The US economy has experienced some incredible gains over the last 40 years. Our GDP (the size of our economy) has tripled. The S&P 500, when you include reinvested dividends, has risen more than 9,000%. Since the 1980s, average household income in the U.S. has risen by one-third after inflation.
Couple all that tremendous economic growth with the huge advancements we’ve made in health care and technology, and it goes without saying that people are much, much happier today than they were a few decades ago. Right?
According to many surveys and studies, the overall happiness of people in the US has flatlined even as we’ve seen so much improvement in our standard of living and quality of life. The level of financial satisfaction people report has actually dipped a bit, despite the stock market’s long-term upward trajectory.
To be sure, media scare tactics and the 24/7 financial news cycle keep folks more on edge about their money than they need to be. But the data also shows that increased return on investment, in and of itself, doesn’t make people happier or their lives more fulfilling.
On today’s show, we discuss a new way to think about what your money is really for: improving Return on Life. We also debut a brand-new assessment tool on our homepage, the ROL Index, that you can take. Give it a try – I think the results are going to surprise you!
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What is Return on Life?
The ROL Index challenges you to think less about how much money you have and more about how you are – and aren’t – using that money to live your best possible life.
The assessment consists of 20 questions grouped into 10 aspects of life that folks might want to improve. At the end of the assessment, you’ll receive a report that provides you an overall score in these three important areas that we believe are critical to a more fulfilling retirement.
I’ve talk to many folks at Keen Wealth who have more money than they ever dreamed they’d have thanks to hard work, disciplined saving, and prudent investment strategies. Problem is, they don’t enjoy it! They don’t go on vacations. They don’t devote time to hobbies or interests. They don’t take their spouses out for date nights. They don’t exercise or cook healthier meals.
Once retirement rolls around, the loss of identity these folks experience without their 9-to-5 responsibilities creates a void. They start puttering around the house and driving their spouses crazy. Maybe they dip into their assets to buy a sports car or big-screen TV, but those quick hits of happiness are too fleeting to fill decades of retirement life.
Paying your bills and supporting your family are important. But your well-being has to be part of your financial picture too. If your ROL Index score in this category isn’t as high as you’d like it to be, think about how you can carve out some time each week to relax, recharge, and reconnect with the people who are most important to you.
Another story I hear all too often: “Bill, I hate my job. But they pay me so well there’s no way I can leave.”
Again, meeting your financial obligations is important, and most folks don’t love everything about their jobs every single day. But if you spend 40 hours every week just chasing after a paycheck, eventually you’re going to feel like a hamster stuck on a wheel. You’re putting in a lot of effort, but you’re not getting anywhere.
A low Progress score on the ROL Index tells me that a client might be thinking about money as an end. It’s not. Your money is the vehicle that helps you get where you want to go in life. For some folks that destination is a dream retirement home on the beach. For others it might mean taking classes or professional lessons that help them grow or develop a skill. Some folks will even create a job that is 100% fulfilling by starting their own business.
It’s hard to feel free when we’re talking about money, because we often feel like our financial situation is at the mercy of outside forces. An earthquake on the other side of the world makes investors jittery, and the markets suffer. Our political leaders bicker about changes to tax code and financial laws whose affects take months to sort out. We’re too stuck on that hamster wheel to use our skills on activities and causes that are important to us.
One helpful feature of the ROL Index is that you and your advisor can revisit it and update your answers so that you can see how your scores change over time. I’m always happy to see clients whose feelings of Freedom increase as they near retirement age. That tells me that the kids are out of the house, worries about work are waning, and the client is ready to start an exciting new phase of life.
That client feeling free also tells me that the Keen Wealth team did its job putting a financial plan in place that will make a greater Return on Life possible.
Visit keenonreirement.com to take the ROL Index. When you’ve finished, you’ll receive a personalized report by email. We’d love to discuss the results with you!
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Got a question or comment? Email it to me and we’ll get back to you or call our office at (913) 624-1841.
Bill Keen is a CHARTERED RETIREMENT PLANNING COUNSELOR℠ and independent financial advisor with more than 25 years of industry experience. As the founder and CEO of Keen Wealth Advisors, a registered investment advisory firm, he specializes in providing personalized retirement planning designed to help people thrive before and during their retirement years. With a passion for educating others, Bill regularly blogs about retirement planning, hosts the podcast Keen on Retirement, and has contributed to U.S. News and World Report, Reuters, Wall Street Journal’s Market Watch, Yahoo Finance, and other publications. Based in Overland Park, Kansas, Bill and his team work with clients throughout the greater Kansas City area and across the nation. To learn more, connect with him on LinkedIn or visit www.keenwealthadvisors.com.
Keen Wealth Advisors is a Registered Investment Adviser. Nothing within this commentary constitutes investment advice, performance data or any recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. Keen Wealth Advisors manages its clients’ accounts using a variety of investment techniques and strategies, which are not necessarily discussed here. Investments in securities involve the risk of loss. Past performance is no guarantee of future results.