware of the possibilities that effective financial planning can deliver. This doesn’t mean that they suddenly acquire an ability to create detailed spreadsheets, become intimate with tax laws, or gain a thorough understanding of the stock market. What it does mean is that, by getting really clear about their goals, understanding the misplaced beliefs that are holding them back, and learning to associate money with integrity, generosity and enterprise, they become passionate about the things that they can achieve and find new resources and energy levels that carry them forward into more fulfilling and rewarding lives. Along the way they learn more about themselves, and develop greater wisdom and integrity around money that flows into their interactions with others.
Thank you, George, for your contribution to my own development and consequently to that of my clients. You have been a great teacher.
Andy Jervis, CFP
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