Return on life

I stumbled across an interesting blog the other day. It was written by an early retiree, who gave up work at the age of 52 when he realised he had ‘enough’ – enough money, that is, to be financially independent without the need to earn a wage.

He wrote: “I thought I knew exactly what retirement would be like. Many of the expectations I had did come true, but there were several surprises as well.” He went on to list those surprises:

Mondays became the best day of the week

Having dreaded the start of the week when working, Monday became his favourite day, simply because it heralded the beginning of five days of peace and quiet. “Everything is less busy because everyone is at work”

My colleagues can’t accept I’m retired

“There’s a whole host of reactions you get when you retire early. Most of them are quite comical because people are literally stunned.”

I’m busier than ever

“The difference is that I went from doing the things I had to do, to doing things I want to do – which makes all the difference in the world.”

I’m in the best physical shape of my life …

“…thanks to a combination of having the time to exercise more, a lack of stress and eating better from being at home more.”

I’ve become very comfortable wearing casual clothes

“But what do I care? I don’t have anyone to impress.”

My family relationships are much better

“I assumed retirement would give me more time with family, but I didn’t know how meaningful and far-reaching this time would be. In addition to helping connect with family, being retired has allowed me to connect with friends.”

I’m learning and growing more than ever

“I’m interested in a lot of things, and now I have the time to learn about them. The amount and diversity of learning has surprised me.”

I can’t go back to work any more

“I’ve eased into my new normal and I love it”

The stress is gone

I’ve turned into a morning person

“I’m getting up to do things I want to do. My kids think I’m crazy – ‘Why do you get up so early?’ they ask – but that’s what happens when you are excited about life.”

Wow. That last comment, particularly, resonated with me. Obviously, everyone’s circumstances are different, but what enabled this blogger to make the life-changing decision to give up work was his ability to identify that he had enough money. He was not able to do this by simply picking a random number that sounded about right, but by understanding how he wished to live his life and how much money he required to support that life.

Taking stock

A good starting point for any purposeful financial planning exercise involves giving consideration to questions such as:

• What do you truly want out of life?
• What’s important about money to you?
• What do you want to achieve between now and the day you die?
• What would need to happen for you to stop doing what you no longer enjoy?
• What would need to happen for you to start doing more of the things you love?
• What gives your life meaning and purpose?
• What needs to happen to secure your family’s future, so they never have to worry about running out of money?

Most people skip this first important step. People want to know what to invest in before thinking through what they are investing for. Without a deep understanding of the ‘why’, it’s pretty difficult to figure out the ‘what’, or to know ‘where’ to put your money. So what most people need from financial advice is help to get from where they are to where they would like to be with as little stress as possible.

Money, in itself, is not an end – it is just a facilitator. Once you understand that the issue is not about money per se – but about how you use money – you can then appreciate that financial planning is not about getting a return on investment, but rather a return on life. It’s helping you achieve the best life possible with the money you have.

Choice, freedom and security

I regularly meet with people who retire with sufficient means, but very little meaning. Growing old with lots of money should not be the goal. Dying rich can’t compete with living rich and making a living doesn’t measure up to making a life.

But this is not just about retiring – it is about choice, freedom and security. It is about working full-time or part-time; flying short haul or long-haul; starting a family or travelling around the world; buying a fancy sports car or making a significant contribution to charity. It’s about you feeling fulfilled and having a purpose.

It’s also about you being happy and happiness is not necessarily about money; it’s about your values and your goals. Working out the ‘why’ is the first step to building a future that fits your dreams and gives you your return on life.