The MINDFUL Finance Methodology
Meaning - uncover and understand your individual values, what does a meaningful life look like for you?
Inspect – where do you currently stand, and where do you want to be – are you living the lifestyle you desire?
New Ideas – what could you do differently to better align to your desired lifestyle. In this part of the process we test different potential scenarios and assess their impact.
Direction – after assessing the paths available, define a clear path to your desired lifestyle with a tangible action plan.
Fulfil – put any immediate plans into action.
Update – life is ever changing, updates and adaptions are inevitable so it is important to keep reflecting and refining.
Live Life – don’t forget to enjoy the ride.
Developed and refined by experienced financial planners, the Mindful Finance Methodology is a proven seven step process for planning, implementing, and realising your desired lifestyle.
A key concept in the Mindful Finance methodology is the Mindful Money Tree. It has applications across a number of the steps and is valuable in highlighting why we should be taking a more mindful approach to personal financial planning.
The Mindful Money Tree
The Mindful Money Tree represents your relationship with your finances
The trunk of the tree symbolises you and what makes you tick, an understanding of this fundamental to building a successful financial plan. The branches of the tree provide a structured method for assessing what your values are, and how they fit together to deliver a fulfilling lifestyle. Each branch represents a different aspect of your life, how you ‘show up’ in the word. By considering each in turn, and then the balance of all six branches, you can begin to develop a clearer picture of what a fulfilling life looks like. The fruit of the Mindful Money Tree is the ultimate goal, fulfilment across each of the branches. To grow this fruit, the tree needs sustenance in the form of money and other assets, but the money itself is not the goal. As the tree absorbs sustenance (money) through the root system it is filtered by your individual ‘mindset’. Your mindset around money has been cultivated over time by lived experiences and learned attitudes. Mindset will influence how money can and should be absorbed by the tree to grow its fruit. An individual who is risk averse and fearful as a result of past negative experiences, would benefit from a different financial structure to an individual who is comfortable around money, and with investment risk. There are no ‘right’ or ‘wrong’ mindsets, but they can be constructive or destructive and better understanding your mindset can be useful in improving outcomes.
Where does Financial Planning Fit In?
Understanding your Mindful Money Tree is critical to the success of any financial plan, but more traditional ‘financial planning’ is also necessary to ensure the right mix of sustenance for your Mindful Money Tree. Consider your Mindful Money Tree growing in its own individual Mindful Money Tree Pot (MMT Pot). Financial planning involves managing your MMT pot to ensure your Mindful Money Tree has the sustenance it needs to flourish. The MMT pot holds your liquid capital, accessible money that your Mindful Money Tree can absorb to grow and develop fruit. Over time, liquid capital is added to your MMT pot for example through your monthly salary, dividends, rental receipts, or other forms of income. Or from one-off windfalls such as a redundancy payout, inheritance, or lottery win. Accessible savings and investments sit inside your MMT pot, you can access them if you need to, to sustain your Mindful Money Tree, but things like property, business assets and pensions sit outside the pot. You may use assets from outside the pot to add income or capital sums to your pot at different points in time, for example you may receive regular rent from an investment property, take tax free cash and/or income from a pension when you reach retirement, or you may sell your business or a property to release a lump sum, but until that time those assets aren’t accessible in full. A Financial Planner’s role is to structure and manage your assets to enable your MMT pot to sustain your Mindful Money Tree over your lifetime, and potentially beyond, enabling you to live the life you desire. All our Mindful Finance consultants are Chartered Financial Planners, so the management of your MMT Pot comes as standard, but we also provide an extension of the traditional financial planning service to include a structured process for identifying your values and structuring your finances to enable you to live by them.
