Work Hard, Save Your Money, and Don’t Forget to Stop and Smell the Roses

When I was a teenager, one of my favorite musicians was Mac Davis, a crossover country and pop star whose hits included “Baby, Don’t Get Hooked on Me” and “One Hell of a Woman.” I still remember one summer, when I was about 15 or 16 and working at the Ohio State Fair. He was performing at the fair, and I was lucky enough to meet him. That memory resurfaced this weekend, when I found myself thinking of another one of his hits while I was enjoying a weekend in New York City with my wife, Gina.

A couple of weeks ago, I posted “Are You Living Too Frugally?” It was a discussion about the tendency of a large number of retirees to spend well beneath their ability. They have become so accustomed to saving money and watching their expenses that they find themselves sitting on a big pile of money late in life that they are hesitant to spend. In the article, I tried to convey that while it is important to keep funds available in the event of a financial or health emergency, it’s also important to experience life. We want to make sure that we cross off our bucket list items before it’s too late.

This weekend, I thought about how important it is to live life before retirement as well. The other hit song from Mac Davis that I alluded to earlier was “Stop and Smell the Roses.” The lyrics of that song convey the message about how important it is to make sure you have a balance between your work and your personal life. Taking it one step further, it’s important to get that work/life balance in order throughout your life, not just in retirement.Before you went to work this morning in the city, did you spend some time with your family?

While Gina and I both enjoy our work, we sometimes find ourselves wrapped up in the daily tasks of running our respective businesses. We don’t work physically hard, but we do work hard and often spend the majority of our waking hours inside our business. We are both in the client service industry, so it’s important to make sure that we take care of the things that our clients expect from us. But it’s just as important for us to step away at times so that we can refresh ourselves and recharge our batteries. We are not going to do our clients any good if we end up burned out and not giving our all when we are working.

Plan for the Future, but Take Care of the Present

It’s important to make sure you take time for you and your loved ones. Life is about more than the work we do. As a financial advisor, I’m always emphasizing how important it is to save and invest for our future selves, but it’s just as important to take care of our present selves. We all hear way too many stories about someone we know who passes away at far too young of an age. We get only one shot at this life, and we need to make sure that we are making the best of it. As the saying goes, “I’ve never met someone on their deathbed who wishes they had spent more time at the office.”

This weekend, Gina and I stepped away to focus on our work/life balance. I was attending a conference in New York City, which ended on Friday. On Friday afternoon, Gina flew up to join me. We spent the weekend in Manhattan, sampling the city life. We ate at some nice restaurants, did a couple of runs through Central Park, attended a couple of Broadway shows, and toured the 9-11 Memorial in the Financial District. We didn’t do any work for the entire weekend, which is unusual for us.

We spent quality time with each other and had fun. That’s what’s really important, isn’t it? As I write this, we are on the plane heading home. It’s back to work tomorrow. And while we may be a little tired and might still be recovering from our weekend in the Big Apple, we both feel refreshed, relaxed, and ready to work.

Yes, it’s important to plan for your future and make sure you are prepared for the days when you are no longer working. Save. Invest. Make sure you and your family are protected and that your financial house is in order. Work hard and do the best you can at whatever career you have chosen. But it’s equally important to “Stop and Smell the Roses” along the way.

Are You Living Too Frugally?

Meeting with our clients is one of the best parts of my job. Many of our clients have been with us for several years, and our meetings are like conversations with old friends. While we spend a good amount of time in our meetings reviewing portfolios and discussing financial issues that are affecting them, most of our time is spent catching up on what has occurred in their lives since our last meeting and making sure we are all prepared for whatever might happen in their future.

Every client is different and therefore every conversation is different, but there are also a number of similarities. A couple of meetings I had last week demonstrate how similar our conversations can be at times. In two separate meetings, with two separate, longtime clients, I had the same piece of advice. “Go spend some money” was my message to both.

That advice might sound funny coming from someone who makes a living by trying to get clients to save and invest for their future. But in these two cases, the advice was certainly appropriate. And, based upon the research paper I read this weekend, it’s probably appropriate for a lot more people (more on the paper in a bit).

Both meetings I am referring to involved at least one spouse who is more than 80 years old. They are both still healthy, although both admit to starting to slow down a bit. The other thing that they have in common is that both couples were very good savers through their working years and are very comfortable financially. Not rich, but comfortable. Both couples have nice-sized IRA accounts that we manage for them. And both are taking just enough from each to barely satisfy their required minimum distributions.

My advice to go spend some money is based on my philosophy that because we get to go around only once in this life, we should limit the “I wish we would have …” thoughts before it’s too late. We use a financial life planning approach with our clients that aims to limit the regrets they may have at the end of life. “I wish we would have taken more family vacations,” “I wish we would have traveled more,” “I wish we would have given more” are all examples of regrets we try to help them avoid.

Plan Wisely, but Don’t Miss Out on Life

I certainly understand the desire to keep a healthy level of funds available in the event of a long-term-care need. In fact, I support it. I often say that the time bomb ticking inside of anyone’s financial plan is the potential for a long stay in a nursing home. So I’m not advocating that they go on some wild spending spree. But I don’t want them so concerned about a potential need that they miss out on what life has to offer.

The research report I mentioned earlier confirms that my clients are not unique in this regard. The report, Living Too Frugally? Economic Sentiment & Spending Among Older Americans, by Mark Fellowes, CEO of United Income, suggests that retirees are not spending enough in retirement to live out their life-long dreams. The report indicates that, for a lot of seniors, a lack of confidence in future economic growth and their own financial well-being keeps them sitting on large portfolios.

A study done by the University of Michigan for the Social Security Administration and the U.S. Commerce Department found that adults become less optimistic about future economic growth and financial health as they age. So they are less likely to spend their nest egg. The study also found that wealth and investments generally grow as people age—so they are leaving behind large amounts of wealth when they pass away.

While leaving behind some wealth for your heirs is certainly not a bad thing, I would guess (or at least hope) that most kids would prefer to see mom and dad live life in such a way as to have few regrets. So our advice is to do some long-term-care planning and make sure you will be able to afford whatever care you may need as you grow older. Then go spend some money!