Why Planning Matters

by Jamie Menges CFP®, CPA Shareholder, Wealth Manager

 “True wealth is wanting what you already have.”

After hearing this statement the other day, I have been thinking a lot about what it means and engaging clients in conversations about it every day. I keep unpacking it from multiple angles.

Is it suggesting wealth can reside in a static state? Odd, because this seems counter to what I’ve spent my career helping younger clients do, which is accumulate wealth, grow it, and ultimately try to preserve it for fear they might not have enough of it. In my mind, this resembles a moving trajectory each step of the way that is always measured.

Is what we already have enough? Today, this seems harder than ever to subscribe to. A twenty-four-hour news cycle, talking heads, social media, and a nonstop flow of eye-catching headlines gives us a heightened fear that what we have is never enough. It appears as if a disaster is just around the corner or that someone (no, almost everyone) is better off than us, leading some gleefully happy life as shared on Facebook, Instagram, TikTok, etc. So, surely, what we have can’t be enough.

Planning for Enough

The fact is, I’m in this business for two reasons. First, I love helping people understand things because it empowers them to feel confident. Second, I’m a numbers guy – always have been, always will be. So while I’d love to tell every client “you’re going to die with plenty of money, so go start spending some of it”, I first have to be confident in the numbers. This is where our planning efforts on behalf of our clients become essential.

Financial Planning v. Investment Management

At PDS Planning, we go to great lengths to build financial models accounting for income, expenses, inflation, and taxes. Once we have established a financial model representative of our client’s lifestyle, then we stress test it by adding in life’s unexpected surprises – what if they retire early, have a long-term care expense, need to financially help their adult children, see varying rates of return on their portfolio, or they want to support the charitable causes most important to them?

Along the way, we also do extensive tax planning so they keep as much as possible, review their insurance plans, verify they are not overpaying unnecessary product expenses in their portfolio, and make sure they have the proper estate documents in place to transfer wealth upon their passing. And while wealth management is absolutely part of the planning process, this is probably a good time to reiterate that financial planning is not investment management.

Far too many advisors call themselves planners, only to spend their time gathering client assets in order to bill their percentage fees against. Let’s be honest, 1.00% multiplied by millions (in many cases billions) of dollars is a lucrative business model. This is also a good time to acknowledge that the size of one’s investment portfolio does not correlate to the amount or complexity of work that must be done for any particular client. Beware of this advisor tax!

Finding True Wealth Through Planning

Now for the good news, once the planning framework is in place, we can continually review and revise it to meet our clients’ life changes. This ever-evolving financial plan serves another great purpose – it allows our clients to maintain a rational mindset during times of market volatility. They understand it’s not timing the market that is important, it’s time in the market. How do we stop ourselves from making irrational decisions? We refer back to our planning framework which was designed using sound logic.

This can now serve two purposes. One, our clients can recognize with some degree of certainty they will not run out of money in their lifetime. Second, this should remind them they indeed do have True Wealth. Not measured against someone else, but measured against their purpose in life, the activities they find meaningful with the ones they love.

As an advisor, I see levels of wealth that sometimes lead me to want more, for the mere pursuit of wealth. Then I look around at my family, my friends at PDS, the work I get to do every day for our wonderful clients, the kids I get to impact through coaching youth sports, and the “few” rounds of golf I get to play during the warmer months here in Ohio and I’m reminded, I already have what I want.


IMPORTANT DISCLOSURE INFORMATION: Please remember that past performance is no guarantee of future results.  Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by PDS Planning, Inc. [“PDS”]), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful.  Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions.  Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from PDS. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. PDS is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice. A copy of the PDS’ current written disclosure Brochure discussing our advisory services and fees is available for review upon request or at www.pdsplanning.comPlease Note: PDS does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to PDS’ web site or blog or incorporated herein, and takes no responsibility for any such content. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly. Please Remember: If you are a PDS client, please contact PDS, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services.  Unless, and until, you notify us, in writing, to the contrary, we shall continue to provide services as we do currently. Please Also Remember to advise us if you have not been receiving account statements (at least quarterly) from the account custodian.