This might be the best advice I have ever given. To be clear, it’s not the best financial advice but it’s not meant to be. This one is about living life. I see this more than you’d think from very wealthy people concerned about spending money in retirement.
Early on in my career I saw many people who worked so hard to build their future. I saw a few couples who sold their business for millions of dollars to retire only for one of them to die within 12 months. Their dreams and plans for the next phase of their lives turned upside down and all the things they were going to do together were never going to be done
What was all that work for? The future they worked so hard for over decades didn’t exist. So, what was the point? It made me more determined than ever to both succeed and enjoy life along the way. It also heavily influenced my views on how to spend money during both your working years and in retirement.
In my younger years, I was more focused on achieving outcomes. I’d reach a goal and instantly move on to the next one. But as I get older, I realise that it’s the process every day as you work towards your goals is what life is all about. The journey is more important than the destination. That journey includes all the simple things in life such as a family meal together or a walk on the beach, but it also includes the bigger ticket items we tend to put off for too long.
But the same applies once we are older too. If you’re 70 you might have 10–15 years of good health left if you are lucky. That’s often the time when you can still travel and do all the things you want to do in life, but it gets more difficult as you get older. Who knows when our time is up too, so there’s no point in waiting to do things, get on with it and do them.
Part of the issue here is that once people have sold their business and retired, regardless of their level of wealth, they become more conscious that the amount of money they have is what they have for the rest of their life. That can make it especially daunting to dip into your capital in the name of fun or living life. But outside of leaving an inheritance, what else is it for? What were all the years of blood, sweat and tears for?
I’m not suggesting people become frivolous spendthrifts, but I am suggesting that it’s worth crunching the numbers, whatever your financial position, to understand the balance between frugality and living a fulfilled life. Of course, success and happiness are different for everyone and only you know what that means for you and your family. But what I do know for sure is that our time on this earth is limited, and our time with our loved ones is even more limited.
When I hear people in retirement questioning whether they should dip into their capital for a regular overseas holiday, I take the view that there is no better time than now. We don’t get healthier as we get older. I see it as money well spent. So, buy the tickets and see the show, take the overseas trip because it might just create some of the greatest times and best memories of your life.
General Advice Disclaimer: This information is of a general nature only and may not be relevant to your particular circumstances. The circumstances of each investor are different, and you should seek advice from an investment adviser who can consider if the strategies and products are right for you. Historical performance is often not a reliable indicator of future performance. You should not rely solely on historical performance to make investment decisions.