Connect with us

Business

Finance: Three pillars of happiness for worry-free golden years

Published

 on 

Thaiger deals Thaiger deals

PHUKET: Much of my time is spent with clients figuring out exactly what they want for the future – key to their financial planning goals.

Typically it ends with setting aside a certain amount of money each month over a period of time – investing it with a particular objective in mind, or getting clients savings that are sitting in the bank working harder than they currently are.

If you have ever read Stephen Covey’s wildly successful book The Seven Habits of Highly Effective People, you may be familiar with his concept of beginning with the end in mind. I have always tried to follow this approach to financial planning, and in my opinion the end goal we all have in common is to retire happily and spend our golden years worry free.

It makes sense to think about what exactly is required to reach this worry-free state of happiness. I have learned that it basically boils down to three things. It doesn’t mean that having these three things will ensure you happiness, but without them it just isn’t possible. In short, they are time, money and health. In financial terms, they are often referred to as “time freedom”, “financial freedom” and “health freedom”.

To have real financial freedom, you need to first determine what your ideal lifestyle would be. This is different for everyone, and of course, it needs to be a lifestyle that can be maintained within your means.

If, for example, you are living a lifestyle that is not allowing your net worth to grow, or at least be maintained, then worry is going to creep in. Having a shrinking retirement pot is the worst thing facing retirees, and I can only imagine the horror that must come with knowing that you will probably outlive your finances.

This is where “time freedom” really needs to be defined. If your time is really free, then you won’t be spending all day worrying about your finances. While those of us who don’t have to punch a time clock may have partial time freedom, hours spent worrying about businesses problems is not really time freedom in its true sense.

Nor are hours spent worrying about stock market gyrations. Health is an obvious one, because all the money and time in the world means nothing, if you are in hospital or too out of shape to pursue active hobbies that can bring you happiness. You don’t need a financial adviser to tell you to eat right and go get some exercise, but you still ought to do it, or you’ll be the richest miserable person in the infirmary.
The other two pillars are best dealt with by building passive income streams from the various kinds of income investments. Unfortunately we are still in a low interest rate environment where most safe income investments pay next to nothing.

High-yielding dividend stocks, even blue chips, place your capital at risk in the next inevitable crash. High-yielding bonds (high only in the relative sense of the word) place your capital at interest rate risk when rates eventually do rise. Rental properties, both residential and commercial, are illiquid. Money market funds give negative inflation adjusted returns.

So how can you retire and achieve this kind of worry-free happiness in the current environment? It’s not easy, but as with every investment environment, this too shall pass. Preserve your capital as best you can by diversifying and balancing out the above risks as much as possible.

Build multiple income streams from a mix of the above investments and avoid doing anything to put a big chunk where there is significant downside risk – that is, the stock market after seven up years in a row, or long-term bonds at the end of a 30-year bull market in bonds. Both of these markets will eventually crash and provide excellent low-risk opportunities. At the moment, patience is still the most important thing required to reach the elusive freedoms that are difficult to obtain in this world.

David Mayes MBA resides in Phuket and provides wealth management services to expatriates around the globe, focusing on UK pension transfers. He can be reached at david.m@faramond.com or 085-335-8573. Faramond UK is regulated by the FCA and provides advice on pensions and taxation.

— David Mayes

 

Get more from The Thaiger

Join the conversation and have your say on Thailand news published on The Thaiger.

Thaiger Talk is our new Thaiger Community where you can join the discussion on everything happening in Thailand right now.

Please note that articles are not posted to the forum instantly and can take up to 20 min before being visible. Click for more information and the Thaiger Talk Guidelines.

Click to comment

You must be logged in to post a comment Login

Leave a Reply

Archiving articles from the Phuket Gazette circa 1998 - 2017. View the Phuket Gazette online archive and Digital Gazette PDF Prints.

Follow Thaiger by email:

Crime5 hours ago

VIDEO: Thieves mess with the wrong gold shop owner in northern Thailand

Thailand5 hours ago

Thailand News Today | Immigration Police to Revise Visa Extension Criteria

Expats6 hours ago

Pattaya visa legend dies of cancer

Sponsored12 hours ago

Where you can get cannabis in Bangkok

Tourism6 hours ago

Transport officials expect tens of thousands of bus travellers in Thailand during three-day weekend.

Phuket6 hours ago

Chinese tourist found dead in Phuket

Crime7 hours ago

Overstaying former pro footballer arrested for hawking lottery tickets in Thailand

Join the conversation on the Thaiger Talk forums today!
Thailand7 hours ago

Twitter investigation discovers mass censorship & blacklisting under previous regime

Thailand7 hours ago

Brief history of the Japanese Onsen in Thailand

Patong7 hours ago

Officials say no to floating lanterns and fireworks on Patong Beach

Protests8 hours ago

Teen protestor claims police harassment

Thailand8 hours ago

Thailand’s Full Moon Party attracts 12,000 tourists

Media8 hours ago

License to own unicorn issued by LA animal care authority

Hot News9 hours ago

Eight celebrities to join Japanese tycoon in space venture around the moon

North East9 hours ago

In northeast Thailand, a pretty camping site is being offered for free

Weather10 hours ago

Flash flood warning issued for 9 provinces in southern Thailand

Thailand1 year ago

Morning Top Stories Thailand | Police to end protests, Human Trafficking | September 14

Thailand2 years ago

Thailand News Today | Thai Airways in rehab, All go for Songkran | March 4

Tourism2 years ago

Phuket’s nightlife. Yes, bars and clubs are still open | VIDEO

Phuket2 years ago

Thailand News Today | Covid passport talks, Thai Airways heads to court | March 2

Tourism2 years ago

Phuket Thai food treats you need to try | VIDEO

Thailand2 years ago

Thailand News Today | Bars, pubs and restaurants ‘sort of’ back to normal | Feb 23

Tourism2 years ago

In search of Cat & Dog Cafés in Phuket Town | VIDEO

Thailand2 years ago

Thailand News Today | Gambling crackdown, Seafood market to reopen, Vlogger challenge | Jan 21

Thailand2 years ago

Thailand News Today | Covid testing for visas, Business impact, Vaccine approval | January 19

Thailand2 years ago

Thailand News Today | Weekend Bangkok bombs, Thailand fires, Covid update | January 18

Thailand2 years ago

Thailand News Today | Stray car on runway, Indonesian quake, 300 baht tourist fee | January 15

Thailand2 years ago

Thailand News Today | Governor off respirator, sex-trafficking arrest, condo prices falling | January 14

Thailand2 years ago

Thailand News Today | Chinese vaccine, Thailand ‘drug hub’, Covid update | January 13

Thailand2 years ago

Thailand News Today | Bangkok may ease restrictions, Phuket bar curfew, Vaccine roll out | January 12

Thailand2 years ago

Thailand News Today | Covid latest, Cockfights closed down, Bryde’s Whale beached | January 11

Trending