“You need to spend more.”
This was the advice I gave to a client during her most recent Strategy & Tactics meeting. She looked at me puzzled, almost as if this wasn’t the advice she was expecting to receive from her financial advisor.
I explained, “You’re healthy, your family is taken care of, you have every need met, and your assets are growing faster than you can spend them. The biggest risk you are facing right now is the risk of regret, or that you get to the end of life asking too many questions of ‘What if?’”
What if I took that trip?
What if I didn’t work so much?
What if I helped my kids sooner?
When it comes to money and aging, the risk that is most commonly discussed is longevity risk or the risk of living too long and running out of money. This is definitely a major concern as people are living longer and the cost of living continues to rise (I wrote about this in my November column, Don’t Retire with Too Little).
But, for wealthy individuals – like her – this isn’t their risk.
They may behave like it is a risk, saving diligently and living frugally even until their final days. Yet, it may be that the greater risk is that they die with too much money. Said differently, they don’t live their one life to its full potential.
Of course, this isn’t validation to spend recklessly. If you do that then you would introduce longevity risk back into play. However, it may be worth spending boldly on the things in your life with the most upside or the greatest potential reward for you. And you have to be the one to figure out which things, experiences, people, and causes are going to give you the most reward.
Life experiences can be big or small, expensive or inexpensive, charitable or hedonistic. It’s your choice how you want to spend your scarcest resources: your health, your wealth, and your time.
And just like in investing, the best day to get started is today.
In closing, above are some pictures of my family on a recent cruise. The trip cost more than we (errr…I) wanted to spend, but the experience and the memories were worth every penny!
Hey, I’m Rob Edwards. Thanks for reading this month’s column.
As a nationally recognized advisor, I have one goal: To help clients make more thoughtful and intentional money decisions so that they can enjoy the best version of their life.
In working with high-net-worth families, I know that with more money and prosperity comes complexity and the potential for making mistakes.
So, whether you’re asking questions about saving for retirement, transitioning your business, or how your money can make the greatest impact, my team and I are here to help.
Rob Edwards
Managing Director
Senior PIM® Portfolio Manager
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