You only live once, make sure you live well
"If I only have one life, let me live it as a blond" - 1960s hair colouring advertisement
Most people are unaware that both childhood and old age are relatively recent inventions. Right up to the Victorian age, children quickly progressed from being babies to being young adults, sent out to work when they were 6 -7 years old to sweep chimneys and do other hard and dangerous jobs. It was not until the growing complexity of the 19th and 20th centuries forced the need for more than a basic education that children were allowed a childhood. We even had to invent a new name for a category of older children who were not yet adults. We called them teenagers.
Until the second half of the 20th century, life after work was not a luxury that many could indulge in either. Average life expectancy less than 30 years in medieval Britain was. At the beginning of the 2oth century, 400 years later, things had not changed that much. Only 50% of people born in 1900 actually reached the age of 50. Those lucky enough to survive retired from work at age 60 sat on the porch in their rocking chairs for a few years and quietly fell off the twig.
For those of us fortunate enough to live in developed countries, modern medicine and better nutrition have extended our lives to the extent that we can look forward to a second lifetime after 40 - 50 years in our original job. (50 years ago, for example, a blood clot was a death sentence. Today it can be repaired in half an hour by inserting a stent in the blood vessel under light anaesthetic).ÿ So we had to invent yet another new word for these long-lived people who no longer worked: Retirees.
Australians currently have the second highest life expectancy in the world at 80.4 years (Australia's Health 2008), but what's the point of living longer unless you do something enjoyable and worthwhile with that extra 15-20 years? That is the crux, is it not? When the time comes to take your final bow, will you do so with a sense of happiness and fulfilment, or on a note of regret for opportunities missed and things left undone?
If you are a high net worth individual reading this, you are probably a baby boomer born around 1950. Younger generations (X, Y and Z) accuse baby boomers in their 50s and 60s of being self centred, selfish and greedy. Yet the truth is that Australian baby boomers are the first generationÿ not only to enjoy a longer life expectancy (without the risk of being sacrificed inÿ war), but also toÿ have the money and assets to make different decisions about the last decades of their lives. In fact, there have never been more high net worth individuals in Australia than there are today.
The problem is that many of the baby boomers, who can now make decisions about the future their parents could never make, are making bad decisions, or not making decisions at all. This could be the reason why so many sea- and tree-changers set off for the beach or the bush with high hopes but return to the city disappointed. Maybe they all knew what they didn't want, the lives they were living before, but they didn't really know what they wanted to replace them with.
Consider the average person's thinking (or non-thinking) about superannuation, for example. Most people never get beyond calculating how much capital they need to accumulate in order to keep on paying for the same lifestyle they have now. But do they want the same lifestyle they have now? At the same time, many financial advisers go on about superannuation as if it is the one and only investment goal in life. In fact, there is life before, during and after retirement and these three stages might be quite different. For instance, you might retire from your first career and start a second before you eventually decide to put your feet up.
For most people these kinds of ambitions may not be financially possible, but for high net worth individuals like yourself, many things are possible, even the most unconventional dreams and ambitions. A story in the New York Times earlier this year reported that the chairman of a German company gave up everything to become a Sadhu, or seeker of enlightenment and now wanders around India stark naked except for a holy thread around his waist, covered in ash and carrying only two possessions, a walking staff and a begging bowl. Not everyone's dream, perhaps, but he is happily doing what he wants to do.
"Non, je ne regrette rien - No, I regret nothing" - Edith Piaf, singer
Of course, the meaning of life is a very personal question that every individual has to work out for themselves, but you actually have the potential to accumulate enough capital to make just about anything possible. It is therefore extremely important to take a long hard look at yourself and decide what you truly want out of life. How much flexibility do you need? What do you really want to achieve compared to what you have achieved already? What would make you feel fulfilled and happy? You might not know the answers right at this moment, but just thinking about the questions could help to redefine your personal goals and broaden your investment horizons to meet them.
For a start, some things may not be worth putting off until retirement. If your ambition is to climb the ancient Inca pyramids of Michu Pichu in the South American Andes, you may be better able to survive the strain of high energy, high altitude climbing in your 50s than in your 70s. How badly do you want to do certain things, and how do you balance increased leisure to do them vs. advancing age and physical limitations? And can you afford to take the time off to do them without suffering financially as you get older?
And considering everything you have achieved to date, how more satisfaction can you accumulate if you simply keep on doing the same thing for another decade or two? Do you have important things left undone which are outside your mainstream career? And even if you are not yet ready to retire, could you have more fun and keep on making a contribution to the management of your business or the exercise ofÿ your professional practice by transitioning to a part time working week that would take the pressure off you and make some room for your other interests? Even just doing what you do in another context can transform your life. Fred Hollows had been a successful eye surgeon for years before he turned his attention to curing blindness in third world countries at a miniscule cost of $50 per cataract operation.
This year, Microsoft founder Bill Gates, who has been supporting medical and development charities in third world countries for many years, quit his day to day job at Microsoft to devote himself full time to his charitable foundation. Two of his many projects include finding a cure for river blindness disease in West Africa and helping to prevent the spread of AIDS in Papa New Guinea. Closer to home, Brian Sherman, one of Australia's most successful professional fund managers, now devotes most of his time and energy to running an animal rights charity with his daughter.
Sometimes it is difficult to think your way past day to day or short-term problems in order to look at the big picture of your life. This is why it is important to re-define and review your goals with a trusted financial adviser who will encourage you to think outside the square. Before you can have a financial plan, you have to have a financial goal - and it has to be a goal that's about your quality of your life in the future, not just an end amount of dollars.
Just as a personal trainer who understands the theory and practice of fitness, considers your individual needs and actually motivates you to put on your joggers every day, a good financial adviser can make a lot of difference to your life by acting as a personal wealth trainer for investment success. A fitness trainer can make all the difference to your health and waistline just as an effective personal wealth trainer can introduce you to a disciplined wealth regime.
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