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Are You Getting the Best Return on Life?

Photo of author, Tyrone Phillippi, CFP®, CeFT®.
Tyrone Phillippi, CFP®, CeFT®
Director of Wealth Management and Regional Director

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––a great 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.

It’s important to balance return on investments with return on life (ROL). Return on life is defined as, "How well you are doing in living the life you want, with the money you have.”

Here are some key return on life 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 the engine 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 Return on life, 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.

Your values and principles with money are not the same as everyone else’s, nor should they be. The most important aspect to be derived from the numbers is to achieve the quality of life you desire. The numbers do not exist to drive life but to support it.

Because many people view retirement as purely an economic cliff from which they will jump once they’re in their 60s, they have done little — if any — work on all the life issues accompanying such a transition.

It is important that your life before and during retirement is both challenging and enjoyable. At some point, almost all of us will require help — meaning we’ll have to make contingency plans. These contingencies include long-term care insurance, in-home care, and the like. These investments are a natural part of return on life planning because they help you continue to live a full and balanced life as long as possible.

When you achieve balance — and as a result, true financial freedom — you will still be confronted with issues that organically arise with retirement. These issues include the following:

  • How you best spend your time and energy
  • How you address your personal health and well-being
  • How you continue to challenge yourself
  • The role you play in your parents’ and/or children’s futures
  • The kind of legacy you want to leave
  • Your definition of success

It is important to understand the impact of money on every area of your life, and every transition in life. By engaging in a financial planning process focusing on what’s happening in your life — adjusted financially to facilitate those happenings — you will reach the ultimate goal of using your money to create a better life.

Your McKinley Carter team is focused on helping you live your best life. We are honored to have this opportunity to LifePlan with you.

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