The goal of this week’s column is to show how closely linked your life is with your personal finances.
At first glance in our capitalistic society, life appears to be all about consumption. As the popular expression goes, the person who dies with the most toys wins.
Look more closely and you will see that life is about living in a way that truly reflects your values. Be the happy person who accomplishes what is most important to you. It is not about the toys but about family, friends and expressing your feelings.
One person who had considerable insight into how people reflect on their lives is Bronnie Ware. She spent years working in palliative care.
Bronnie listened to what her dying patients told her and wrote an internet blog titled The Top Five Regrets of the Dying, which was later turned into a book. This topic is of interest to many. Three million read her blog during the first year.
One of the five regrets that every male patient Bronnie nursed close to the end of their life, was wishing they had not worked so hard. They came from that generation when the principle breadwinners were men.
During their lives the almighty dollar seemed important. They happily jumped onto the treadmill of life; however, during their final days these men regretted spending so much time at work.
There are three areas to be considered when determining how your personal finances can enhance the quality of your life.
The starting point is to set an income target. This should be determined before considering an investment strategy. What income is needed to support your desired lifestyle?
Determine how much you need to earn versus how much you want or can earn. Consider the personal tradeoff between income and life and what is right for you. The same logic should be used when planning a career.
For many the income target is to earn as much as possible. This often results in an upgraded lifestyle where that extra cash earned is then needed to support the material expenses required to maintain that higher status.
Unfortunately, the pressure of a higher paying job often means there is not a lot of time or energy to enjoy the extras.
Second, be more demanding of your investments. There are many investors who work harder than their investments. They work long, rigorous hours while their investments are often neglected and as a result underperforming their potential.
A logical approach is to estimate an annual income requirement and then divide that income generation between your job and your investments. Both you and your investments are accountable.
The final consideration is to ensure your investment fees are fair. Getting good financial planning and investment advice will help you navigate your life’s priorities.
That financial advice you receive should be good and fairly priced. Overspending on mediocre advice is a waste of money and has no place in a well-planned life.
Our recommendation is that you lessen the intensity of your work pace if it is detracting from the quality of your life. If you are at the stage in life where you believe that hard work is your only solution then think again.
Bronnie Ware said that all of the men who were at the end of their lives regretted working so hard. It is very likely few of those same men thought about this during their working years.
Combine your life planning with your financial planning and live a life that allows you to reflect back on it with a smile.