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The "Financial Planning Blueprint" Blog

  • Writer's pictureJason Flurry, CFP

We measure GDP but why do we not spend more time evaluating GWB?

One of my many roles as a CERTIFIED FINANCIAL PLANNER™ professional is to keep track of a lot of economic information. Yet, with all of the data that is available to determine financial prosperity, it’s easy to overlook the factors that really make life truly prosperous. With that in mind, maybe it’s time to look beyond the Gross National Product (GDP) and focus more on our General Well-Being (GWB). Consider this excerpt from Bobby Kennedy’s speech at the University of Kansas in March of 1968:

“Too much and for too long, we seemed to have surrendered personal excellence and community values in the mere accumulation of material things. Our Gross National Product…if we judge America by that…counts air pollution and cigarette advertising, and ambulances to clear our highways of carnage. It counts special locks for our doors and the jails for the people who break them. It counts napalm and counts nuclear warheads and armored cars for the police to fight the riots in our cities… Yet the gross national product does not allow for the health of our children, the quality of their education or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials. It measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country, it measures everything in short, except that which makes life worthwhile.”

That was over 50 years ago and with all of the modern advances we enjoy in our daily lives, very little has changed in our financial outlook. It’s kind of sad, don’t you think?

Fast forward a bit to Former Prime Minster of Great Britain David Cameron’s comments in 2006 where he said:

“It’s time we admitted that there’s more to life than money…Our well-being can’t be measured by money or traded in markets. It’s about the beauty of our surroundings, the quality of our culture and, above all, the strength of our relationships.”

Well said, Mr. Cameron.

Consider the source The financial media makes their money by stirring up our emotions so we will stay tuned for the latest news. But, at the end of the day though, most of the “news” is actually just noise. It doesn’t have a material impact on our finances over time, and it can severely disrupt our peace of mind in the short run causing us to miss or overlook the very things that matter most – the things that are right here with us right now… but the ones we are too worried or distracted to notice and appreciate.

Has that ever happened to you?

It sure has for me. In fact, I think everybody’s experienced this kind of stress at one point or another.

That’s why, with our private clients, we often discuss the difference between “risk-adjusted returns” and “stress adjusted returns.” It can be easy to get so focused on your goals, in reaching the destination, that you miss out on the joy that comes from the journey in getting there. It’s one thing to make enough money to be financially secure, and of course there’s likely to be some stressful moments and anxious seasons along the way as you strive to get there. But, if you reach all of your financial goals but in the process ruin your health or the relationships with those you care about the most, having money only can make you feel very alone and empty.

I’ve seen far too many times were people have been successful financially and realized how unsatisfying accumulating money just for the sake of having it can be. I’ve also been quoted in the media as saying, “Money makes a great servant, but a horrible master.” I made that comment in regards to the pressure and stress someone feels when they’re in debt. If you’ve ever been there, you know that having debt can make you feel like a slave and money can be a ruthless master. Surprisingly, though, it works the same way when you have a lot of money too. Money by itself doesn’t bring lasting happiness, and if it causes you to worry about losing it or keeping up with the things money can buy you, its influence in your life can be just as damaging to your peace of mind as if you didn’t have any money at all.

The right perspective It’s ironic that the very thing that people desire oftentimes doesn’t bring about the sense of purpose and security they longed for and sacrificed for in the pursuit of it. Stephen Covey said it’s like climbing the ladder of success only to realize that it’s been leaning against the wrong wall. When you have the proper perspective on money and its role in your life, you see it as a tool that can be used to provide for your family and bless others. And, when you view money and wealth in a healthy way, it can greatly increase your General Well-Being, even during difficult, volatile times when everyone else is losing their peace.

Financial markets will fluctuate and that volatility is good since it helps keep markets operating more efficiently over time. Sure, it’s been a long time since we’ve had a true bear market where the averages drop 20% or more. And, as much as I like to see markets go up just like you do, we have to remember that there will be times that are difficult to endure financially and emotionally. Market drops in nasty bear markets will come. They always do. And, even though we know they’re going to come, they can still catch us by surprise and greatly upset our general well-being.

Before the next market downturn robs you of your peace and joy, I want to encourage you to step away from the markets, your statements, and your financial plan long enough to give some much needed attention to your life plan. There’s more to a life well lived then just accumulating wealth, and as I’ve mentioned before, it’s important to remember that we are all living a legacy that extends well beyond our financial resources. Make sure you are living one that’s worth leaving.


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