Yesterday, in his final piece for The Wall Street Journal, Jonathan Clements shared what he learned from writing 1,008 columns about personal finance in 26 years.
What is the reason for all this saving and investing? The short answer is, you save now so you can spend later. But what will you spend your money on? People dream of endless leisure and bountiful possessions. Unfortunately, after a few months, endless leisure often seems like endless tedium.
That doesn't mean money can't enhance your life. In fact, I believe wealth can deliver three key benefits. The good news: If you are savvy, you can enjoy this trio of benefits even if you don't have great wads of cash. A fat portfolio just makes it all a little easier.
According to Clements, the three benefits of wealth are:
- If you have money, you don't have to worry about it. He notes that this isn't just true for the wealthy. By living below your means, you can obtain a degree of financial control even you aren't rich. Avoiding debt gives you freedom.
- Money can give you the freedom to pursue your passions. What is it you want out of life? What gives you a sense of purpose? These are the sorts of things you want to pursue in retirement. Better yet, try to structure your career around something you love to do. (My wife and I are both doing work we love. It makes a huge difference.)
- Money can buy you time with friends and family. In fact, Clements says, true wealth comes from relationships, not from dollars and cents. Social capital is worth more than financial capital.
In 2006, JLP from All Financial Matters interviewed Clements, asking, “What's the most important thing you have learned since you started writing about personal finance?” Clements replied:
Financial success has very little to do with your ability to pick winning investments. Instead, what matters is stuff people never think about…The ability to delay gratification is critically important. Similarly, a lot depends on maintaining steady employment, staying in good health, avoiding divorce and whether you have children.
I haven't read much from Clements — I've only quoted him once before — but I liked what I read today. Sometimes we become so focused on frugality and saving and investing that we forget about the Big Picture, we forget why we're doing this in the first place.
[The Wall Street Journal: What I learned from writing 1,008 columns]