Four Things You Can Do With Your Money (2024)

This article was originally published in May 2015 with Mitch Anthony, president of Advisor Insights Inc. and Financial Life Planning Institute and author of The New Retirementality. It was updated to include a video about planning for the next phase of life. Watch it to begin thinking about how you might discover what’s next and pursue it with passion.

Our world is starving for a transformational approach to money that bridges our means with our sense of meaning. Gone are the days where a person takes a job for life, works hard and earns a good living, then retires in comfort and modest financial security. People are living longer and realizing that being a certain age need not preclude you from contributing to society. Today, men and women in their 60s, 70s, and beyond are still making an impact with their actions and their assets.

While many in our society chase the latest trend for realizing an incremental return on investment, those who invest in and on purpose are looking to utilize themselves and their resources in ways that will bring them a more substantial Return on Life™ (ROL).

Can I have a fulfilling retirement?

Here are some questions to ask when seeking a more fruitful ROL harvest from your money:

1. How much is enough?
2. If I had all I ever needed, what would I do differently?
3. How can I use my surplus to bring more joy into my life (and the lives of others)?

Watch our video to begin thinking about how you might discover what’s next and pursue it with passion.

How much is enough?

A bit more than you think if you factor in the potential for longevity and inflation rates over time. But this question is most appropriate for those who have diminished debt, reduced living expenses, and more coming in each month than they spend. Why build bigger and broader storehouses, only to have them go to other parties when you pass away? There are only four things we can do with our money:

1. Owe it (taxes, debt)
2. Grow it (investments, savings)
3. Live with it (monthly expenses)
4. Give with it (causes and charities)

If I had all I ever needed, what would I do differently?

Every so often we read the story of a lottery winner who goes back to his or her job on Monday. Why? Because for many of us, there is more to work than just collecting a paycheck. It’s the value we bring to our work. It’s the good we do. It’s the sense of relevance that work brings to our lives that matters more. Let’s not be fooled into thinking that money can bring lasting relevance, meaning, or purpose.

How can I use my surplus to bring more joy into my life?

It’s more important to have goals to look forward to than to have balance sheets to read. Abundance with goals helps you make your share of difference in the world. This kind of thinking is a cornerstone of the life lived with and invested on purpose. Seeking abundance without goals robs us of joy and has the potential to open our lives to anxiety, parsimony, and cynicism.

Life’s two great anxieties: health and money

If your doctor told you that you have a chronic disease, you probably wouldn’t sleep well tonight. That’s anxiety, brought on by a lack of confidence or clarity about the future. Health is one of the two greatest anxieties in life. Money is the other. Most people know that basic financial knowledge and actions like regular saving, managing expenses, prudent use of debt, and living within your means, can help provide financial security. But anxiety and uncertainty keep many from setting goals and making plans. They become easily distracted by hype and the latest investment fads.

Studies have shown that having a plan for accomplishing a goal makes it more likely that the goal will be reached. Writing down the desired outcome and then measuring progress on a periodic basis can reduce money anxiety significantly.

Beat money anxiety with goals-based investing

You and your family can benefit from asset/liability management, the disciplined process used by institutional investors, to reduce money anxiety and improve daily life. The process requires setting goals: lifestyle goals (i.e., values, work/life balance, travel), family goals, retirement goals, legacy goals (your ROL). Once these are established, the cost to achieve your ideal lifestyle can be quantified and turned into the ROI targets you will need to accomplish your dreams.

By providing comprehensive planning solutions, a skilled wealth advisor can help you discover a quantifiable ROL, calculate the ROI required to fund it, and then design a wealth plan to increase the likelihood that both the ROL and the ROI can be accomplished. To achieve your vision, you need to be an investor, not a speculator chasing an arbitrary benchmark (like the S&P 500) that has little to do with what you want out of life.

By quantifying your goals (i.e., retirement, income, charities) as future liabilities, it’s possible to design investment solutions that improve the probability of successfully meeting those liabilities.

Where can you sow your wealth for the greatest return of joy?

This is a question to embrace as we move forward on the path of investing in and on purpose. One thing we know for sure — having met so many people who are extracting a great Return on Life — is that being a person with substance and a person of substance need not be mutually exclusive.