A number of years ago I started referring to certain conversations as “off the balance sheet” topics.
Technically speaking, “off-balance-sheet” is an accounting term where a company or individual doesn’t include something on their balance sheet. That’s sort of, but not entirely, what I’m referring to here.
In the financial advice world, a lot of what we talk about usually has to do with dollar and percentage signs – things that show up on typical financial statements, like a statement of net worth or income statement or balance sheet.
And they’re valuable. No doubt. We want to help clients, and ourselves, make wise and sound financial decisions. And oftentimes those decisions include dollar and percentage signs.
Yet I think there’s so much MORE of what we can – and maybe should – be talking about.
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I’ve shared this story before, but within a few years of being in this industry I was having a phone call with a college roommate who lived on the other side of the country. He was asking how my job was going, and asked me out of admitted ignorance what exactly a financial advisor does.
I talked about investing and tax planning and cash-flow and insurance and such – what I was learning on the job and helping my clients with.
He dead panned and asked “So you help rich people get richer?”
This was on the phone, so I couldn’t see his face. And I don’t know if he was intending for the question to be quite as jagged as I received it as – but it hit a nerve. I don’t remember how I replied. I don’t even remember anything else from the whole conversation.
It stuck with me. Like that annoying tiny splinter in a finger you can’t ever seem to get out.
Except this splinter was the size of a dagger straight into my heart. Into my perceived identity. Into the legacy I thought I wanted to leave behind.
I don’t think there’s anything wrong, necessarily, with helping “rich people get richer.” Yet for me, it rang a bit hollow. I didn’t want that to be my only career objective and metric of success. I didn’t – and still don’t – want that to be what I was remembered for.
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In the months following that call, I stumbled across a few resources that started getting me to rethink and reshape what I really did with clients.
Talking with them about their values. About their goals. About the real mission behind their money. What did they really want to DO and who did they really want to BE? And then how can we use money to move towards that?
Carl Richards has an amazingly powerful sketch to show what the work of Real Financial Advice is. It’s aligning people’s capital (money, time , skills, and energy) to their values.
And this is what I mean by Off the Balance Sheet conversations.
It’s a pretty generic term that I use to delineate strictly financial topics with dollar and percentage signs from everything else that might be going on in someone’s life.
In fact, thinking of the content of this website – Calibrating Capital – it’s the underlying current of pretty much every single post I’ve written.
What’s more is that I’ve found that, maybe ironically, better Off the Balance Sheet conversations lead to better On the Balance Sheet decisions.
When advisors (or individuals) take the time to really get clear on what is important to them, then the optimal financial decisions become more evident.
Instead of following someone else’s generic, sequential 11 point financial plan made for the masses – we craft a tailored plan, a customized approach that best aligns with what’s most important to folks.
Clients (and ourselves) are more likely to act on certain recommendations or action steps because they (or we) can see WHY we’re doing it. It’s not just to check a box, it’s to better calibrate our finances to our life.
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When I think about the resources that were widely available when I first started in this industry and compare it to today, it’s amazing. There are so many amazing people and amazing organizations doing amazing work to facilitate these conversations.
If I may be so bold to add myself to this list, I’m excited about what Andy Baxley and I have built (along with Carl Richards as a guest) in our recent project: The Statement of Financial Purpose Course.
It’s a video-format (23 videos) course, along with an accompanying SoFP workbook, designed to equip advisors to have these Off the Balance Sheet Conversations in the specific form of helping clients create their own, unique Statement of Financial Purpose. (Use discount code CALCAP for 20% off any of the available options.)
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Regardless of where or how or when folks have Off the Balance Sheet conversations, I want to see more of them. My vision would be for these types of conversations to play a meaningful role not just occasionally on topics regarding money, but regularly. That people wouldn’t make an On the Balance Sheet decision without first thinking about how it impacts them Off the Balance Sheet.
Money is a tool. It’s a means, not an end. Most people agree with that.
So let’s start talking more about what we want to accomplish with it.