What Does Money Mean to You? The Questions Investors Should Be Asking Themselves — Part 2
By Brett Carleton, CFP®, ChFC® President & Founder, Heritage Wealth Management
In the first article of this series, I wrote about a question I often ask people when they begin thinking more seriously about their financial lives:
Why now?
For the second question, I want to go a little deeper:
What does money mean to you?
It sounds like a simple question. But after spending decades talking with families about their finances, I’ve found that it can be surprisingly difficult to answer.
Most people spend a significant portion of their lives working, saving, investing, and trying to accumulate more.
But eventually, I think it's worth asking: What is all of this actually for?
Money Usually Represents Something Else
If I asked someone whether they would like to have more money, I suspect most people would say yes. But money itself usually isn't what we're after. It's what money can provide.
For one family, money may represent security—knowing that no matter what happens, they'll be okay.
For another, it might mean freedom—the ability to leave a demanding career, travel more, or spend their time however they choose.
For someone else, it may mean family—helping children buy their first home, paying for a grandchild's education, taking the entire family on a vacation, or simply having more time together.
And for others, wealth creates an opportunity to be generous—supporting a church, charity, community organization, or cause that has been meaningful throughout their lives.
Those are very different answers. And they should lead to different financial plans.
When Does Accumulating Become Enough?
This is a question I've thought about more as I've gotten older and worked with families who have been financially successful.
Most of us spend the first several decades of our working lives with a fairly straightforward financial objective:
Accumulate.
Save more.
Invest more.
Grow the business.
Build the portfolio.
Pay down debt.
Earn more.
Those habits can be incredibly valuable. In fact, they're often exactly what allowed someone to become financially independent in the first place.
But there's an interesting challenge that can arise later. The habits that helped you build wealth can make it difficult to start using it. I've sat across the table from families who have more money than they're ever likely to spend. We can run the numbers and show them that their financial plan is strong. We can stress-test different scenarios. We can account for market declines, healthcare expenses, inflation, and longevity.
The numbers may clearly say: You're going to be okay.
And yet spending can still feel uncomfortable. That's because a spreadsheet can tell you whether you have enough money. It can't necessarily convince you that you have enough.
I've Seen This at Almost Every Level of Wealth
You might assume this feeling disappears once someone reaches a certain net worth. I'm not sure it does. I've worked with families worth tens of millions of dollars who still struggle with the idea of spending. They've spent 30 or 40 years being disciplined. Saving rather than spending. Working rather than taking time off. Thinking about tomorrow rather than today. Those habits don't automatically disappear when a financial plan says you no longer need to accumulate. Sometimes my job as an advisor is exactly what people would expect: encouraging someone to save more or spend less.
But there are also times when my advice is almost the opposite.
Take the trip.
Buy the car.
Help your children.
Take your grandchildren somewhere they'll remember.
Give to the organization you care about.
If we've done the planning and the financial resources are there, sometimes the bigger risk isn't spending too much. It's reaching the end of life with a large balance sheet and realizing you could have done more with it.
Money and Time Are Connected
This has become increasingly important to me personally. Money is renewable, at least to some extent. You can earn more. Investments can grow. Businesses can create additional income.
Time doesn't work that way.
There are experiences that are available to us today that may not be available ten years from now.
Your children are the age they are today only once.
Your grandchildren won't stay little forever.
Your health may allow you to travel, cycle, hike, or explore today in ways it may not someday.
The people you love won't always be around.
That doesn't mean we should abandon financial discipline and spend recklessly. Quite the opposite.
Good planning should help us understand what we can afford to do while we still have the opportunity to do it.
What Do You Want Your Money to Do for Your Family?
For many people I work with, family eventually becomes one of the biggest answers to the question, “What is my money for?”
But even that can mean different things.
Maybe you want to pay for your grandchildren's education.
Maybe you want to help your children buy homes.
Perhaps you'd rather create experiences together than leave a larger inheritance someday.
Maybe preserving wealth for future generations is extremely important to you.
Or perhaps your priority is making sure your spouse will always be financially secure.
There isn't one correct answer.
What matters is making those decisions intentionally. Because if you don't decide what you want your money to accomplish, there's a good chance the default answer will simply become: Keep accumulating it.
What About Giving?
Another answer may be generosity. One of the benefits of financial success is having the ability to support people and organizations that matter to you. And charitable giving can become much more meaningful when it is incorporated into the financial plan rather than treated as something that happens only at the end of life. There can certainly be tax-planning considerations around charitable giving. But I think it's important that taxes remain secondary to the real question:
What impact do you want to make? The tax strategy should support the goal—not become the goal itself.
Your Definition May Change
What money means to you at 35 may be very different from what it means at 55, 65, or 75. Early in life, money might mean opportunity. Later, it may mean independence. Eventually, it may mean family, experiences, generosity, or legacy. That's one reason financial planning shouldn't be something you do once and put on a shelf.
Your investments change.
Tax laws change.
Markets change.
But more importantly: You change.
And your financial plan should evolve with you.
A Question Worth Discussing Together
There's one final part of this question that I think is especially important for couples.
Ask your spouse: “What does money mean to you?”
Then listen to the answer. Don't assume it's the same as yours.
One spouse may see money primarily as security while the other sees it as freedom.
One may feel tremendous satisfaction from saving. The other may value experiences.
Neither person is necessarily wrong. But understanding those differences can explain a lot about the financial decisions you've made together—and some of the disagreements you've had along the way. Those conversations can be every bit as important as discussing investments.
So, What Does Money Mean to You?
If your first answer is “security,” ask yourself what security actually looks like.
If it's “freedom,” ask what you'd do with that freedom.
If it's “family,” think about what you'd like your wealth to make possible for them.
If it's “legacy,” consider what you want that legacy to accomplish.
And if your answer is simply “more,” perhaps there's another question worth asking:
How will I know when I have enough?
That may be one of the most important financial questions of all.
Coming Next: What Are You Actually Trying to Accomplish With Your Wealth?
In Part 3 of The Questions Investors Should Be Asking Themselves, we'll move from what money means to what you want it to accomplish.
Because “I want to be financially secure” or “I want to retire comfortably” may be a starting point—but good financial planning requires us to go deeper.
About This Series
The Questions Investors Should Be Asking Themselves is an ongoing Heritage Wealth Management series exploring questions that can lead to more meaningful financial planning conversations.
Because sometimes improving your financial life doesn't begin with finding a better answer.
It begins with asking a better question.
Disclosure: This material is for informational purposes only and should not be considered investment, tax, or legal advice. Investment strategies involve risk, including possible loss of principal. The questions and concepts discussed in this article were inspired in part by the work and perspectives of David Booth, founder of Dimensional Fund Advisors and author of Stay Calm. Heritage Wealth Management is not affiliated with or endorsed by David Booth or Dimensional Fund Advisors.