A Lesson From My Youth

I was young – in my early 20s, fresh out of college, earning what everyone in their 20s does, barely enough. A few of my friends were talking about a European trip in the summer, and I decided I would forgo savings to build a fund to go with them. Months went by, and I stashed away money where I could – but I remember worrying that I was screwing up. I knew saving money while I was young was super-important, that time was on my side, that I needed to let the market and compounding work their magic. A little voice in my head kept telling me I was almost certainly costing my future self an untold chunk of change.

We have books, charts, PowerPoints, folders, whiteboards, articles, blogs and websites all telling us what the perfect formula is to save for retirement. Save this much for this many years, get a little bit lucky as to when you were born, get the average market return and stick to your plan through the bear markets, and you will come out the other side with enough money to live comfortably in retirement. If I skip a $5 latte every day, pack my lunch, go out a little bit less with my friends – maybe even forgo a certain trip to Paris – I probably increase my chances of success.

But you know what? If I went back in time, I’d do it again – even with all my knowledge of compound interest. There are lessons I want to teach my younger self about credit card debt, setting goals and being a better person, but there is one thing my younger self can teach me. If I listen hard enough, I can hear him whispering in my ear:

"Michael, for God’s sake, work out more – you look like a pile of melted ice cream. Also, life isn’t experienced on a balance sheet, it’s not crafted with a formula and it’s not about making the optimal financial decision at every moment. It’s about time spent with family and friends, experiencing what the world has to offer, laughing, crying, saving, spending, sitting at a corner bistro sipping a glass of Bordeaux while listening to French accents fluttering through the air."

My advice to you would be this: Trade some of your older years for some of your younger years. Don’t be so hyper-focused on saving that you forget to live.

Yes, we need to acknowledge the trade-off here: You are forgoing what could be a significant chunk of money later in your life to do what I did, and that decision might not be best for every single person reading this article. In fact, your Financial Advisor might grumble, “Wait, you told them to go to Paris?” But the very best advisors know when to say, “Let’s visit the Champs-Elysees another time,” and when to tell them, “It’s OK – go enjoy the fruits of your labor.”

Good wealth management, the kind we practice here at Baird, is about making the best decisions we can in an uncertain world. Controlling our spending, investing for the long term, avoiding noise and focusing on our goals are all part of that process – but so is living, embracing our time here and experiencing things that bring us deep, meaningful joy. I’ve heard this said before and it’s something I think about all the time: Don’t die rich – live richly.