As you begin to build wealth and save for the future, it’s easy to get caught up in the negativity of the media, the ups-and-downs of the stock market and the never-ending advice from your friends and family. So how do you balance building wealth with living a fulfilled life?
In the last six years, the stock market has gone from a low of less than 7,000 on the Dow back in 2009 to the 17,000 level today. This kind of runup in equities has created a lot of healthy investment portfolios.
So now is an excellent time to focus on building wealth, and a life, outside your portfolio.
Use Your Portfolio to Uncover More Options
If a growing investment portfolio does nothing else, it should create more options in your life. It should give you breathing room to do the things you really want to do in your life, by providing a level of flexibility that may not have existed during leaner times.
Even though an investment portfolio is typically filled with a large number of risk-type assets, it also becomes something of a safety net. The larger your portfolio is, the more room you have to make mistakes in other areas of your life. After all, your portfolio is there to back you up in the event things don’t go the way you expect.
This can free you up to take more chances in virtually every area of your life. A large portfolio may mean you don’t have to work quite as hard to earn a living, or you might even be able to cut back some on how much money you save every year. All this opens up options in both your budget and your schedule.
A large and growing investment portfolio should enable you to invest in other areas of your life.
What Do You Really Want to Do With Your Life?
When you started out in your career field, it may have represented the kind of work you wanted to do. But as is often the case, somewhere along the way your initial purpose — that drive to keep going — disappeared. Millions of people today are simply going through the motions at work.
This is a major area in your life where a solid investment portfolio opens up options.
As your investment portfolio grows, your dependence upon your income should begin to lessen. If you don’t need quite as much income as you once did, this could open up the doors to making a career change into a field you might really enjoy.
The downside of this kind of transition is it usually involves a reduction in income. This can happen either because you are starting in a new field as the “low man on the totem pole,” or because the career is part business and part hobby. Either way, the financial independence and flexibility a large investment portfolio provides could open the door to just such an opportunity.
If you have been pleased with your investment portfolio performance up to this point, this might be a good time to begin considering career options. Your investment portfolio should provide you with this type of flexibility. And this new career you didn’t dare enter before could enable you to earn more money than you ever dreamed, simply because it’s something you enjoy doing.
Focus on the Non-Financial Side
There comes a point in everyone’s life where we should be asking the question, How much is enough? If you have a $500,000 investment portfolio, how much better will your life be if it grows to $1 million? The answer isn’t always clear.
Money is far from the only factor guiding our lives. Time is another, and it is at least equally important. So is effort. So the question then becomes, Will the greater happiness achieved by doubling your investment portfolio justify the time and effort required to make it happen?
Somewhere along the line, you have to recognize both time and human energy are limited commodities. Recognizing this fact, you may decide to “diversify” your time and efforts into other endeavors, including those that have nothing to do with money.
If you have had a good run in the stock market over the past few years, now is an outstanding time to redirect your attention to other critical areas of your life.
For example, you may decide to invest more time and effort into your marriage, your children, your health, your friendships, or any charitable pursuits you may have been minimizing or neglecting during the years you were building your investment portfolio.
A large and growing investment portfolio should free you up to do all of these things.
Create and Enjoy New Adventures
If you are struggling to survive, you probably won’t have the time or money to simply have fun. Your time and energy will be soaked up in the pursuit of survival. But if you have built a credible investment portfolio, it can be a sign it’s time to kick back and relax. At least a little bit.
Everything we do in life of a financial nature should carry the goal of improving our quality of life. If an investment portfolio doesn’t help you to do this, then it may have become an end in itself. The constant pursuit of higher financial numbers for no practical purpose is a dead end.
As we said earlier, an investment portfolio should help free up your time and your money to do what it is you truly want.
Right now is an excellent time to begin having some adventures in your life. It could involve travel, taking on challenging new hobbies, or even creating an entirely new lifestyle — one you’ve only dreamed of in the past.
None of us knows how much time we have in life or what the quality of this time will be. If your investment portfolio is doing well, then at least some time, effort and money should start going into building a more enjoyable life.
That should be the ultimate purpose of an investment portfolio anyway!