Creating a Life of Financial Wellness

The journey of life is filled with unforeseen obstacles and certain adversity for most all people who dream of one day having the means to live it on their terms.

Within the necessary adversity and financial setbacks one is sure to face, there lies a valuable lesson to consider for those who seek to withstand the financial tests of time. Regardless of where you start and where you finish, the only true guarantee in life is that things will get worse and also get better.

Most people know this to be true. We have mastered many ways in managing the worst of what we face so that we may continue enjoying the best of what we have.

However, managing these ups and downs that go along with all aspects of life can be incredibly emotional, especially when it comes to your finances.

As people, we struggle to condition our responses to the overwhelming but temporary periods of worse or better. We tend to lack perspective and discipline when it comes to sustaining wellness over the long term.

Discipline is certainly difficult to exhibit consistently for almost everyone. However, with the right perspective, exhibiting the discipline necessary to live a life of financial wellness may become easier.

Don’t Forget to Enjoy the View: When thinking of how to achieve a life of financial freedom and stability, most people believe a superior investment strategy is necessary.

Most people are correct in this assessment. However, the feat of determining what strategies will yield the best results and how they can be incorporated into one’s unique life circumstances is incredibly different case by case.

While the certain financial obstacles of living a decent life can be deceivingly difficult to overcome, a plan for long-term financial success may be easier to deploy than we think.

Tracking market performance and continually assessing which sectors for investment show the most upside for growth can be a full-time job in itself.

And a demanding one at that.

However, by making it your job to control what is already within you can be an incredibly effective start in setting the track toward a life of financial longevity.

By saving and spending less than what we make, we are always capable of creating financial opportunity.

The 8th Wonder of The World: As ambitious and forward-thinking people, most of us understand that the various public equity markets of the world are usually where the most upside potential for the average person to create wealth exists.

As mentioned before, the process of determining which of those markets offer the most opportunity and how they fare in comparison to one another is incredibly demanding.

Perhaps what is even more demanding than keeping one’s finger on the pulse of world markets, though, is the task of remaining steadfast in the perspective that sound financial behaviors can be far more important than investment performance over time.

The Law of Compounding, otherwise known as the 8th Wonder of the World, tells us that even modest investment returns can result in monumental growth over the long-term if you maintain a strong discipline for incremental saving and investing.

Assuming an 8% return compounded annually, a one-time $10,000.00 investment by a 22 year-old starting their career will grow to $273,666.40 by the time they reach age 65.

Under the same assumptions of an 8% return compounded annually, if a 22 year-old starting their career today invested even just $300.00 per month with no initial lump-sum investment, they would accumulate $1,186,498.82 by age 65.

Many people believe the world markets to be a place where life-changing financial gain may only be realized with a cutting-edge investment strategy and a willingness to take big bets on what the next world-altering company may be.

Contrary to that thesis, the ability to be consistent in one’s habits to save and invest modestly rather than having a grand investment strategy can prove to be much more effective over time in creating a life of financial longevity.

Ye Old Faithful: Strategies for consistency in saving and investing for the long-term have been championed by financial advisers for years.

Articulating this need for discipline and modesty in one’s saving and investing habits is a cornerstone function of any financial advisory practice there is.

It is one of the fundamental reasons why advisers exist to serve their clients.

This key element of developing an appetite for saving and consistently modest investment has been described in many different ways by advisory practices throughout the financial services industry.

Perhaps the best I heard it described was by a regional market leader for a large mutual life insurance company I was interning for during my junior year of college.

He described the prudent philosophy of developing a consistent appetite for saving and investing with a thought-provoking analogy: Yellowstone National Park.

The market leader went on to ask us financial representative trainees if anyone could name any of the natural landmarks of Yellowstone, or if anyone had ever visited the national park.

A few hands slowly raised, and almost in unison, several people hesitantly blurted out, “Old Faithful?”

the market leader acknowledged the suggestions of what is known as one of the most riveting natural landmarks in our country and the world.

He went on to explain the grandeur of consistency that Old Faithful boasts.

Also known as “Eternity’s Timepiece”, The Old Faithful Geyser is unique to the world in how it has a direct relationship between the length of its eruption and accuracy in being able to predict the time until its next one.

Per the United States National Park Service, an Old Faithful eruption lasts between 90 seconds and 5 minutes.

Based on the length of its eruption, scientists can predict the next eruption with unprecedented accuracy.

According to the United States National Park Service, about 90% of eruption predictions are accurate with a window of plus or minus 10 minutes.

The market leader continued by asking if anyone knew what the biggest geyser at Yellowstone is.

Silence overcame the room.

The Steamboat Geyser is actually the largest and most grandiose of all the beautiful geysers in Yellowstone, and a substantial amount bigger than Old Faithful.

However, unlike Old Faithful, Steamboat has gone years without a single eruption in the past, but just recently had 48 eruptions in the year 2019.

An inconsistent yet incredibly awesome spectacle, Steamboat is not what many hold in their minds, or even know to exist, when thinking of Yellowstone.

However, people across the world travel far and wide to come witness the beauty of The Old Faithful Geyser.

It was further explained that the grandeur in the consistency of Old Faithful is much similar to that in the grandeur of consistent investing.

And, in my eyes, exactly similar to that of the beauty in the ability to consistently capture excellence over the course of one’s career.

That by delivering an admirable performance with unwavering consistency over a period of time, which can begin to feel like an eternity for your competitors, you too can build something that will attract the likes of people all over the world.

The Building of a Legacy: As someone who was not overtly familiar with the uniquely specific landmarks of national parks, I was able to draw this stark parallel in his explanation to another area of my life which brought me passion: sports.

In drawing this parallel, I was able to clarify many of the similarities in my thinking with how I approach the conversation of money management as it relates to the careers of professional athletes.

At first thought, it was an odd proposition for how one may equate the importance of being a diligent saver and investor.

However, as a lifelong fan of sports and having an appreciation for the beauty in sustained performance, I found it to be incredibly effective in painting an important message:

Strive to be consistent rather than grand.

I remember listening to this analogy and thinking of just a few of the names in sports that the world has come to admire in my lifetime.

Tiger Woods, Tom Brady, Lebron James, what is it that has made these athletes so captivating?

While there has been no shortage of grand moments in each of their careers, the unflappable consistency in their ability to perform every night that their number is called is where the true testament to their greatness lies.

Much like a beautiful geyser in Yellowstone National Park, these individuals have built something that will transcend eras throughout history.

Building legacies of greatness and consequent financial freedom has provided these individuals with a platform to touch lives far and wide.

The Bottom Line: The ability to rationalize certain ups and downs, like in all other aspects of life, can create financial opportunity and newfound ways to achieve security.

Sound saving habits and an appetite to make responsible financial decisions can prove to be much more consistently effective in seeking a life of financial comfort into retirement.

More than an elaborate and supposedly sophisticated investment approach, a steel framework of behaviors that allow for prudent saving and investing is incredibly important in the quest for financial freedom.

Much like Old Faithful, or a hall-of-fame athlete, consistent and sustained performance is the key to achieving perceived greatness and glory financially.

Consistently grand performance in the markets is difficult for any manager to deliver. Consistently stellar saving is sure to better one’s chances of building a life they seek to create, even with a modest investment plan.