The Equation

The Equation

May 08, 2023

Let me say right out of the gate, this isn’t an article about algebra or anything of the sort. While I do love math, this is a topic I hold dearer and one I increasingly have thought about over the last number of years. It wasn’t until recently, and the decline in health of a cherished client and friend, that I felt inspired to write about it. It’s important to talk about financial planning and the various strategies we work on with all of you to ongoingly strive and solve. However, at the end of the day, the goal we wish to help you with the most rises above the technical aspects of our relationship and lands in that of our advocacy. And while what we do for a living will always be housed in the financial, our overriding ambition isn’t in just helping you plan for your net worth, but also in helping you plan for, what we would call, your net fulfillment.

Life is busy and especially today. With all the technology and ways to connect, it’s easy to feel overstimulated. Calls, texts, notifications, and emails can bombard us. Many times, this over-connectedness leads us to a life on autopilot. How often do we just get through our days of work and other daily tasks without much thought or awareness of the more important things? It’s here where I’m going to challenge you to be mindful and make the attempt to get off autopilot. We all get to live this life just once, therefore I am going to ask you now to start thinking of your resources of time, money, and health, and to challenge you to allocate them appropriately. Let me explain.

For decades, financial planning and wealth management has been completely centered around growing wealth. Whether it’s in conversations or meetings detailing asset summaries and net worth statements, the goal has always been to see that number at the bottom of the page get larger. There’s nothing wrong with that thinking, and I know the feeling of seeing that hard work translated to your assets growing is a very gratifying sight. That said, the challenge isn’t in changing our goal from building our net worth, but rather how and when to better enjoy the fruits of it. Wealth isn’t about money; it’s about options. However, the utility of money follows a curve for everyone. Or, said differently, you only have options with your wealth if you have the time and health to pursue them.

Time, health and money. Those are the pieces of this equation. We all use money as a conduit between our time and our health. For example, you’ll only be this age and in your current health for a short period of time. What would you like to do? At what point do those activities become less enjoyable or harder for you to do? This can be useful in planning those activities and time frames. When you start to think in terms of time, I believe it changes your perspective and puts you closer to your values. Knowing that, what experiences do you want to have this year with family, friends, certain activities or adventurous travel? If there are some of those activities that’d be better enjoyed in your current health, perhaps it’d be prudent to pull those adventures or activities forward in time and push out into the future some of your other pursuits or goals. Recently, I was having a discussion with clients on this very topic. They shared that one of their main goals is to visit and hike several National parks. Through those discussions, we placed an emphasis on pulling some of those trips forward in their planning timeline while they felt they’d still have the desire and ability to enjoy these more strenuous activities. While they also like concerts, the theatre and boating, they decided they’ll be able to continue to enjoy those out into the future, even as their health may diminish.

This thinking need not only apply to personal activities but also to our desires on giving. Perhaps a child, family member, friend or organization could better use your gift now versus in the future. It’s been shown the positive, emotional feelings we experience when making a gift are strong. While this can be secondary to making the gift itself, wouldn’t it be nice to see that gift used for its purpose now? Again, the utility of that money given today may be better used than decades from now through your estate planning.

Warren Buffett is perhaps one of the most famous billionaires on the planet. There’s no doubt, his investment success is legendary. But in a study conducted just a few years ago, very few young people asked said they would trade places with him. Even when it meant that young person would then have all his monetary wealth. Perhaps not surprisingly, when asked why they wouldn’t trade places, it overwhelmingly came down to one answer; his age. The young participants shared that while it may be nice to have his monetary wealth, at his current age, there was little time or remaining health to enjoy the experiences that could come with it. I think this further details the power of time and enjoying those experiences while in good health.

In closing, I’ll pose the question: Are you striving for net worth or net fulfillment? I believe it’s time to add this important perspective to our planning. We’ve said for years, our goal in working with clients isn’t just about money or building net worth for the sake of it. Rather, it’s in helping you to plan for and live out a better life. From the thoughts shared above, I submit it’s worthwhile to look at the terms of the equation above and start thinking about the allocation between your remaining time, health and money. I encourage you to look at your life’s goals that are ahead and decide which of those goals would be better enjoyed now or in the near future while you have both the desire and physical abilities to do them. For whatever reason, if you have been putting them off, I urge you not to do so any longer. Let’s help you try to avoid those regrets. As always, if myself or a member of our team can either help start or continue this conversation, please be sure to let us know. Until next time, here’s to the pursuit of living a better life!