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  • Writer's pictureRobert Dunn, CFP®

I Will Be Wealthy When? Most people who aren’t working with a holistic advisor cannot answer this question.

Updated: Jun 26


Key Takeaways
Planning
  • Wealth is not just about money; it’s about what money can do for you and your loved ones.

  • The Life Wheel can help you prioritize and quantify across all aspects of your life such as career, family, recreation, personal growth, finances, etc.

  • Make sure you and your spouse are aligned when it comes to finances, family, and work/life balance priorities.

  • Is your advisor providing guidance on the non-portfolio aspects of your life?


The purpose statement for Novi Wealth Partners is as follows: “Empower all to find their definition of wealth and provide them the confidence to achieve it.” 


I want to focus on the first part of this statement: empower all to find their definition of wealth. At Novi we believe that most people don’t necessarily care about money; they care about what money can do for them and their loved ones.


What Does Wealth Mean To You?

So, what is it you care about most? Have you taken a moment to review the areas of your life that are most important to you? Are you devoting enough time to them? Have you taken a step back to understand what is important to you? At Novi, we are not licensed counselors or life coaches, but we know that gaining a clearer understanding of why you are working so hard to create wealth requires you to define what wealth really means to you. Is it knowing your family is financially secure regardless of what the economy and stock markets are doing? Is it having the freedom (and resources) to see the world or visit family no matter how far away they live? Is it about fulfilling philanthropic objectives or giving back to the community? Perhaps it’s a combination of all the above.


As a result, we spend a great deal of time getting to know our clients and the people most important to them. That way, the planning we construct for clients is meaningful and they’re properly motivated to achieve their goals. One potential planning tool is The Life Wheel.

 

Basic life wheel

The basic Life Wheel helps you gauge the relative importance of all key areas: Career, health, family and friends, financial well-being, fun, recreation, personal development, romance, and contributions to society or faith to name a few. The next step is to evaluate the degree you are trading off one item for another on a scale of 0-10, in which 10 means most important/time-consuming and 0 means least important/least time-consuming. Most people do not have a perfectly balanced circle. If they’re answering honestly, they’re usually underscoring areas that are enormously important to them. If you are seeing huge distortions in your life such as in the wheel at right, there is likely room for improving upon them, so you have more balance.


If you’re a married couple, it’s especially important to see how well you and your spouse are aligned. We often see family as the highest priority for one spouse and money/finance as the highest priority for the other. But that’s not the whole story. Is all of one spouse's time being consumed by work? Is one of you a workaholic, or does that spouse simply feel like they must keep making more money to support the family (often a high priority for one spouse) and help them plan for a comfortable retirement? Is that what’s causing one spouse to sacrifice all these other items on their Life Wheel? Both spouses need to see that.


Retirement

Through our planning, we can first address the question: “What does retirement look like to you?” along with how far in the future you envision retirement happening. Then we can ask: “What are all the expenses you’re facing today, and which ones will potentially go away in retirement? With that information in hand, we can work together to calculate a reasonable amount of money that they’ll need in retirement. Then we can align that number with the resources the couple has to work with. What we typically see after going through this exercise is that the amount of money a couple thinks they’ll need for retirement is often much more than what they really need. However, if the analysis determines that one or both spouses must continue to work longer in order to reach their goals, we can ask: “What changes can you make in your life so you can still keep working but spend more time doing what you love to do?”


For instance, if you’re a worn-out corporate executive who loves to mentor young people or cook, could you transition out of your high-stress job and work for several more years as a schoolteacher, or in a restaurant or on the ski patrol? These passion jobs won’t likely pay as much as your corporate job, but it keeps the money coming in and gives you a much more balanced and fulfilling life. By the way I have clients and professional colleagues now pursuing each of these passion-jobs above.


Real World Example

We’re working with an active couple in their early 60s who have both recently retired from

their demanding corporate jobs. Their priority has always been family. Without all the long hours and work-related travel of their careers, they knew they would have more time to spend with their children and other close relatives, many of whom live out of state.


When they first came to us, they wanted to know if early retirement was possible since they

Early retirement

still had a child in college. They were also considering buying a second home and wanted to know if that would be feasible. Because they were under age 65, they were not yet eligible for Medicare. So, of course, they wondered how they would afford health insurance. Mainly they wanted to know where they would draw their money from to cover living expenses.


Once we helped them address these and many other questions, they were able to begin their early retirement planning journey. I caught up with them about six months after they officially retired, and it was amazing to see how much happier and more relaxed they were. They were thrilled to be officially retired and they now had the confidence to do so. They’re enjoying many activities and pursuits they had long put on hold during their working lives. Finally, we are maximizing their distribution planning to ensure they take full advantage of the tax code.


Conclusion

If you are yearning for more balance and fulfillment in your life, but don't feel like it's within your reach, I urge you to fill out the Wheel of Life above. And if your financial advisor is just helping you with portfolio guidance, know there are other options to working with advisors who take a more holistic approach to planning. That way, you can create a more meaningful and fulfilling life beyond money. As always, contact us at any time to discuss. We’re happy to help.


 

ROBERT B. DUNN, CFP® is the President and Managing Partner of Novi Wealth 

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