So often our money conversations are black and white. How much do I have? Are my investments up or down? Do I have enough? But, enough for what? As financial advisors, we often challenge the traditional money conversation. We help to expand it beyond thinking in terms of return on investment, rather encouraging our clients to think in terms of “Return on Life”.
We must recognize that money is a means to an end. I love the way a friend of mine describes it:
“It is a material substance with a spiritual potential for fulfilling a purpose. We must first discover and clarify our meaning and purpose and then we will know with certainty the direction our money must take.”
STEVE SANDUSKI
How to think about money
He describes the two things needed to retire well:
- Enough purpose to wake up in the morning.
- Enough money to sleep at night.
Money can fund a purpose; it cannot find a purpose.
My challenge to you is to ask yourself: “What does this money represent to me?” Imagine you are ninety years old reflecting on the past forty years of your life. (Yes! Retirement and your “next chapter” could very well be forty years!) Describe your life in terms of:
- Your relationships with others
- Your physical and emotional well-being
- The fulfillment you feel from the “work” that you do
- Your service to others
- Your personal sense of security and financial well-being
If you feel as if you are not on track in any of these areas, it may be time to evaluate how you are utilizing your money and start funding your purpose.
measuring your return on life
A tool we often use with clients to help answer these questions is called the Return on Life (ROL) Index. It consists of 20 prompts that are grouped into three categories: Well-Being, Progress, and Freedom.
- Well-Being: measures your return on leisure, health, and relationships.
- Progress: measures your return on work, residence, achievement, and learning.
- Freedom: measures your return on purpose, autonomy, and security.
Based on your responses, the ROL Index creates a measure of your life satisfaction. The results will have a profound effect on how you think about your financial planning and your life.
