Mitch Anthony
Mitch Anthony
FINANCIAL LIFE PLANNING
• What’ s their monthly spending? You might meet the greatest resistance asking this question. Sometimes you’ ll look for a“ guesstimate” and then follow up by asking:“ Would you like me to do some homework and tell you how close the guestimate is to the reality?”
• Are they making large purchases? If so, how often? Ask if they can give examples of their last two or three, and how the expenditures were decided?
• What’ s their travel and entertainment spending? How much do they spend on it every year? Do they have second homes, time shares, or regular vacation habits and a budget?
• What are their giving habits? Are there any charities they support yearly or monthly? What do they estimate their annual giving to be? Do they have aspirations to give?
Sometimes clients benefit most from the conversation they want to have the least. As one planner told me,“ From my experience, if someone is a spender before they retire, that doesn’ t magically change after they retire.” That problem could loom large in the United States when it’ s projected that 11,200 Americans a day are turning 65 from 2024 to 2027. These boomers are going to carry their regimens and habits with them across that milestone— but with a static income working against them if they keep spending the way they do. Something will have to give, and the first thing for advisors to look at is their spending patterns and habits.
If your clients have formed good habits, you can give them validation about their discipline. They might squirm a bit, but they’ ll be better off for knowing. Again, they can’ t make progress until you know the place they’ re starting from.
Financial Independence Or Dependence?
Think of what financial independence means. It means you are deciding to downscale your house because you want to, not because you have to. It means you work because you want to, not because you have to. It means you’ re in control of your own decisions and not reliant on outside factors.
Paul Armson( my co-author on the book Life Centered Financial Planning) has shared tips with me about how he talks about cash-flow modeling with clients. When they’ re asked about cash-flow assumptions, clients sometimes make sure to remind him,“ You’ re forgetting about my inheritance!” or“ You’ re forgetting about the sale of my business!” In other words, they mention a one-off future inflow that might have a positive effect on their cash-flow assumptions to help them fix problems.
Your job as a professional planner might in fact be to challenge those assumptions and ask,“ What are the chances of you actually selling your business for X amount of dollars?” Or“ How much inheritance are you expecting? And when?”
In other words, it helps you to introduce doubt. You might find the clients quickly conceding the point and agreeing to spend less to be on the safe side.
But in any case, you’ ll want to explain to clients that you’ re doing this because it’ s your job to help them become( and remain) financially independent— as opposed to financially dependent( acting according to things not in their control). An inheritance or the sale of a business does not in fact confer independence on anybody but actually makes them financially dependent on something uncertain happening.
“ If it doesn ' t happen,” you can tell them,“ you’ ll be in big trouble!”
It’ s enough to communicate this idea, if only to get them to take certain assumptions with a grain of salt and keep them thinking about the safety of their plan. If they feel better keeping those liquidity event assumptions in their cash-flow models, that’ s perfectly OK, too— as long as they’ re willing to sign something to that effect.
Paul, for instance, would grab a blank piece of paper and ask the client to sign a statement along the lines of,“ Dear Paul, please include in my financial planning assumptions the fact that I WILL sell my business for $ X million in today’ s terms, net of tax, on my 55th birthday.”
If you do this, you could frame it as a normal protocol for respecting a client’ s decision and make sure they understand that it’ s ultimately their responsibility, not yours. This would likely get the client’ s respect and make them even more reasonable about how much they’ re modeling.
With the right cash-flow modeling software— used properly— you have power. You can stand up to unsolid assumptions. And if clients want to secure their future and become financially independent, it’ s your job to make that happen.
If you’ re honest about these things, they ' ll trust you more and recommend you more to others.
MITCH ANTHONY is the creator of Life-Centered Planning, the author of 18 books for advisors and their clients, and the co-founder of ROLadvisor. com and LifeCenteredPlanners. com.
18 | FINANCIAL ADVISOR MAGAZINE | NOVEMBER 2025 WWW. FA-MAG. COM