Prevention is better than cure: A prescription for financial security
A client of mine (we’ll call her Susan) recently told me about an aunt of hers who’d reached 100. “She worked one job, retired at 60, and has outlived her husband, friends, and siblings,” she said. “It has been a lonely 40 years, particularly the last 10, when mobility has become a challenge.”
And here lies one of the biggest challenges we face when it comes to longevity. Many of us have a chance of living to 100, thanks to new medicines, cutting-edge treatments, and advances in artificial intelligence. As each year passes, it gets that little bit easier for doctors and healthcare providers to keep us alive.
There is a catch, of course. While each generation is predicted to live a decade longer than their parents, there’s no guarantee that those extra years will be healthy, fulfilling or financially secure.
Stopping life-threatening illnesses in their tracks is only half the battle. To make the most of our 100-year lives, we need to focus on prevention, rather than cure. And not only is this true for our health, it’s true for our relationships and finances too.
Why preventing money problems is better than curing them
The average person tackles financial problems that already exist. Perhaps they want to get out of credit card debt, save for an emergency when the roof is already leaking, or raise funds for lifesaving treatment abroad because they don't have any insurance.
Very few people take a preventative approach to their money. The list of problems they want to solve is almost always longer than the list of problems they want to avoid.
And this is where a financial planner can be a godsend. In some ways, speaking to me can feel a bit like visiting your GP. You tell me your problems and I’ll offer you a prescription.
But since prevention is better than cure, I like to take a more long-term approach to my prescriptions. Not only will I prescribe the best medicine for whatever you're facing today, I'll equip you with all the knowledge and motivation you need to live a healthy and wealthy life tomorrow. I guess you could call this a prescription for financial security.
A prescription for financial security
Back in May, I wrote about another client of mine, Joe. Joe had been on a mission to retire early for quite some time. But his friends couldn’t wrap their heads around it, assuming he wouldn’t have enough to live a comfortable retirement unless he and his wife lived a frugal lifestyle.
However with his prescription for financial security in place (okay, his financial plan), Joe knew exactly what he was doing. His decision to retire early was carefully considered and intentional. He’d been working towards it for years. Since retiring, he’s been able to spend more time with his wife and explore dozens of hobbies including paddle tennis, volleyball, and poker. They’ve booked four holidays so far and he only retired this year.
“It’s almost as fun planning the adventures as it is experiencing them,” Joe joked.
Most people worry about running out of money. Very few worry about wasting their life. But if you’re going to live to 100, you need to think carefully about how you actually want to live. There’s no use spending your entire career working 50 or 60 hour-weeks while dreaming of some far-off retirement.
I was listening to a podcast the other week where someone pointed out that by the time you turn 18, you’ve already spent most of the time with your parents that you’re ever going to spend with them. You can’t make up for all that lost time by throwing the occasional birthday party. If family is important to you, you need to build a life that makes spending time together effortless… or at least achievable.
A flexible life
Once you’ve got a prescription for financial security in place, building the life you want becomes so much easier. Suddenly it’s possible to do what you want, rather than being stuck at home, living off beans on toast, in fear of the unknown.
Reassuringly, Susan, who I mentioned at the start of this piece, and her husband appear to be on a different path from her aunt. It’s largely down to living the type of lifestyle that Lynda Gratton and Andrew J Scott advocate in the 100-year Life book. Instead of following the traditional and somewhat arbitrary life path that previous generations were expected to take (education, work, then retirement at the end) they’ve blended the three life stages together.
“We have a very comfortable lifestyle, enjoying doing all the things we want to do,” Susan says.
They’ve worked in a multitude of jobs and dipped their toes in countless new challenges. They have the flexibility to work around their personal lives, rather than the other way around. They work for enjoyment, fulfilment and connections, instead of for money. Of course, this would never have been possible without a preventative approach and a prescription for financial security.
This means they can sleep soundly at night knowing that they’re extremely unlikely to run out of money. More importantly, the chance of passing away having wasted their life is impossible.