Life Plan First

Personal financial planning is, in Frederick Herzberg’s terms, a “Hygiene Factor.”

Herzberg theorized that satisfaction and dissatisfaction are independent things.  Some things increase satisfaction when present, while others, if not present create dissatisfaction.  The paradox is that eliminating a dissatisfier does not improve satisfaction.  It can get you from dissatisfying to no effect and that is good, too.

Personal financial planning is part of a bigger life plan.  If you do this planning well you may or may not have a satisfying life, but if you do it it poorly, satisfaction will not be forthcoming.

For perspective this piece from The Bank of Montreal helps to give you the picture.  The Four Keys to Longevity.  In this, the idea of longevity serves as an analog for a life plan.  The essence of the idea is that longevity requires four interacting factors.

  • Mind
  • Body
  • Financial, and
  • Social

In all personal financial planning, keep finances in perspective.  The planning and execution is important but not exclusively so.   In keeping with Herzberg’s theory failing on any of the four issues will be unsatisfying.

In the BMO paper, Gerontologist Alexis Abraham says:

“Aging is an inescapable process. –
Aging well is a conscious choice.”

like financial success. Pay attention to all the factors in your life plan.  The financial plan does not exist in isolation.  Make your financial plan serve and support your other factors.

Be sure your advisors understand the meaning of what you are trying to achieve and they recognize your finances are just a tool.

Don Shaughnessy is a retired partner in an international public accounting firm and is now with The Protectors Group, a large personal insurance, employee benefits and investment agency in Peterborough Ontario.


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