The Art of Financial Planning: Creative Optimism over Rational Pessimism

Are you tired of the same old financial planning advice? It's time to tune into our latest podcast episode: "The Art of Financial Planning".

In this episode, we dive deep into the world where finance meets creativity. Discover why financial planning isn't just about numbers and spreadsheets – it's an art form that blends science with imagination. 💡🎨

What's Inside:

• 🌐 The Intersection of Art and Science: Explore how blending analytical rigor with creative thinking can revolutionize your financial strategy.
• 🧩 Customized Solutions for Real People: Hear about unique financial plans that bring dreams to life, tailored just for you.
• 💭 Creative Problem Solving: Learn how thinking outside the box solves financial puzzles 
• 🔄 Adaptability in a Dynamic World: Stay ahead in the ever-changing financial landscape 
• 🎯 Visualization and Goal Achievement: See how envisioning your financial goals can make them more achievable than ever.
• 🛡️ Risk Management Redefined: Find out how a dash of optimism can transform the way you manage financial risks.

Every financial journey is unique, and this episode is your compass to navigate it with creativity and confidence. Whether you're planning retirement, managing investments, or just curious about financial planning – there's something here for everyone!

Make sure to like and subscribe if you enjoyed the show!

For more information on StatonWalsh please visit, StatonWalsh


This podcast is for informational purposes only. Although the information has been gathered from sources believed to be reliable, please note that individual situations can vary. Therefore, the information should be relied upon only when coordinated with individual professional advice. StatonWalsh and Founder’s Financial Securities do not provide tax, legal, or accounting advice. Consult your tax, legal, or accounting professional regarding your individual situation.

Ryan Staton is an Investment Advisor of, and securities offered through, Founders Financial Securities, LLCMember FINRA/SIPC and Registered Investment Advisor.

Devin Walsh is an Investment Advisor of, and securities offered through, Founders Financial Securities, LLCMember FINRA/SIPC and Registered Investment Advisor.

Check the background of this firm on http://brokercheck.finra.org/

Chapters

• 0:00 Financial Planning
• 11:29 The Importance of Visualizing Financial Plans
• 20:18 Embracing Unconventional Approaches in Life

Transcript

: 0:00

This is Wealth Builders, presented by StatonWalsh, a show designed to pull back the curtain of the financial industry and bring true transparency to the forefront of conversation. On the show, we cover topics like financial education, current events and interview business leaders and industry experts, with the ultimate goal of helping listeners discover their own path to financial independence.

Devin Walsh: 0:39

Hello everyone and welcome to this week's episode of Wealth Builders. Before we get into this week, Ryan, I got to ask you do you consider yourself an artist?

Ryan Staton: 0:49

Not at all. No, I can't draw or I can appreciate art, but I don't have much of an artistic side myself, admittedly.

Devin Walsh: 1:00

Let's talk about this beautiful blog post you just wrote about the art of financial planning. Today's episode is all about how to be creative in financial planning because there really is an art to it and creating outcomes for your life. Let's kick it off that, ryan. Let's talk about financial planning. What elements go to creating everyone's own masterpiece, their own financial lives?

Ryan Staton: 1:34

I think when you talk about financial planning, it's important that you have to define what that even looks like or what that means. Most people, when they think about the idea of financial planning specifically, they'll look at things like numbers, budgets. They kind of look at things through like how do I calculate probabilities of success? And a lot of it is mathematics based, and that's not always the case when you're building a financial plan. The reality is that money is a vehicle to achieve goals. We all have goals and wants as individuals, ourselves included. When we're going through the process of trying to plan around those goals and objectives, we have to figure out which vehicles make the most sense to help us get there and achieve them. It's not necessarily as simple as saying take a dollar, put it into this account, multiply it by this much, and I will have this in the future.

Ryan Staton: 2:32

Life does not work as an equation. It doesn't work in linear fashion. I think we're all probably aware of that in some way. Everyone's had an example of life throwing them a curveball along the way.

Ryan Staton: 2:45

When you talk about numbers and math and all these equations, they're helpful and they're helpful metrics to use, but they're only part of the story, the color or the art behind it, is really figuring out how you take the hard data, which is the numbers, and the soft data, which is the things that I'm feeling, things that I want, things that I want to achieve in my life, and how am I going to use this vehicle money in this case to achieve those things, and what kind of feeling or sense of fulfillment am I going to get from that specifically? That's hard to do. Not everyone is great at it, and that's why it makes our profession significantly more challenging too is that you have to not only learn how to manage the formulas, but also understand and have emotional intelligence when you're dealing with people's lives and their biggest discussions that they'll have in the near term and long term, when we talk about financial freedom and independence and retirement.

