Are You on Track to Maximize Your Wealth and Lifestyle?

If you knew there were things you could do today to improve your lifestyle both now and in the future, why would you wait? In fact, if you could see into the future to learn how much more wealth you might generate with just a few tweaks and adjustments to your current course to get you on an optimal course, would you act? After all, every day you wait has a compounding effect on your wealth improvement in the long run.

Sadly, inertia grips too many of us even in such an important area of our lives as wealth and security. It is said that we spend more time selecting a car or a vacation spot than we do on financial matters that can have profound impact on the quality of our lifestyles.

Consider the diagram below. It illustrates a hypothetical comparison of leaving things as they are to a course of optimizing our decisions to maximum effect. The lower (red) line represents the course your lifestyle will follow based on the sum of your decisions left unaltered. Lifestyle, defined differently by each of us, improves as we move up the vertical axis.

My Diagram

The upper line (green) indicates that lifestyle can be substantially improved as you make better financial decisions; decisions that are informed by and optimized according to a course that is planned and adjusted along the way. The lower ‘current path’ is is not optimal by definition, but in our busy lives we may be lulled into thinking things are going just great because we have no sense of what ‘optimal’ could be. We haven’t taken the time to chart an ideal course that serves to better guide our decisions as threats and opportunities present themselves.

If you are wondering which course you’re on, then you are on the lower one. The lower course is full of aimless wonder. The optimal course requires intentionality and planning. Any wondering associated with it happens when threats and opportunities pop up prompting a course correction. Optimal decisions or adjustments are based on reference points in the plan. With no reference points there are no course corrections and no optimal course.

If you are not regularly discussing your goals, priorities, and aspirations with your financial advisor, if you are not continually testing the threat of market uncertainty on you plan, if your portfolio is less than market-efficient or continually intelligently re-balanced and managed to minimize taxes, expenses, and market under-performance, if you have not recently analyzed your need for life, disability, and long-term care insurance, free of conflict-of-interests, if you find emotions to often dictate financial actions, then you are most definitely on the path below optimal.

Dozens of little tweaks of $500 here and $1,000 there added up over the course of a year lead to thousands, hundreds of thousands, and millions compounded over a lifetime of accumulation. There is absolutely no doubt that modest optimizing improvements can have significant impact on your lifestyle, now and later.

In addition to the tweaks, a few significant adjustments, based on your priorities, of where you might ‘spend’ from unimportant goals in order to maximize important ones can make dramatic improvements in your lifestyle. If for example market volatility worries you to the point of sleeplessness, and if given the choice you might opt to save more, or work a little longer, or leave a smaller estate in order to enjoy a more stable portfolio that allows you to sleep peacefully at night while still confidently accomplishing every long term goal you value, wouldn’t that be a better course? It’s all part of the process of goal/priority optimization.

The chart above is considerably less fictional than you might think. It’s actually a crude representation of our comprehensive planning and investing process. While we do not predict the future for our clients, we do spend considerable time learning from them what their ideal future looks like and what their resources and priorities are for getting there. Every bit of our process is designed to confidently keep them on the top line while minimizing their worries and financial sacrifices today.