Having been raised in a Judeo-Christian household, I used to define karma with reference to “sin.” For example, karma is my sins coming back to haunt me. 

Over the last year, I’ve learned a wider definition that goes like this… historical and current choices result in the life I have right now. I prefer that definition as it reminds me that I change the future with decisions today. At 43, our family’s balance sheet is an expression of my financial karma. 

I grew up in Canada, a country where there’s a social contract. The system isn’t perfect but it works for many Canadians. Living in the US, most prefer a model with greater self-reliance. Both systems have their strengths and create different incentives.

The book I referenced last week, makes the point that, historically, people relied on family, rather than government. What are the areas where family support can assist, without screwing up incentives?

• Health care
• End of life care
• Facilitate interaction between family members
• Facilitate education by family members
• Appropriate third-party education

As a young man, being an aggressive saver made me happy. I have no idea why, likely a habit that was built from a very young age. With three kids in my house, my desire to sacrifice today, to enable security tomorrow, remains strong. At a deep level, it feels like the right thing to do.

Boulder is an environment with a lot of financial wealth. The focus in Colorado isn’t as consumption-centric, as my previous homes in London and Hong Kong, but my reality is a far more expensive life than what I had created in New Zealand. 

Part of my annual review is asking myself the question, “Am I getting value for money within my current life?” Being honest with myself, the answer is “not yet.”

A key part of this year’s review has been completing a five-year plan to get my family to cash flow breakeven. When I became unemployed at the end of 2008, I gave myself a pass for five years to take stock and see what happened. The four year anniversary of that decision is approaching and I have a good idea where I want to take the family.

Long term, I have been considering the life I want to live in front of my kids. A parent’s life choices are powerful lessons on effort, consumption and strategic management.

I see a benefit to the kids of taking my consumption down. Expectations management is something the Kiwis do very well. All my pals in Christchurch understand the relationship between work-results-satisfaction. It is a very grounded society and I enjoyed my time there.

Consider:

• What are the most useful elements of financial wealth?
• What does my life say about my attitudes towards wealth?
• Are my current choices aligned with my family values?
• How best to give my kids a chance to be successful: in their own terms, relative to their peers and relative to myself?

I’ll end with book recommendation: Wealth in Families by Collier. Another title that is valuable regardless of your net worth – the sections on anchors and family management contain a lot of good questions for parents to consider.

I measure true wealth in freedom.