Devin Walsh: 3:53

Like you said, there's a science to it too, because there's a lot of data, there's a lot of numbers and products and calculations and Monte Carlo simulation all these things. There is some type of intersection as well between art and science. How do we use these vehicles in a creative way to create that outcome?

Ryan Staton: 4:12

that everyone's looking for.

Ryan Staton: 4:14

And that's true in certain areas like investing is a specific area where there's a lot of data and science and number crunching that goes into that process. But how do you align that with individual aspirations of people? And so markets move in cycles. We've seen that, we've experienced it. But we as investors, even if we understand the data, get emotionally attached to the moment that we're living in today. That's never been more true than now.

Ryan Staton: 4:46

Market has moved drastically in multiple directions in a very short period of time. If you think what happened during COVID sharp decline, sharp upswing 2022, gradual yet drastic decline. And when we talk about US stock markets, and then 2023, kind of the opposite of that. And so we know that these things happen and we understand the statistical measure of if we do things with a long-term point of view. Things tend to work themselves out from a market perspective, even though we have a mathematical understanding of that, unfortunately we have an emotional side to our brain, so there's two sides to every human's brain, and so how do we merge those two together and really convince ourselves that we can be optimistic about things when everything around us tells us that there's not a really good reason to be optimistic?

Ryan Staton: 5:46

Or maybe we should be pessimistic about our outlook, and so there are certainly times where the calculations don't yield a result that makes people feel warm and fuzzy, but, at the same time, everything that we do is point in time. If we're talking about today and so looking into the future, looking and none of us have a crystal ball but we do know what you're trying to achieve, what you want out of again the vehicle, the product, the money, the account, whatever you wanna call it. So how do we just merge that with the emotional attachment that we have to something that is on your mind or a planning item that you kind of have on your horizon?

Devin Walsh: 6:29

Yeah, we always say math's not money, money's not math. They're usually that old commercial, that ING commercial. What's your number? Oh, it's $2 million for retirement. But how do we get there? And it's so arbitrary because it's not. I think about that and it's like, yes, that's great, but we're looking at a number 20, 30 years, sometimes down the road with inflation, all the other things that go into much financial life, and I think that's really become the art and the natural plan and like the customization of no two individuals or like, no two business or like, and there's so much product out there you go look at on the news or every single day. There's no insurance, product, investment, product exchange, trade of fun. Here's the hot stock to buy. There's always different things that we had to deal with, all this financial data coming at us. But how do you clear through all that, create a clear, precise way to create the exact piece of financial art so it gets you to that number and that commercial?

Ryan Staton: 7:28

Yeah, there's a really interesting element to human development in general, and just psychology, is that we're pretty heavily shaped by our environment, and so that seems to be true socially as well, and money is a social thing, like whether people want to believe that or not. The environment we live in today is that, like you said, there's a lot of information. The speed at which that information moves is faster than it's ever been. You can get access to financial data on your phone in a matter of seconds. There's apps associated with this stuff, and so Naturally what happens is we are influenced by our surroundings and by our environment, and so when social media or somebody says, like things are great, things are bad, we react to that, or we feel the need to do something to move the needle. And so what do we do about that? When we're talking about financial planning, well, those are things that are knee-jerk reactions, potentially, and that doesn't really focus on the plan itself, and so our job as advisors and really the point of all this is that, by understanding the art that goes along with it, we can take that data and all of that information that's being dumped into the universe, whether it's through social media or informational apps, whether it's legit or not. We can use some of that for good, but how we do that and how we position that is really the art in all of this, and so you mentioned customized solutions.

Ryan Staton: 8:59

Financial planning in itself is pretty much a problem-solving project. I have a goal or an objective, I have a resource that I can use to get there, and I potentially have a surplus or a gap, and now if I don't have enough to do that, that is a gap, and so, from purely analytical lens, you could look at that and say, like all right, how do I calculate a way to get there? In our true problem-solving environment, like if you look at some of the best companies and corporations in the world, they have these creative think tanks and the ability to tap into the potential of their employees to help them think beyond the scope of what's normal, and so I think financial planning is no different. We have to be willing to go outside the box to solve problems, and so there are certain products or strategies that might normally fit in a box for a majority of Americans, but there's definitely instances where we can get really customized and not adhere to the standard if someone wants something a little more specific in their life. So I think that's a big part of it.

