Our pioneers did not conceive of this profession in a vacuum. Neither were they omniscient or capable of seeing all that was implied by their creation. In 1970, the world was in financial flux. In particular, the United States was beginning to see the power of the baby boomers and the potentially unsustainable costs of Social Security and defined benefit plans. Moreover, the power of money and the money forces were starting to manifest. The succeeding decade brought unimaginable inflation, high tax rates, tax shelters, a horrific stock market crash, a housing boom, an oil crisis, a crowded job market and a jettisoned gold standard. Combine various forms of political crisis, including scandal, vice presidential and presidential resignations, an unelected president, social upheaval, the end of the Vietnam War and the realities of various "liberation" movements, and we had quite the time. There were no computers as we have today. (The IBM Mag Card Selectric typewriter doesn't don't count.) There were three established television networks with an effective stranglehold on televised news. TBS and PBS were just getting started, but there was no MTV or ESPN. It was within this cauldron that financial planning was generated.
I am frequently asked what I mean by the "money forces." By that I mean the fact of money itself and its role in 20th and 21st century life. I mean this uniquely human artifact of reciprocity and exchange that generates extraordinary forces with both positive and negative consequences and implications. Think of water, which is so necessary to all forms of life. Yet water destroys, rots and kills. It can convey poisons and diseases. Or think of fire. Fire is necessary for our food and physical comfort. Manufacturing industries require it. Life as we know it would be impossible without fire. Yet there is nothing more lethal when it is out of control. Air gives life as earth provides stability, yet we have seen the collective destructive powers of avalanches and earthquakes, hurricanes and tsunamis, tornadoes and forest fires. Life could not work without earth, fire, water and air. Human life at current volumes cannot work without money.
These metaphors are apt descriptors of money and its implications. And they start to frame the importance of our work. The money forces were potent when our profession was founded, but they were not as evident. They have become increasingly potent and evident with the passage of time.
Since World War II we have watched populations become urbanized. Money enables urbanization. It is useful to look at Wikipedia under "Urbanization: Causes" to get a sense of the money forces at work. It describes the money-based motivations for choices of residence, business and vocation and access to culture in some detail.
Think both historically and futuristically. Most likely, we are still too close to see the changes in America, grounded in that combination of depression and war, but we are not blind to the obvious. Primarily since World War II, money has generated powerful forces with extraordinary implications for human beings. Before the war, money was not such an essential aspect of daily life. Most folks worked in some form of extraction industry: agriculture, ranching, logging, fishing, mining or drilling. They did not commute to the office every day. Their retirement plans were in their backyard. We accepted death and disability as an inevitable personal problem. If someone aged without assets, relatives or social capital, that, too, was a personal problem.
This is not our world. In our world, agriculture employs less than 2% of the population, down from 41% in 1900, 21.5% in 1930, 16% in 1945 and 4% in 1970, according to the U.S. Department of Agriculture Economic Research Service. Agriculture is not just an occupation, it is a way of life. Communities were overhauled by this massive demographic shift. The men were transported to the city and to their jobs mostly in their own automobiles. Then women were. Children no longer had daily access to their parents; childcare was professionalized. The implications are huge.
Money is central to this. People could not grow their own food; they had to buy it. They required access to massive public works projects for water, waste disposal and transport. With an expanding population, housing became vital and, with it, housing finance. Public schools, police and fire protection, parks and recreation and medical care were transformed from local hit-and-miss to money-based enterprises. This meant taxes and insurance.
In agricultural societies, family provides. Retirement plans and insurance policies are in backyards and offspring. Without family, accidents and illness are catastrophic, but there is nothing much to be done. In urban societies, food must be purchased. Moreover, individuals need extended periods of time where they are reliant upon unearned income for their daily bread. This means savings and investment. Meanwhile, insurance is accessible for money, and people want the best.
In this process, money has become the lifeblood of 21st century humanity. Throughout the world, money has become humanity's most powerful and pervasive secular force. Money skills are 21st century survival skills that do not come naturally to human beings. To the contrary, human beings are often financially self-destructive. To deal, folks need the financial planning profession.
Accordingly, I see a profession that has emerged with the mission of helping individuals and families relate to money and the awesome forces that it generates. This mission is vital and profound. It is worthy of an authentic profession.