Originally published in the News Star on Sunday, October 11, 2015
QUESTION: My parents ran a business together for years until my father’s death. After he was gone, Momma ran it by herself for years before she sold out. She was very savvy and unafraid of taking a smart risk. As she has gotten older it seems she doesn’t want to take even the littlest financial risk. I have no doubt this is costing her money, but I also know taking any risk makes her very nervous. What should I do?
ANSWER: Help your mother be as happy as possible, not as wealthy as possible. Sometimes those two are not the same thing.
My observation is that as people age physically, they also tend to age fiscally. Failure to understand and accept these twin realities can lead to much frustration and stress. Those who accept and (even better) anticipate the changes that come with physical and fiscal aging can experience a more peaceful transition as their lives change.
Here are a few thoughts on the similarities of physical and fiscal aging:
Aging is inevitable – we cannot avoid it. Avoiding the topic, lying about your age, midlife crisis purchases and quantity discounts on Botox are all coping mechanisms people use to avoid the reality that time marches on and carries us with it.
Understanding this truth is most useful before you experience it. It gives you time to prepare in a variety of ways (which leads to my next point…).
Aging is not equal – we can influence its impact. I’ve always been amazed at how many of us neglect our health in pursuit of more wealth, only to later spend all that wealth in hopes of recovering our health.
Most of the time, you can have a significant impact on the degree of your physical health in old age by what you do in young and middle age. You know the drill – diet, exercise, stress management and an overall healthy lifestyle. It’s not a recipe for never dying, but it can vastly improve the quality of your later years.
I’ve recommended to more than one client that they spend money each month on a nutritional consultant or a personal trainer. If your physical body is sick and broken down, how can you enjoy whatever wealth you’ve been able to accumulate?
Similarly, if you understand that your capacity to accept risk will very likely decline as you age (it happens, people), you can plan ahead to utilize strategies that guarantee your income and reduce your reliance on risk based assets. One example of this might be delaying when you take Social Security so that your monthly check is larger later in life (when your desire for certainty and security is at its peak).
Aging is not all bad – we can experience corresponding benefits. Guess who has most of the money in the world – folks over fifty. The reason is simple – they’ve had time to build wealth.
Here’s one peek at the bright side: think of older age (I’ll let you come up with what that specific number is!) as the time to reap what you’ve sown. It’s a season when you get to enjoy your wealth – every kind of wealth: financial wealth, relational wealth, familial wealth and (if you are so inclined) spiritual wealth. There can be great joy in sharing a life of experiences and wisdom – if you’ve been a person who has personally nurtured such qualities in yourself.
Aging is approaching – so what are you doing about it today? If your physical health is not what you want it to be, do everything in your power to reclaim it. Diet and exercise can be powerful tools, but seek a doctor’s advice first, then consider professional help in each area.
And if your financial health is not what you want it to be, the best time to do something about it is now. Seek out the services of a financial advisor you can trust and work with her to install a plan that incorporates the realities not only of your life today, but also of your life tomorrow.
The purpose of wealth is to serve your happiness. Just understand that as you age, that happiness a moving target.
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Byron R. Moore, CFP® is Managing Director / Planning Group of Argent Advisors, Inc. Email him at email@example.com. Write to him at 500 East Reynolds Drive, Ruston, LA 71270 or call him at (318) 251-5858. The opinions of any single advisor do not necessarily reflect the opinions of Argent Advisors, Inc. No forecasts can be guaranteed. Argent Advisors, Inc. does not offer tax, insurance or legal advice. The information contained in this column should not be construed as a substitute for personalized investment, tax, insurance or legal advice.