Friday, 2 March 2007

Key Decisions that Affect Future Wealth

While we often focus on the stock market and our investment decisions as those that will most affect our future wealth, as I look back and around me, it seems that two other decisions we make during our lives have far more influence. I note in advance, to avoid getting into trouble at home, that neither of these decisions should be made exclusively or even primarily as financial decisions. It is true however that they both inevitably have a very large lifelong financial impact. My comments are descriptive, not prescriptive!!!

  1. Career Choice - over a lifetime, the difference in income between a Zeller's cashier and a dentist adds up to quite a lot. Without going into the details of which career pays best, suffice it to look at the simple arithmetic of a lifetime of earnings, which has conveniently been made into a neat table by the Fiscal Agents website. Of course, choosing a career simply for the pay is likely to lead to stress, burnout and eventual abandonment. On the other hand, you get the opposite when your make a good choice - fun and fulfillment, which I would maintain is a non-financial form of wealth.
  2. Spouse - pick the wrong person and you can have years, maybe a lifetime of misery, financial and otherwise. Think of divorce, its causes and its consequences. Pick the right person and it's the opposite - a lifetime of emotional happiness, of course, but this spills over into financial success. Not that the spouse brings a pile of money into the marriage but the support from a trusted advisor to not waste, to spend wisely, to invest wisely whatever money is earned makes a huge difference. Investing one's time, effort, love and attention in a marriage brings a very high rate of return. And a stock holding is just a number on a printed sheet, not very huggable. ;-)
In my case, the spouse element has been predominant in whatever financial success I have achieved. Would be interested to hear anyone else's views.


Anonymous said...

I think you are right about the spouse theory. My previous partners (hear me, this sounds as if I have a large collection of them - actually, it's about my husband whom I am divorcing, and his predecessor, whom I did not marry) both of my previous partners cannot keep money in their purse - one of them works in a bank and is actually well aware of the dangers of overspending - the other one was waiting for the money we would inherit from my and his parents (why save money ? in a few years time we'll have plenty of it - which I personally doubted - to realise our dreams)

MB (Belg)

CanadianInvestor said...

One of my female relatives was set back in financial terms at least 15 years by a spouse of the kind you describe. Though there were other good qualities in that person, ultimately his bad financial habits were a key factor in undermining the relationship to the point where it had to end. Maybe it's worthwhile to listen and watch the reaction of close friends and family who are in a more dispassionate frame of mind to a potential spouse? Don't we ask about which car, which computer, which clothes, which vacation spots, which everything, of people we trust and who have nothing to gain except watching us become happier in every way? One of the things that gives my new wife and I such confidence in our new relationship is that we immediately seem to like and enjoy each other's lifetime friends and family, and they each other when they meet from both sides of the Atlantic. Now, if only I could figure out what kind of gifts were likely to succeed .... ;-) Best of luck to you.

Kamakura Kid said...

Well I agree with the thoughts within this article, I took a second look when the largest expense was not mentioned. I am wondering how having and supporting children over the years places a drain on the funds? As my friends are paying rather large vet bills for their pets as well as the day to day costs, this too is a question to ponder. Taking the emotion out of these numbers would lead to an interesting conclusion. I have an RSS subscription to your blog, time is money you come to me.

Cheers, Steve
Victoria, BC

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