Creating your Portfolio of Life!

In an earlier Blog I spoke of the fact that Retirement as we know it is no longer meeting the needs of those in it, facing it in the future or for our society in general. Irrespective of your opinion on this view demographic mathematics will force the change, and so it’s better to be doing it on your own terms!

Work work work, hope and save, then stop work and sit around getting bored. Boredom interrupted with angst about having enough money to last, and a sense that you have so much more to give and live, yet feel trapped in a way of being that just doesn’t feel right. That’s retirement as it is today. It was invented in the 1940’s for a different stage of our world.

The good news is this stage is drawing to an end. The further good news is all but the poorest can now live very differently and productively indeed. It requires a change in our assumptions and a little imagination and flexibility. Perhaps just a tad of courage too!

Is this just for older people? No. Anyone can embark upon this. Indeed the Millennial generation has already decided the life and approach of their parents to work and retirement and careers no longer will suit them. They watch and listen. They see what is going on. They may not understand why but they do sense it will be different for them, and they are right on this score. They see their working lives across multiple employers and careers. They see long periods of no work or just part-time work.

The challenge for millennials will be on how to develop habits with money that supports this. For the rest of us it will be how to change and embrace a new way of being along with adding some new skills to the wisdom already hard earnt when it comes to money, relationships and work.

Introducing Your Portfolio of Life.

This is based upon the view that in the west we are very blessed with healthier active lives that last longer. Right now this means some 20 years longer than our parents. At the same time however, our society is devaluing older people over the young, in terms of work, careers, where they reside and even in looks. Yet ask anyone you know in their 60 and 70’s and they still think and feel like they did decades ago (at 50 I feel no further ‘matured’ than I did at 35).

So what is it? Simply a collection of activities and interests that are constructed as a well thought out ‘Portfolio’. Each component arranged to fulfil certain goals and objectives. Some are work related. Within this some are paying and some are not. A Life Portfolio considers work, vocation and play, along with relationships across partner, family, friends and communities. Even where you reside and how. There are several options that can vastly reduce your cost of living without a reduction in enjoyment, fulfilment or security. Future blogs will look at these options.

It is not a collection haphazardly put together of charity work or hobbies. Although, for some these may be components of a portfolio. It takes time, a year or so to build. There are things you have to think through, own up to and even discuss with others.

Financial Planners will espouse that to enjoy the average income as a couple, you need around $1Mn to $1.5Mn in investments (assuming you own your own home) and will be around for at least 30 years. There is great deal of assumption in this and with this missed opportunity and dangers too. Many with a Life Portfolio have this and more, but most don’t and yet still go out, spend and enjoy! It all comes down to how you view money, what you do in your portfolio and making active choices between the ‘now’ and the ‘tomorrow’.

It doesn’t involve however radical change or becoming a monk! It focuses on what resonates with you. What are your interests, skills and desires. What gratifies you? Not job titles or roles but skills and things you like doing.

Is anyone doing this? Yes and they report they are happier than they were before. They are productive and useful with purpose. Most of all they feel great. Often their health and wellbeing has improved markedly.

It requires preparation a little planning and a wise structured approach to managing finances.

What does it provide? For those in careers or are self-employed and feeling burnt out or are forced to exit? A Life Portfolio approach provides a way out, and yet with security and enjoyment. For retirees it provides the way to lead life with more purpose and happiness but with strong financial security. For those early in their lives and not wanting to be shackled to the expectations of others, it provides a far more independent and interesting way to live, again with security.

What would a typical one look like? This is highly dependent on each person, but here is an example of some of the features of one.

In each of the below you would set your own goals, pursuits, practises (sometimes with some expert help).

1. Vocation: Yes work. But what type, doing what, and in what way ? Is it part time, full time or contract. Will it last 10 + years or simply just a few before it ends and you do something else? Usually it will be a collection of two or more. Not always paid or paid highly.

