When you think of financial planning, chances are you think of retirement savings, investing in the stock market, preparing taxes, and so on—all relatively dull subjects—which makes it hard to differentiate a financially-geared podcast among a sea of entertaining shows. I mean, I would rather listen to presidential hopeful and award-winning music aficionado, Kanye West, chat with Joe Rogan for two hours.
That’s why, this week, I am hopeful that a glimpse into the more enjoyable side of financial planning may help the Mind of a Millionaire podcast compete against the entertainment-forward podcasts. I call it: living your rich life.
THE FINANCIAL BASICS
[2:49] If you listen to the Mind of a Millionaire podcast or work with us at Denver Wealth Management, you probably have your financial bases covered. You have paid off your debt, established a sufficient cash reserve, actively save at least 15% of your income for retirement, minimize taxes, and regularly update your estate plan. Now what?
A quick side note: to all investors, updating your estate plan is a key when it comes to long-term financial planning. It doesn’t matter your income or current net worth—everyone should establish a will and beneficiaries at the very least. If you would like to learn more about getting started with estate planning, watch our live-streamed webinar on November 12th or call our office at (303) 261-8015.
Alright, back to the blog.
LIVE YOUR RICH LIFE
[3:46] Say your 35, 45, or 55 (whatever age) and hammering away at your financial plan. You have your affairs in order: you’re attacking your retirement savings, you’ve updated your estate plan, and you’re well on-track to address your financial future. You’ve worked hard to ensure a sound financial future.
Now, it may be time to think about what makes you happiest in your life and contribute more resources—time, money, and energy—to that. For many people, that’s travel. I grew up in the mid-west, far from any city centers, major sports teams, and large-scale entertainment as a whole. The most renowned concert to ever reach my small town was the fifth iteration of the Beach Boys Revival Tour. If your childhood was similar to mine, experiencing other cultures around the world might be intriguing.
For some, traveling may not add joy to your life. Take some time, sit down by yourself, with your family, or with your spouse, and determine what will add the most utility to your current situation.
You have spent significant time and practiced strict self-discipline for the majority of your life. Perhaps you have passed upon numerous once-in-a-lifetime opportunities for monetary or professional reasons. If so, you’ve earned the chance to splurge. Seriously—you’ve earned it.
NOT ONLY CAN YOU DO IT; YOU SHOULD DO IT
[6:14] As mentioned just previously, you deserve it. That’s not to say you should blow money on six-figure sports cars or over-the-top extravagant vacations. Once you decide upon the item or event that will bring you the most joy in life, then decide on how much more you can allocate to that.
We are fortunate here in Denver to have the Rocky Mountains in our backyard. I love to mountain bike. Taking that carbon-fiber bull by the horns and ripping through some of our local trails increases my happiness substantially. Therefore, I felt comfortable upgrading to a more superior, more costly mountain bike last year.
However, I didn’t choose the $10,000 bike (yes, mountain bikes can come with a hefty price tag). Nor did I choose the $1,000 bike—it didn’t suffice. I landed right in the middle.
Perhaps you like to ski. Each ski season, you rack up triple-digit days on the slopes. It’s not wrong to own a pair of powder skis and park skis and backcountry skis and groomer skis.
In my experience as an advisor, clients who make that decision to spend a little more on their passions are happier overall.
COVID-19 PROVED TIME IS LIMITED
[10:56] Our hearts are heavy for those who lost loved ones during this trying pandemic. Frankly, it’s a prime example that we can’t take a moment for granted.
This year, folks canceled vacations, postponed weddings, forwent time with family and friends. Concert venues heard no music; restaurants served less food; bars celebrated less sporting victories.
If you have spent your life working and saving and investing for retirement, it may be time to enjoy some of the fruits of your labor—and that’s OK! If you’ve been saving 30% year-over-year for post-career plans, perhaps you can afford to cut back to 27% and splurge on a family vacation. Or, maybe you use that 3% toward front-row tickets the next time your favorite band is in town. Who knows if your favorite band will ever return to Red Rocks.
A QUICK WRAP-UP
See? Financial planning can be exciting. You spend your entire life planning and preparing; eventually comes the time to start living the life you have earned.
If you’re on the right track toward your long-term retirement needs—you have no debt, you’ve built up at least six months worth of expenses in an emergency fund, you’re saving at least 15% for retirement (preferably more), and your estate plan is in order—it may be time to live your rich life.
You’ve worked hard. You’ve been financially disciplined. You’ve practiced frugality. You’ve earned it.
If you have any questions regarding your current situation or long-term plan, please don’t hesitate to call our office at (303) 261-8015 or email me at email@example.com.
If you are not currently working with a financial advisor and want to address your long-term needs, let’s discuss what that entails. Call our office to schedule a free consultation.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
All investing includes risk including the possible loss of principal. No strategy assures success or protects against loss.
This information is not intended to be a substitute for individualized tax or legal advice. We suggest that you discuss your specific situation with your tax or legal advisor.