Money is not an end in itself but the means to an end. The hardest part of financial planning is usually uncovering your true goals and priorities in life. These are the ends to which your money is a means. This is the fundamental concept upon which I base my thinking on personal finances. Coincidentally it was a fundamental principle of the philosopher Immanuel Kant's moral philosophy that people should be treated as ends in themselves rather than as a means to an end so I consider myself in fairly good company.

The trouble is that most people don't really know what they want from life. They haven't thought about issues like this with any kind of discipline or rigour. This could lead to aimless and wandering career paths, misplaced investment strategies and missed opportunities. Ultimately, a lack of planning can lead to a lack of achievement in all areas of your life. This is why modern financial planners will often describe themselves as 'life coaches'. Personally, I can't bring myself to use this term - even if it has some truth in it!

There are some tools you can use to help you establish your goals. They all revolve around putting things in context and perspective.

There are many ways to put things in perspective. For some of us looking up at the stars or just standing in an awesome landscape will trigger this thought process. But for absolutely everybody I have met in life so far one thing focuses the mind like no other: considering your own death.

There are many proponents of this exercise but one of the most famous is a guy called George Kinder. He has written several books on Life Planning and he superb at selling his own brand of financial planning which has a pretty heavy spiritual element. Although he is a great story teller this style feels false to me and is a turn off. You can read about him here if you like.

So anyway the point is really to imagine your own death being imminent and to consider what regrets you would have. What do you wish you had done with your life. A good financial planner will help you go through this exercise or something similar. It's one of the most powerful techniques for cutting through the crap to what you are really about.

I don't know any particular US planners but the UK (which has lagged behind the US somewhat in terms of financial planning) is starting to gain more proper planners.  There's a chap called Denis Hall who runs a firm called Yellow Tail.  I saw him speak once and I liked him.  He has a blog which is not too bad.  There's another decent planner called Mel Kenny who writes a blog and is often quoted in the media saying things that I mostly agree with.  I know some other good planners but they don't appear to have blogs for me to link to - missing a trick.

Alain de Botton wrote an excellent book, Status Anxiety, which illuminates the fact that pondering death focuses us on what to do with our lives. The old cliche you can't take it with you is useful here. Money for money's sake is empty. We should live our lives for the things that we enjoy and that are important to us.

Following on from this with a cynical eye - why not just earn as much money as you possibly can then do whatever you like? After all, you can never have too much. There are at least two treacherous financial planning errors here. On top of that there is a moral dilemma that wealth brings with it.

Financial planning error 1: If you don't work out what your goals are and how much they cost how will you know when to stop working like a dog and start enjoying life to the full? Blindly earning as much as you can is just like powering on into the void without a plan. Maybe you could be improving your life right now? Taking the time to stop and think is almost always worthwhile.

Financial planning error 2: If you don't know how much money you need and when you need it you can't work out how much risk you need to take to achieve those goals. The idea of just maximising profit in any exercise also will have a tendency to give you too much risk. Too much risk can leave you with losses you find intolerable. Instead, a good financial plan will take only as much risk as you need to take and are comfortable with in order to achieve your objectives. That is critical. If you can achieve your goals why take further risk? Good financial planners will use a risk profiling tool. The best I have come across is Finametrica. I've met the guys who designed it, built it and still run the company and they are trustworthy, erudite and genuinely nice people. Also, their tool is fantastic. There is a version of it that you can try for yourself myrisktolerance.com but of course it's better to discuss the results with your financial planner. Risk is really interesting but this page is about death so I'll leave it there for now!

Ok the moral dilemma - if you have all you need why are you still gathering more?  With a finite supply of pretty much everything on the planet those who take more than they need to satisfy their life goals are just denying others their chance.  Look at the super wealthy and how they tend in the end to do charitable work of some sort - something in us recognises that giving back makes our lives better somehow.