Let’s turn our attention to money!!!! What is money and why do we give it so much power? There are many conflicting attitudes we all have towards money. Starting with the biblical one that the love of money is the root of all evil, through money is the great enabler of lifestyle and consumption in this present time.
Wikipedia gives three broad definitions of money:
- It is a store of value
- It is a unit of accounting
- It is a unit of exchange
The wise amongst us from an early age have a strategy that is measurable, implementable and sustainable with our retirement savings. With such a strategy we use money as a unit of accounting. We pay our premiums monthly and do our best to increase our income each year.
Over time, as we measure the growth of our retirement savings each year and check that our strategy is in alignment with our financial and lifestyle needs, we experience the store of value. Oscar Wilde was prophetic in saying “Man today know the price of everything and the value of nothing”. Our journey to retirement and our strategy should have much more attention focused on value and our moral and ethical values. The financial services sector focuses on and promoted almost exclusively the financial aspects of what is required at retirement. This focus adds to the mythical power we as humans give to money. We quickly forget that it us as individuals that have power. Money has no power…. except when we collectively give it power.
We should all think deeply about this power. Who controls money? Who owns money? Can I control money? And can I own money? It is a form of energy; we can harness it safely to a certain extent. Similar to electricity. But total control is not possible, so why worry about total control. Rather create and develop a strategy that allows us to harness and store as much of this energy to enable sustained lifestyle and our system of values.
On a day to day basis we exchange money, we receive money for our creativity, our production and we exchange it with other people for their creativity and production. A wise farmer will build a dam to store water for the drought. A sports team will have reserves incase of injury and to substitute exhausted players. In our retirement strategy we should create this “money dam” so that we have “running water”/money flow till we die. Once we stop working, income flow from creativity and production dries up and we have in effect a drought.
We don’t know how long this drought will last as we do not have knowledge of the date of our deaths. Many people face a day zero with capital running out. Having a strategy can mitigate a day zero, a strategy can flip the financial services focus on the numbers only to looking at ourselves as a whole person, with many facets and aspects and plan to keep all of these in place for as long as possible. The strategy should be to add life to our years, not years to our life.