Ryan Staton: 10:08

There's also the adaptability component, where things are moving fast, they change fast. We've grown in a world of, over the past several years, of different types of investments. You think about cryptocurrencies and some of the attention that those types of things get. People don't really some understand, some don't understand at all. How does that fit? So, being adaptable and staying nimble in our role as a planner, and understanding things that we may never use, like there's a reality that there are products out there and things that exist in the marketplace that we may not agree with, we may never use, but it's important for us to understand them so that we can properly educate people on that and use that in a comprehensive process to make sure that clients feel good about what they're doing and they don't get sucked into the normal kind of the normal flow downstream of hey, there's this hot new thing, a shiny new object that need to figure out how I can use it to plan.

Devin Walsh: 11:08

It's not even that, it's this tax laws it's, it's just law in general are changing.

Devin Walsh: 11:13

you know, like we had the secure act 2.0 came out it was last year, the year before that there's talks about, you know, the state taxes changing sunset here in a few years. So it's like being adaptive. And then boy who said for these things? And then I that it's. You know, one of the most important things in life in general like you talked to anybody who's successful was they is a visualization and motivation to how do we get to that end goal. To write these things down, I think having a way to visualize your life, whether it's the financial plan software, right down your goals or Like around, kind of like how we're going to get there, how we're going to visualize this and that comes down to that, that piece of art, right, like, what does that look like there?

Ryan Staton: 11:54

Yeah, there are people that are analytical or visual or, you know, emotional or express a of all these different personality types. I think that's the challenge to is that If you're someone who looks at finances through the lens of its form, so if you're an analytical person, you love spreadsheets, you love this idea of calculations and formulas. If you're a visual, conceptual person, you don't necessarily love that idea. That that's where you kind of glaze over and you're like okay, great, I can get there if I do this, this and this, and there's nothing exciting about that. And so I think, like, when you're building your own plan, and for folks that work with planners, like our clients or people that don't I think that's where a lot of people get lost is like they don't know where to start and they don't know what they should be doing and they don't know how to visualize it. They have an idea in their head and that idea is that they want experiences, they want accomplishments, they want some kind of enrichment.

Ryan Staton: 12:49

Money is a way to help achieve those things. But how do I get there? So, having visualization, like you said, like seeing it, some people have vision boards, people have physical financial plans, you have all kinds of technology and you know things that we provide and things that are readily available out there in the market where you can go like plug in information and get Quick, easy. You know visuals on, you know progress tracking, for example. So those things are important. I think that as technology is advanced it is made a lot of what we do more adaptable to different people and different personality types and not kind of a cookie cutter one size fits all. So it's definitely evolved as an art and that emergence of like the combination of art and science has been made possible because of some of the advances that the industry has made, either through technology or just other creative thought leaders really getting ahead of the curve.

Devin Walsh: 13:50

I mean you look at just five, ten years ago what a financial plan was. It was a 80-page document put on a client's desk, at spreadsheets, numbers, and it's like, all right, that's more confusing than visualizing what success is, you know? So it's really amazing how that technology and how planners have adapted to what the new age client is looking for when they're visualizing their ends.

Ryan Staton: 14:13

Yeah, I think the length of a financial plan does not guarantee success, so the longer it is, the better it is, or guarantee quality for that matter. I mean, there are tons of people out there that have this idea. There's some folks like the Carl Richards of the world that have like the one-page plan idea. He was a big champion of that movement and that's essentially like taking what could have been on 80 pages worth of work and kind of boiling it down and condensing it down to let's get everything on one page where you can look at it once a year as a client and say like I'm doing these things, I'm not doing these things. Here's what I got to do to move the needle and ultimately that makes it universally acceptable or helpful and you don't eliminate people or weed people out of the process.

Ryan Staton: 15:02

And so there are going to be cases where those longer you know we don't bind plans or like create physical deliverables much anymore, but there are cases where those types of plans make sense and there's a lot of cases where they don't. And so understanding how to do that is, you know, the kind of the whole foundation of the conversation we're having today, which is, you know, it really is just as much an art as it is a science, and it's important to understand that, to know that you know if you're in a situation where you're trying to build financial plans and you're just like, feel like you're inundated with numbers and you're overwhelmed by these calculations and formulas, like it doesn't have to be that way.

