It’s not the money but the possibilities

Five loaves and two fish in a basket

When we think about moving ourselves and our families along the path towards prosperity it is easy to start concentrating on the money that we are accumulating, but that would be a mistake.

To quote  Brent Kessel’s famous book title It’s not about the money. Rather it is about the  possibilities that money affords.

 

 

You may say that I am splitting hairs but our attitude towards money is more important than the money itself, which is, after all just a commodity.

It’s good to expand our thinking and I find nothing does that better than the account in the gospels where Jesus’ disciples were faced with feeding a large crowd that had climbed a hill to listen to him speak. On checking their food supply they came up with  five barley loaves and two fish. But when Jesus gave thanks for them and gave them to the crowd they all had enough to eat. Whilst that was a miracle I simply use it to make the point that we should not concentrate on what we have, except to be thankful for it, but to free out thinking as to what we can achieve with it.

A former client some 22 years ago told me that he had decided to retire from a major employer at the age of 55 as he really didn’t enjoy his work. He could get an inflation linked pension of around £7,500 a year and he had an income of around £5,000 a year from some relatively low risk investments. Now whilst that would be around £22,150 a year today that still did not seem very much to provide for an enjoyable retirement for possibly 25 to 30 years and it would be ten years before he receive a State pension.
But he had worked it out. He was single and shared a house with his sister, also single, that they had been left by their parents. They had everything they needed for the life that they wanted to live. The actual amount of money was not important except that it gave him the confidence to live the life he wanted.

It’s not about the money but it is about what has been referred to as financial wellbeing. There is an educational aspect to this. It includes learning how to budget well. It means gaining an understanding of some of the basic concepts of good investing such as diversification; risk and reward and the fact that risk reduces with time invested (the risk funnel). It also includes being aware of our emotional attachment to money and our capacity for losses on occasion (what has been called our financial resilience) and how we deal with the stress of that.

The idea of financial wellbeing originated with Chris Budd’s book The Financial Well Being Book: Creating Financial Peace of Mind. He describes the five elements of financial wellbeing as a clear path to identifiable objectives; control over daily finances; being able to cope with a financial shock; having financial options and clarity and security for those we leave behind.

Money of itself won’t give us the lasting happiness that we desire but we can develop confidence in handling it, however much or little it is. Out of that confidence will come an ability to deal with the difficult situations we will inevitably face from time to time. That is a form of empowerment that is a by-product of our journey towards prosperity.

You might, for example, have always had in mind to retire at a certain age. However, delaying your retirement by a few years might give you a stronger sense of financial wellbeing. The alternative could be to retire earlier as planned but spend the rest of your life concerned about the fact that you are always short of money for what you really want to do.

Another client from the 1990s was a single lady in her eighties. She had more than enough money to live comfortably but was rather cut off from people as she lived in a house down a country lane with no near neighbours. Her estate when she died was to go to a distant relation in Canada that she hadn’t seen for decades and who couldn’t be bothered to get in touch with her.

I was looking for a way of showing her the possibilities for doing something special with a small part of her wealth. She had an interest in music and so I suggested that she give a relatively small amount to her to the local youth band who were always in need of new instruments. It would be considered a large and very useful contribution to them.

She found it difficult to see the point of using her money in this way but I persuaded her that it would involve her in a good local venture and that they would probably keep in touch with her and invite her as a guest of honour along with the usual local dignitaries to some of their concerts. Well she met with the band leader twice at her home and apparently gave him the sort of grilling expected of contestants on Dragons’ Den.

When I met with the band leader a little later he said he had given up expecting anything from her. What a missed opportunity for her. It’s not about the money. But sadly in this case my client could not see the possibilities for money of which she had no need herself.

Once you get your own strong financial foundations in place you will begin to feel financially healthy. For those early on the journey towards prosperity this will involve using life and health insurance to protect those you love in case you aren’t given the time to complete the journey yourself. For those who have successfully journeyed for a long time, I hope you will learn to hold such wealth as you have in an open hand, ready to assist your family and others in need as the occasion permits. You will then be experiencing true financial wellbeing.

Want to see how the UK economy fared compared to other economies during Covid? Then visit my website and see the latest news item Best and worst performing economies during Covid.

Arthur Childs

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