The Big Picture
As we often deal with isolated transactions in our financial lives, it’s easy to get caught up in the minutia of personal finance. It’s important to periodically take a step back and think about things from a broader perspective, at which time we might even realize that wealth ranks pretty low on our list of priorities.
One of the reasons to take a big picture look at wealth is that it is such a broad subject. We need to consider things like savings, investments, real estate, stocks, bonds, mutual funds, retirement plans, college funds, trust funds, insurance, and asset protection just to name a few. More and more people could add P2P loan portfolios from Lending Club to that list as well. The point is that there’s so much to think about that we often just ignore any desires to try to get a handle on everything.
While it’s true that it may be too much to think about all of the financial topics in our lives concurrently, it is important to realize the interconnectivity of many of these topics. For example, we can’t fully understand our savings plans without considering how they are supplemented by retirement and college savings plans as well as insurance. Looking at investments without considering their accompanying risk poses a similar problem.
Of course, there is an even bigger picture than our financial lives to consider, namely how finances play into our overall lives. Most people aren’t looking for financial security for the satisfaction that a stockpile of wealth may bring. Rather, they see that security as a way to enjoy the things that are important to them. There are certainly many more important things in life than money, but building wealth is a means by which to have the time and resources to more fully enjoy those things that are important to us.
Monday, December 17th, 2007 at 5:47 am