19 August 2023
Bruce Helmer and Peg Webb
Long-term readers of this column know that we spend a lot of time and attention on helping clients set goals. Goals are foundational to making financial decisions around investments, asset allocation, and income planning.
But financial goals are not some abstract concepts in a vacuum. They need to reflect your values — what matters the most to you. Values emerge from the accumulation of lifetime experience, struggle wisdom, and yes, loss and pain.
As humans, it’s natural to look at fame, wealth, and high achievement as shortcuts to personal success. What drives good health and happiness is far different. Behavioral finance has established a deep connection between our views of money and the environment in which we were raised and the people with whom we spend time. If our parents and friends make bad money decisions, it can leave an indelible mark on our psyches, with our response either leading to a pattern of overspending and debt, unnecessary frugalness, or careful and prudent decision making.
So, when we say it’s important to recognize how those inherited values impact us, we need to become more self-aware. As our old friend and leadership consultant, Doug Lennick, pointed out on our recent radio show, self-awareness is tied to our experiential triangle of thoughts, feelings, and actions. Self-awareness is connected to our happiness, and it’s the reason Doug thinks (as we do) that we must invest with our personal values front and center, and not some abstract notion of maximizing returns simply for the sake of returns.
Since 1938, the Harvard Study of Adult Development has surveyed what makes people flourish. The study researchers periodically check in with participants, ask them to fill out questionnaires, and collect information about their health, including the status of their jobs, relationships, and children. It’s the longest deep-dive longitudinal study on human life ever done, and it consistently points to one conclusion: good relationships, far more than any single factor (including money) lead to health and happiness.
Sometimes less is more
To a great extent, life is about struggling and figuring it out. In our work with wealthy families, we often see that too much money takes away the opportunity to struggle, grow and learn. Wealth often creates a safety blanket that restricts children from gaining the self-confidence that they can take care of themselves and their families.
For that reason, we typically advise families to make sure their children can go out on their own and find a job that gives them meaning and purpose before making any substantial gifts. Only in this way can the children build resilience and persistence that become core lifetime values and are critical to becoming successful investors.
Part of the work we do with families is to get conversations started around the role of luck, timing, and networking that played in the family’s accumulation of wealth, in addition to hard work, struggle, and the willingness to take risks. And this comes down to transmitting values that came from the sacrifice of our forebears, the love and care of our parents and close relationships, the vibrancy and opportunity of the American economy, and, of course, our innate gifts and talents.
Legacy and values
Once you have helped your family get comfortable financially and know that you have more than enough to sustain you throughout your lifetime, you can begin to consider how your money might be used to help others. Here again, your passions, talents, and sense of purpose form a trinity of values that can make a huge difference in the world around you. Who would you like to help? How would you like to leave the world a little better? How can you engage your children to pursue what they’re passionate about, and can you help them make a bigger impact through your experience and resources?
The ancient sages stressed that a life well lived is not about accumulating wealth or notching out the best investment return each quarter. It’s built on a foundation of self-sufficiency, self-confidence, and service. It’s filled with close, supportive relationships that require time and effort to nurture. Investing your values, more than your money, is key to achieving joy and meaning in life.
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The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
Bruce Helmer and Peg Webb are financial advisers at Wealth Enhancement Group and co-hosts of “Your Money” on WCCO 830 AM on Sunday mornings. Email Bruce and Peg at [email protected]. Securities offered through LPL Financial, member FINRA/SIPC. Advisory services offered through Wealth Enhancement Advisory Services, LLC, a registered investment advisor. Wealth Enhancement Group and Wealth Enhancement Advisory Services are separate entities from LPL Financial.