Prosper and Live Long
In the original Star Trek series, actor Leonard Nimoy, playing the character Spock, popularized the Vulcan salute, “Live long and prosper!” The point was to wish someone good health and good fortune. However, given a recent The Wall Street Journal report on life expectancy in
There is a distinct link between financial stability and healthy wellbeing and longevity. Average life expectancy at birth in 2020 was pegged at 77 years, down 1.8 years compared to 2019 due to Covid-19 and other factors. Where you live may make a difference.
Why the differences? Highest life expectancy was found largely in the western and northeastern states and also included
In 2020, heart disease, cancer, and Covid-19 were the three top causes of death. Unintentional injuries such as drug overdoses, homicide, and diabetes also contributed to lower life expectancies compared to 2019. There’s increased concern about patterns of marijuana use, facts of interest to parents who want to see their teenagers grow up, prosper, and live long. A 2018 study by the National Institute On Drug Abuse (NIDA) indicated that longer-term use of cannabis, extending from age 18 into the late 20s or beyond, was associated with “increased risk of self-reported health problems at age 50.” Problems included psychiatric and psychological disorders, use of more lethal drugs, alcoholism, and physical illnesses. With harmful drug use of any kind, in addition to the cost to purchase the substances, overall earning power and financial wellbeing suffers. Financial poverty and “poverty of spirit” contributes to shortened life spans. If you have just turned 18 and are off to college, a work career, or the military, don’t let your dreams of success and financial independence go up in smoke or vapor!
Many financial advisors promote achieving financial independence by your anticipated retirement date. Since “retirement” means different things to different people, why not pursue financial independence at the earliest date possible? Mitch Anthony, in his book, The New Retirementality: Planning Your Life and Living Your Dreams...at Any Age You Want, 5th Edition (Wiley, 2020), diagramed a financial rendition of Abraham Maslow’s famous Hierarchy of Needs. At the base of the pyramid is “Survival Money.” Once you earn and accumulate enough money after tax to meet basic needs, the next level is “Safety Money,” reserves to “meet life’s unexpected turns.” Next comes “Freedom Money,” spending on things that bring “enjoyment and fulfillment to life.” Like trying to achieve Diamond level in Delta Airline’s “hierarchy of frequent flyer perks” aimed at traveling in comfort up front in first class, focus on building Freedom Money.
It’s said that “money does not buy happiness,” but it takes money to buy a Peloton stationary bike or other investments in self-improvement and healthy living that may add years beyond your scheduled expiration date. The famous contemporary philosopher Bo Derek once observed, “Whoever said money can’t buy happiness didn’t know where to shop.”
Before you reach the Freedom Money level, you have to cover the basics and have a sufficient “safety money” reserve before you can begin to wisely and prudently pay for things in the “freedom and fun categories” without running up debt. Use credit cards to accumulate frequent flyer points, hotel nights, or cash back, but paying usurious interest rates on credit card debt isn’t freedom, it’s servitude.
If you are approaching retirement and want to take an around the world cruise or a dawn balloon ride over the Serengeti, have a three to five year reserve in insured money market accounts, tax-free municipal bond portfolios, or other low volatility reserves, so you can spend “freedom money” with peace of mind even when your stock portfolio is down in value.
There’s an old saw about the “three phases of retirement”...go-go, slow-go, and no-go. Have a plan to cover slow-go and no-go eventualities. Elder care is expensive!
What we are talking about is “long-range financial life planning.” Looking out over the next ten years, and ten years beyond that, what challenges, positive or negative, do you foresee? Your answer to that question starts the conversation. Next comes a focus on the best alternative to answering each challenge, followed by deducing the resources needed to power the best alternative for meeting challenges. Resources may involve financial capital or human capital. Lastly, what are your expectations? What do you want to experience when it’s all said and done?
By the way, Bo Derek is now 65 years old. That’s how fast time flies. Plan ahead!