What I’ve Learned this Summer

Daniel YergerAbout the Firm 4 Comments

Guest Written by Samantha Rauch

Hello! It’s the end of an era, my nine weeks with MY Wealth Planners has flown by and it’s crazy to think I’ll be back in class in a few short weeks. Dan asked me to write this piece to talk about what I’ve learned about people and their personal finances as a student who is still learning about the technical parts of financial planning, in the hopes that you can get some perspective into people’s personal finances.

I’ve Learned…

Financial planning is a mixture of both art and science. The science is the stuff that I’m learning at UC Boulder in my Personal Financial Planning classes, but the art is the really interesting stuff. A large part of the art is getting to know your clients and through doing so creating a financial plan that addresses their specific life goals. While interning I was able to grasp just how different each individual client is, as well as seeing some of the similarities between each. On a more general scope there are three types of clients that we encounter when financial planning. There is the DIYer, the do it yourself client. They are usually not interested in professional guidance or they want as little of it as necessary. Then there is the validator, the client who thinks they have the right answer but wants a professional to verify their beliefs or to correct them when they are wrong. Lastly, there is the delegator. This is the client who wants you to do it all for them. Each type of client has a different idea of how they want their financial plan to go, and is going to want to be more or less hands-on during the process.

Where we are

On a surface level, people often struggle to express what their financial goals are. They deal with a lot of uncertainty about where they are, if they’re on track, if they’re doing the right things and so on. These goals generally come down to either wanting a sense of financial security or desiring financial freedom. However, when the concept of financial burden is removed (“what if money wasn’t the issue anymore?”), clients are more inclined to explore self-catered goals such as house renovations, travel plans, and even bigger purchases such as a house or new car. Often the only thing keeping them from doing these things is uncertainty about their finances.

When working through a financial plan, I found that clients generally have difficulty prioritizing their long-term goals such as retirement, college funds (if they have kids), or optimizing their investments. Regardless of the type of client (Validator, delegator, etc.), clients are often unclear about where they currently are in relation to their life goals and often need significant help getting on track. Although there are a lot of similarities between clients there is also a unique set of expectations each client has when planning their financial future.  These expectations can mean a variety of different things depending on each person’s circumstances. I have come to learn that there are many different views on how financial planning should be accomplished. Some people with more money than I think I will ever have will be afraid that they’re not yet financially independent or able to do what they want in life. Others are just barely making it, and yet they’re confidence that things will work out.  

Living your financial values

There are fewer resemblances when looking into client’s values. Client beliefs are as varied as they are, and their social and ethical beliefs will heavily affect their financial priorities. Usually, if clients do have preferential social and ethical values, they are willing to express that: “I don’t want to invest in _____” or “I only want to have my money in ______.” Some more common examples of these that I noticed were people wanting to exclude any products that they feel strongly about such as tobacco products in their investment portfolios or wanting to choose only environmentally sustainable investment portfolios. When considering social and ethical applications, certain aspects may be excluded out of their investment portfolios depending on their preferences, they may contribute more in their communities, or donate more to charity. All of these will impact the way their financial plan is structured.

For all our differences we’re very similar

Just in the time frame of interning, I have learned a lot about how to cater to the expectations and values of different clients. Every client resembles another in some way; however, each set of goals and values will be unique to the client and their future. Through the process of interacting with different clients I have come to learn that usually people do not fully understand their finances. One of the ways this can be shown is through assessing their goals and values and then trying to see if they align with their finances. Are there some gaps in the plan that are causing people to not meet their goals? Are there adjustments that could be made to maximize wealth to reach some of those harder to reach goals? Generally, the answer to these questions is yes. Some common misconceptions that I have noticed are that people tend to think financially successful people do not need help when it comes to their finances because well, they are financially successful. Conversely, people who aren’t financially successful often think that they aren’t qualified for the help of a financial planner. There are a lot of moving parts that go into a comprehensive plan and it is important to understand them all in order to maximize your wealth as well as accomplish your goals. Often people are not fully aware of all the moving parts. Another common misconception that I see is that people measure their finances solely on their earnings or spending habits. While this is important other things such as finding new ways to save on taxes can make that much more a difference in your financial life.  Taking that deeper look into people’s financials can help find new ways to save them money and then further help them accomplish their goals.

I had a great time learning about personal finance this summer and how financial planning can change people’s lives. I hope sharing a bit of what I learned with you teaches you something about your own personal finances!


Comments 4

  1. Samantha, you’ve learned some important keys to the human relationship with money! I’m glad I got to know you a bit over these nine weeks and wish you well as your adventure continues!

  2. I never leave comments on these because it is just the way I am. (Dan is my son and knows I believe almost everything he says.) I’m glad your internship went well and that you gained some knowledge about the financial planning world. Your piece was really well written and gives good insight to what is learned as an intern. Thanks for writing this.

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