Devin Walsh: 15:42

When you look at people who collect high end art, what do they do? They protect it. They insure it. There's something around it to make sure it's not damaged. And it goes to the exact same thing with the art that we're creating your masterpieces. How do we protect it? What's the risk management aspect of the financial piece of art we're creating to protect this beautiful thing that you're creating? I think that's one of the biggest things people often lose track of when they're talking about the financial plan. Do always great things to grow wealth, grow their assets, do everything they want to do, but one thing can ruin all of that. So I think risk management from the insurance perspective, from risk tolerance, and investing minimize vulnerabilities when it comes to your plan. I think it's one of the most overlooked aspects of financial planning.

Ryan Staton: 16:27

Yeah, Our industry loves to use terms like and visuals about, like climbing mountains, and there's all these visuals of Mount Everest and things like that. But the best way I could describe it is if you were to approach a plan without and that whole idea behind that is accumulation is you're climbing the mountain, you're trying to reach the summit, which is eventually that point of hey, I can do the things that I want to do. That's that point of enrichment that I talked about earlier. And then from there you have to get back down safely, which is a whole nother conversation as a part of this.

Ryan Staton: 17:03

But to go through the idea of planning and not taking a consideration risk management, vulnerabilities, things of that nature, I mean that's essentially like you're trying to climb a mountain with no equipment. You're going off and trying to climb Everest without the right coat, you're wearing a windbreaker instead of a massive parka, and people can get away with it. You can get away with that to some degree, but there will be a point in time, naturally, where things will not go perfectly, and so that's the hard part is that the science, the math behind planning is done in a vacuum. It's under the assumption that literally nothing goes wrong. Like I'm writing this down on this piece of paper two plus one equals three, or some calculation or version of that formula, and that's what I need to do, what I want to do, and that's all I have to. I just have to make those two things add up and I'll get there. That's not reality, unfortunately.

Ryan Staton: 18:04

I mean we're in a unique position that we experience a lot, I'd say. As advisors, we've seen a lot more bad stuff than most other people do in a lifetime. Unfortunately, we've seen those curveballs play out. Some have worked out perfectly fine. Some are things that you can't do anything to mitigate after the fact and ultimately can't be reversed, and so once it's done, it's done, and so it's not to be doom and gloom. But ultimately you do have to think about those things. Like you said, minimizing those vulnerabilities will prepare you to be able to continue down the path that you're on and in the event that you can't continue on that path or you have to take a different path, the whole thing doesn't just blow up and now we have a, like you said earlier, an 80-page document that's basically kindling for firewood at that point. That's reality, so things have to be addressed.

Ryan Staton: 19:02

It's not I mean from my perspective like there are formulas and things that most certainly go into it, and I'm kind of partially an analytical guy myself, so I use a lot of numbers and projections and in practice and in my own life. But I also understand that everything doesn't plug into a spreadsheet. Life doesn't work that way. It is very much a dynamic journey. It requires a combination of that analytical thought and it doesn't have to be more heavily weighted one or the other, but there is some thought that goes into it. But it's a lot about creativity and creative thinking and being able to think outside the box to get where you want to go.

Devin Walsh: 19:47

And so it's dynamic, like you said, this is always ever-evolving. So, as we're wrapping up, if you ever have any questions about creating your own masterpiece around financial planning, I think it's so important to visualize what you want in life, and it's not just visualizing retirement, it's visualizing the things you want to accomplish in the short term what's the next six 12 months look like? What's the next two to five years look like? So it's extremely important. I believe visualization is powerful in every aspect of life. So, but we really appreciate everyone listening in. Today we were going to post in the blog post along with this podcast, and if you like today's episode, please like and subscribe. All right, any last minute thoughts from you as we're wrapping up? No?

Ryan Staton: 20:28

no, obviously, I'm a little biased. I think we're awesome at this, but I think that no. I think we are living in a new age in a lot of ways, and this is not just not just financial planning related, but just in a lot of aspects of life and so it's okay to be outside the box, it's okay to be different, and if you're doing something different than your coworker or somebody else and you know when you're sitting around the water cooler having those conversations like, I think it's perfectly normal.

Devin Walsh: 20:59

So there's a reason for that, for sure, yeah.

Ryan Staton: 21:01

Yeah, and so I think, I think if you're not getting that from your relationships today, whether it's this or anything else that you're, you know you're working with professionals in your life. Like it is possible, it's out there, it's a don't be afraid to kind of branch out, pick outside the box.

Devin Walsh: 21:17

Awesome. Thanks everyone for listening in today. We hope you have a great week and stay tuned for our next episode.