Financial wealth and happiness

Feel free to reach out to PSG Wealth adviser Leon Ferreira directly.

First, you should have put something aside for retirement; second, don’t withdraw too much; third, the capital should be invested wisely; and finally, the megapower of compound growth should be at work.

We have diversified clients’ investments appropriately for income, protection, and growth, as well as diversifying them offshore as exchange control rules have been relaxed.

Despite the geopolitical turmoil, 2023 has been a good year for our clients, with the US bourses performing strongly, driven by the large tech companies in particular. By nature, stock markets are volatile and unpredictable, and the next correction or bear market is always round the corner.

However, it is very interesting that although bear markets are a common phenomenon, they occur much less frequently than bull markets. And the downturns are smaller in size and shorter in duration than the upturns and duration of bull markets. In the graph below, the recent bull market seems to be in the early stages?

The value of a financial adviser

The value of financial advice is well documented. Montmarquette and Viennot-Briot indicated that advised households accumulate 290% more assets (i.e. almost three times more) over a 15-year period than non-advised households do.

Russell Investments in US recently published research showing that the behavioural management aspect of advice alone is worth 2.02% for investors. Adding other dimensions such as rebalancing, product alignment and tax planning increases the value of an adviser to as much as 4.83% per annum.

Are you happier than most people?

The biggest reward for me, as a financial adviser, is to be able to tell clients they don’t have to worry about their financial wealth but can focus on happiness (i.e. contentment, not luck).

Scientists have designed a test establishing that you are happier than most people if you agree with the following statements:

1. You are managing your finances well and live within your means. You have enough money to do what you want.
2. You set and reach goals on a regular basis.
3. You make time for outings or trips together with friends and family.
4. You are applying your strengths every day to excel at what you are doing.
5. You feel safe and protected in your community.
6. You learn something new or interesting every day.
7. You have someone in your life who is encouraging you to live a healthy life.
8. You follow a healthy diet every day.
9. You eat five portions of fruit and vegetables at least four times a week.
10. You have been recognised in the last 12 months for your assistance in enhancing your town or environment.
11. You don’t smoke.
12. You have a normal, healthy weight.
13. You visit the dentist at least once a year.
14. You exercise for a minimum of 30 minutes at least three times a week.
15. You are active and productive every day.

The writer E.B. White said, “I arise in the morning torn between a desire to improve (or save) the world and a desire to enjoy (or savour) the world. This makes it hard to plan the day.” The key is to find that sweet spot between savouring life now and doing things that lead to a richer, more meaningful outcome in the future.

With credit to Momentum.