Money Trailguide, No. 7

2022 is off to a roaring start.  With Omicron hogging the headlines, it’s hard to think about much else.  But let’s try…between the reading list and article on the concept of maximizing your Return on Life, use this as encouragement to make 2022 your best rotation around the sun yet.

Included this month are:

  • Quick hits…What I’m Reading
  • Are You Getting Your Best Return on Life?

Scroll to learn more

Joshua E. Self, CLU, ChFC, CFP®

Managing Partner

Quick Hits…What I’m Reading

  • The Road Less Traveled – M. Scott Peck….this is such a timeless review on the integrated human experience around self discipline, love, and grace.  It was recommended to me not long ago but set in my stack of books until the holidays.  I have chewed through it pretty quickly since.
  • An Astronauts Guide to Life on Earth – Colonel Chris Hadfield…apparently this dude, who I had never heard of before a friend gave me this book a few weeks ago, has logged over 4000 hours in space.  I’m just getting started on this one but like the idea of focusing on preparation (for the worst) and still enjoying every minute that life has to offer.
  • Series I Savings Bonds –…US Treasury Series I bonds paying 7.12%…need I say more?  This article gets in to the weeds and buying I Bonds has some downsides (ie, must hold for at least 1 year), but worth discussing.

Are You Getting Your Best Return on Life?

When it comes to investing, the current standard of return on investment (ROI) can be self-limiting, adding pressure that is counterproductive. So much of ROI is not within our control. We can diversify investments––always a good strategy––but we cannot control how the markets perform or how global events affect the markets. Just as meteorologists can predict the weather but still be wrong, we can try to predict and plan for market upheavals, but we cannot control them.

Any goal-planning expert will tell you that you must measure what matters. So, if Return on Investment is how we measure our investment goals, then how do we measure our life goals?  Perhaps a measurement around progress towards our values would be better suited.  Really, we are talking about measuring our Return on Life (ROL) rather than focusing on our Return on Investment (ROI).  ROL is defined as, ‘How well you are doing in living the life you want, with the money you have.”  I am not suggesting that one is more important than the other, but I am suggesting that you are missing a key piece to your life contentment puzzle by only focusing on ROI.

Here are some key ROL indicators:

  • Living well within your means
  • Investing time, energy, and resources in people and engagements that energize you
  • Allowing yourself to have experiences and fulfillment whenever possible
  • Not comparing yourself to others who may live with a different set of circumstances
  • Living purposefully
  • Not allowing your identity to be defined by numbers

Since money is a vessel that can help you navigate where you want to go in life, it is important to control your money, instead of letting your money control you. When you focus on ROL, your investments serve you, not vice versa. Too many people feel as if life is little more than “getting ahead” of someone else’s definition of what a successful life ought to be.

The best financial conversation you will ever have is to ask yourself, “Who and what really makes me happy in life?” and then arrange your finances to keep those people and experiences front and center in your life.

Too often, when it comes to our financial lives, we don’t look at the big picture. Instead, we move pieces around by replacing investments, insurance policies, debts, purchases, and the like––all the while paying too little attention to long-term and holistic perspectives.

You may have been told that every money issue should and can be solved through a formula: “Let’s take your age, the amount of money in your portfolio, run some calculations, and presto! Here’s the answer for your life.” With this approach––and if that number is out of your reach––your future can become a self-fulfilling prophecy.

How can you balance the books between quantitative and qualitative factors in developing a financial plan? By focusing on ROL––and ensuring you pay as much attention to your non-financial goals as your financial ones.

More on the ROL topic next month.

PLC Wealth Management, LLC (“PLCW”) is a state registered investment adviser located in Raleigh, NC. PLCW is registered in the state of North Carolina and in compliance with the current registration requirements of the states in which PLCW maintains clients. PLCW may only transact business in those states in which it is registered, or qualifies for an exemption or exclusion from registration requirements.