20 Jul 2023 Alternative Investments
Ask any group of financial advisors for their recommendations on how to invest for retirement and you’re sure to get a wide variety of answers. That’s not surprising given the multitude of different investment options, philosophies and strategies that exist today, and the fervor with which they are espoused. With so many options to choose from, it can be difficult to design and implement an investment plan that fits your own personal situation and gives you the best chance of accomplishing your important financial goals.
At Beacon we have a smart, well-thought-out investment philosophy, but I’ll acknowledge there are others that work, too. It’s likely that the strategies that work well share several characteristics that involve simplicity, keeping costs and taxes low, and minimizing emotional mistakes. And of course, even the best investment strategy won’t work if you can’t stick with it over the long haul. But what if it’s possible that even the soundest retirement investment strategies are missing some critical pieces that may be necessary to put you on track to have a fulfilling retirement?
Recently, I listened to a podcast with Michael Finke, PhD, CFP®, Professor of Wealth Management and Director for the Granum Center for Financial Security at The American College of Financial Services. Through his extensive research in the area of life satisfaction in retirement, Dr Finke has identified three factors, or pillars, that are the strongest predictors of satisfaction and happiness during people’s retirement years. The three distinct pillars are money, health, and relationships. It’s clear that money plays a significant role in allowing us to experience a happy retirement, but health and relationships seem like obvious factors, too. It’s not difficult to imagine a scenario where we’ve accumulated a significant nest egg but lack the good health or social connections to truly enjoy it.
Dr. Finke’s “pillars” might not seem new to us; however, it can be easy to have knowledge of something without that knowledge easily translating into actual behavior and habits. Most of us spend a significant amount of time focusing on the money pillar, but it’s important that we don’t neglect the other two. If we’re hoping to spend our 60s, 70s, and 80s enjoying the nest eggs we’ve worked hard to accumulate, we should also be simultaneously making investments in our health and relationships. Just like our financial portfolios, the other two pillars require time, energy, and effort if they are to thrive.
Recently, I’ve been trying to be more intentional about investing in my health and social “portfolios.” It’s a work in process and I’ll offer more details in a future brief. In the meantime, I invite you to join me in my pursuit of smart investing. What does it look like to make investments in our health, marriages, and friendships today so we can have the best shot at having a fulfilling and happy retirement? Whether you’re just starting out or already retired, I’d love to hear about ways you spend your time and financial resources to improve your health and social connections.