There’s a lot of sound financial advice out there that you’d be wise to follow, like the importance of living within your means, managing risk, and creating an emergency fund. But if I could pick only one piece of financial advice to give you, it would be this: Don’t base your happiness on the balance in your bank account.
The Money & Happiness Equation
In other words, money can’t buy happiness, but what you do with your money can. Money is a vehicle to get you where you want to go, but it’s not the whole picture. Yes, it’s important to save, plan ahead, and grow your wealth, but if your level of happiness in life or with your financial advisor is based on how well your portfolio is doing, you will never be content.
Since so much of life is unpredictable, our human nature is wired to always want more, to never feel secure. So how can you use your money in a way that is prudent but also brings you increased satisfaction in life? Here are some ideas.
1. Know Your “Why”
When it comes to your finances, it’s important to understand how you view money and its purpose in your life. If you don’t cast a vision for your life, someone else’s vision will take over. Then you end up years down the road wondering why your life looks like it does. When you take the time to define what you want your life to look like, you can align your finances with your values and use your money in a way that brings happiness and keeps you from making decisions you regret.
Start by asking yourself a few key questions. What motivates you? What do you love? What are you passionate about? What do you want life to look like when you are 50 or 80? For example, do you really want that fancy car parked in your neighbor’s driveway, or is that what you think is expected of you? Don’t just try to keep up with the Joneses, but identify exactly why money is important to you and then map out a financial plan accordingly.
2. Invest In Experiences
What do you enjoy doing? What is it in life that fills you up and gets you excited about the future? When you only look at life through the lens of a calculator, you can forget what’s truly important.
With over two decades in financial services, I’ve seen many clients who have more than enough money saved for retirement hesitate about treating themselves to a nice vacation. When you just look at the money, you miss the intangible returns on investment of quality time with family or the joy of visiting a place you’ve always dreamed about.
The same goes for daily luxuries as well. If you have close to a full pension but are thinking about cutting your cable to save a few dollars, think about the enjoyment you get out of watching your favorite shows rather than the worry over your cable bill, which you can more than likely afford. It’s worth it to splurge within your budget in ways that bring your life more fulfillment.
3. Live Generously
We often think that spending money on ourselves will bring happiness. But in reality, one of the best ways to create fulfillment is to spend our money on others. Have you ever bought the perfect gift for someone and experienced joy at how much they appreciated it? It’s a win-win. Find ways to incorporate generosity in your life and reap the benefits of increased happiness!
4. Buy Time
Many people sacrifice valuable time to save a bit of money. But time may be more valuable to you. Try paying for a housekeeper, having your groceries delivered, or splurging on a direct flight instead of a cheaper indirect one so you can maximize the time you have to invest in what you love.
This goes for managing your money as well. There’s no doubt that juggling the many pieces of your financial life can be stressful and time-consuming. One way to use your money to give yourself more time and peace of mind is to find a financial advisor to simplify your financial life and take care of the details for you.
Use Your Money With Intention
Money is a means, not an end. It’s a tool that lets us enjoy the truly important things in life. Isn’t that why you want money in the first place, to build a fulfilling life and do what you love with those you love?
So how can you make sure your life values are reflected in your finances? Part of good planning is making sure you have the money you need to be financially independent so that when opportunities arise, you’ll be able to use your money well. If you are ready to define your why and align your financial plan with your values, call my office at (949) 221-8105 x 2128 or email me at michael.loo@lpl.com.
About Mike Loo
Mike Loo is an independent financial advisor with more than 20 years of experience in the financial services industry. His mission is to make a meaningful impact on the lives of clients and the people they care most about, help them make educated decisions with their money, and build a strong financial foundation for both themselves and their next generation. Mike is committed to meeting a high standard of excellence, taking the time to listen to clients’ needs, and designing strategies that aim to help clients save money and reduce debt. He seeks to fit a client’s investments into their life and educate them so they’ll understand their investments. To learn more about how Mike may be able to help, connect with him on LinkedIn, call his office at (949) 221-8105 x 2128, or email him at michael.loo@lpl.com.
Mike Loo is a registered representative for LPL Financial (LPL) and an Investment Advisor Representative (IAR) for Trilogy Capital (TC). Securities offered through LPL, Member FINRA/SIPC. Investment advisory services offered through TC, a Registered Investment Advisor. TC markets advisory services under the name of Trilogy Financial (TF), an affiliated but separate legal entity. TC and TF are separate entities from LPL.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.