The law of the hammer is a cognitive bias to treat every problem as if it’s a nail. People do it with money. As financial professionals, however, we want to be clear that money won’t buy you a fulfilling retirement.
Money can take the worry out of your retirement, but it does not give your life more meaning or make it more fulfilling.
Simply put, your financial bottom line is not necessarily the best measure of living a fulfilling life. Yet the two goals are often confused. Financial goals are often thought of as the goal of financial planning but helping clients define their non-financial goals is just as important.
A recent article in The Wall Street Journal (WSJ) shows how financial goals are commonly mistaken for goals needed to live a fulfilling life. The article is a collection of vignettes profiling retirees with $5 million. WSJ reports all the $5 million-plus retirees have big travel budgets, and some are more frugal, but most spend less than $200,000 annually.
Buried in the sixth paragraph: “And money alone doesn’t answer the other question retirees wrestle with: How to find purpose and meaning in this chapter of life?”
The Journal is a great publication, but they buried the lead! The leading financial daily newspaper perpetuates the myth that money is the solution retirement. This is a common misconception.
Finding purpose and meaning to your life is referred to as “the other question retirees wrestle with.” It’s not “the other question,” it’s THE question!
It’s not uncommon for people to think money solves all problems. As personal financial professionals, however, we want to emphasize that money can make life less worrisome but not necessarily more fulfilling. Please let us know if you would like help in defining non-financial goals that can make life more fulfilling and use your resources to accomplish goals adding meaning to your life.