The Dimensions of Independence

The major objective in comprehensive financial planning is financial independence. But true personal independence has many dimensions beyond money.

 Depending on educational achievements, a young person will enter the workforce generally between age 18 and 22. Per a 2011 report from Pew Research Center, the average age for marrying for women in the U.S. is 26.9 years; men, 29.8 years. Assume that many people don’t start seriously focusing on the future from a financial and life planning perspective until they are in their thirties. For most, their target for retirement is in their sixties. We may assume a three decade time span for people to get serious about and achieve true personal and financial independence. If you think 30 years is a long time, ask a 70 year old how fast time flies.

 Over 30 years you may move a number of times, own several houses, have a variety of jobs, even multiple careers. You may get married, or remarried. You may have children with educations and other life events to fund. You may suffer setbacks such as divorce; health challenges; loss of a loved one such as a spouse, child, or parent; job loss or career reverse. As John Lennon sang, “Life is what happens to you when you’re busy making other plans.”

 So you have 30 years—40 years tops—to secure your financial and lifestyle independence. Make sure from the get-go that you have adequate financial reserves to deal with life’s surprises. Have adequate insurance to cover loss of property, liability, health and/or long term care needs, disability, loss of life. Establish a Freedom Fund—enough liquid investments to sustain you and your family for at least a year, and eventually three to five years, with no income. Keep debt under control. Resolve to have your home paid for by your retirement date. Freedom from worry is Step One.

 If you start a business, structure it so you have a life...a business that brings meaning and purpose to you and your associates. Build your business around your life; do not build your life around your business. Your family will thank you for that. That also goes for your career choice, even if you are not an entrepreneur. That may include being a stay-at-home parent. Raising children is not a sideline job. That should be discussed before the wedding.

 Figure out how to make your business profitable, how you will grow it and sustain it. Eventually you must strategize a succession plan, how to extract value from the enterprise you are building.

 Don’t forget the spiritual side of meaning and purpose. You work,  you grow older, you retire, you die. Then what? Recently I read of a very wealthy atheist who committed suicide. Nothing to live for or die for?

  Dan Sullivan, The Strategic Coach, urges his pupils to “always make your future bigger than your past.” If you have faith and believe in an afterlife in the presence of God, your future is bigger than your past—even on the day you die! The greatest success you can ever hope for is to hear, “Well done, my good and faithful servant!”

 A key dimension to independence is fitness and health. What good is wealth without health? Annual physicals and checkups are common sense, as are little things like flu shots and Shingles shots and other  immunizations. Join a gym. Hire a personal trainer. Run, bike, hike, play sports...whatever gets your heart rate up and builds stamina and muscle tone. The Dutch in Rembrandt’s day thought that being  rotund was a sign of wealth. Wealthy perhaps, but not wise.

 Speaker and writer Matthew Kelly urges you to become “the-best-versions-of-yourself.” What good is financial success if your relationships are a wreck? Do your relationships add or detract from Kelly’s manifesto? What can you do to be a better example, leader, spouse, partner, father, mother, sister, brother, friend, mentor, grandparent, teacher, employee? How do you overcome a disability or setback to be the best-version-of- yourself?

 True independence goes well beyond money. Self-discipline and self-responsibility are the twin pillars of personal freedom and achievement. Life...an amazing journey!

 Walker Capital Management, LLC, Lewis Walker is President of Walker Capital Management, LLC.  Certain advisory services offered through The Strategic Financial Alliance, Inc. (SFA).  Lewis Walker is a registered representative of SFA which is otherwise unaffiliated with Walker Capital Management, LLC.  lewisw@theinvestmentcoach.com