2. Avocation (Recreation). What is it you enjoy doing, or used to? With whom and how often? Most adults have had it beaten into them that the excuses of work and family life preclude this…but not so! Time to regenerate something just for you in a pastimes and pursuits.

3. Community & Humanitarian. Contributing and giving back are powerful but have recently been obscured due to the current age of individualism. The buzz is addictive. It generates a lasting fulfilment. A gratification as opposed to a pleasure. Think – tasty high fibre cereal over sugar. Don’t just think of clichéd ways of doing this. The things you can do are limited only by your imagination. I’m also a member of my local Coast Guard SAR.

4. Family and Friends. Maybe you are already great at this but most of us are not. When you partner or children speak, do you really listen? Are you present in the moment? Or are your distracted, grumpy, tired and stressed. For men, when was the last time you had many hours with a mate, minus the excuse of sport or alcohol? Ever just dropped in to see someone without a plan or invite? Taken hours over many weeks recently to create something wonderful for your partner that they (not you) will enjoy?

5. Self development /spiritual. It could be just reconnecting with your religion. For me it was about learning to be calm (I’m still learning), be present in the present and to let go of angst. It was also tied into the first item above. Im learning to be a Stone Mason. Because in my professional life I always secretly harboured the thought of learning a trade- this one. It means going back to school. And I love it!

It is about setting the mix to suit you. Most of us are doing many of these things already (if you are lucky). It’s the mix and how its staged for a lifetime of fulfilment is what the Life Portfolio however adds.

Constructing each bit over time in the sequence that suits your situation. Making the transition well. As you do so getting your financial affairs constructed right is crucial. Its these things that set it apart from self-help idealistic books and a real life! It’s made a lot easier once you figure out the type of spending that generates security and gratification (as opposed to just pleasures/ consumption)

One secret to know….. imagine if you traded a little money for time? What if you earned less from work but the work you did freed up more time and came with less unnecessary B.S and pressure? This has a drastic benefit on the amount of income you need.

Using myself as the example, I used to travel overseas for a break (less than 2 weeks) and often unavoidably at peak periods. I don’t like wasting days on getting to and from. This all means at least double the cost in accommodation and airfares. What if I could holiday when it was low cost and could take my time getting there worth a stop-over or two along the way. I travelled to the Netherlands first class across the planet on New Years Eve for the price of premium economy but had to stopover for a night along the way in a 5-star hotel for $100. I had the time to research an out of the way but beautiful place to stay at half the usual costs. In daily life I now have time to buy furniture and appliances near new for one fifth their retail price. I used to buy luxury new cars all the time. I now buy second hand.

Being in Australia this means an extra $30,000 donation to the tax man saved each time. I buy the near latest look via auction. I have time to do it and to wait for a bargain. Best of all for those worried about the “Jones” don’t tell em’ you bought items this way. No one will ever know!

All because I now have the time to do so. We shop in bulk and have the time to do so. I can research and compare on the web. I have time to pick up a trailer and go get the $9,000 sofa for $1200 and travel across the city at the risk I might not want it once I see it. All this adds up to tens of thousands in annual expenditure. Be warned, once you get into it, it becomes addictive and you will find it amusing watching others waste thousands and thousands on having a less of a good time than you do!

Something that fulfils me in terms of both vocation and community is that I divert some of those savings to helping micro businesses in developing nations- usually its to women because they do much better with money, lending funds at low commercial rates and terms that breaks cycles of poverty and abuse by others. It feels great to make a commercial investment and see it lift the lives of entire families. But hey that’s just me. What is your thing?

The path to creating your Life Portfolio is straight forward but also requires a bit of introspection and courage. Mind sets, assumptions, how to get back in touch with what is really important to you amongst other things need to be addressed.

You will be different to your friends, but most will quietly envy you and wonder how you did it. Most of all A Portfolio of Life delivers you something HUGELY IMPORTANT. You are part of the 2% on this planet with the means, situation and brain to do so. That’s an amazing gift. Use it.