You can find my Part One here and Paul’s thoughts on Part One here.
#3 – What are the other things in life that are critically important to me, and for which I will be financially responsible?
This is a great question.
Be sure to run your answer by your therapist.
Because people that are high-achievers and good savers tend to take on responsibilities outside of their domain. I’ve watched families make themselves miserable by taking ownership of the financial wellbeing of adult relatives.
What’s my financial domain? Myself, my spouse and my minor children.
Watching people that I love struggle is no fun at all. However, I respect the people that had the courage to let me suffer as a result of my own choices.
#4 – What are the risks in the universe which may prevent me from fulfilling my responsibilities to myself and to others, and how might I defend against them or at least mitigate their impact?
Another great question!
- Death and permanent disability, while living with minor children
- How can I insure my family’s human capital
- Litigation – fear of losing it all
Humans are lousy at assessing risk and statistics. An excellent investment you can make is reading Taleb’s Antifragile – please don’t use the book as motivation to set up a personal derivatives strategy!
Pro Tip: use insurance products to insure an identifiable risk, not make investments.
#5 – If I have accumulated wealth that exceeds all of the above requirements, how might I best utilize that wealth to derive the most personal satisfaction available from life?
It’s a shame that it takes so much money for people to realize they had won before they even started.
Value your time, more than your money.
Diversify your time towards helping people that have less of what you think you need. Specifically, teach what you’ve learned.
Improve your family’s human capital, starting with your health, your manners and your gratitude to the society that enabled your success. Start with small, simple changes:
- Physical movement AM and PM
- Get strong
- Eat real food
- Be a little more kind
- Be a little more fun
- Optimize your health markers via diet and exercise (blood pressure, cholesterol, blood glucose, body composition)
If you are a self-made person then love the people closest to you by ensuring that they have the opportunity to prove their self-worth via their own initiative and through their own passions. Tell your kids when they impress you.
Be willing to constrain yourself to create harmony within your family and community.
Laugh out loud.