“Always keep your portfolio and your risk at your own individual comfortable sleeping point.”-Mario Gabelli
If you have any kind of financial investments and are working towards a secure financial future, then you probably have a portfolio. A portfolio is a grouping of financial assets such as stocks, bonds, and cash equivalents. If you’re like me, you have one, some investment company manages it for you, you stare at a few pie charts now and again on a website, and either celebrate briefly or become depressed. I’m sure there are many others of you that know exactly what is in their portfolio, what all those percentages and colored pie charts indicate, and understand the nuances of phrases like “asset allocation” and “diversification”.
Many Americans obsess over retirement, their future economic solvency, and if they will have enough money to live comfortably from the time that they retire to the time that they expire. Hopefully, their portfolio will help them enjoy the kind of lifestyle that they desire and deserve during those so-called “golden years.” Diversification of their financial portfolio is certainly important towards the achievement of that goal. Having diverse and varied financial investments safeguards and protects one’s assets, hedging your bets and making a sound future more likely.
But what about other aspects of your life? There are a lot of different components to your life and lifestyle that probably don’t get as much thought as your finances. Could your life be better if you considered and managed the various components of it with the same thought that goes into your finances? Shouldn’t we all strive to manage our lives in this same thoughtful manner? Is it possible that we could enjoy life a little bit more, hedging our bets a bit to protect our physical, emotional, and spiritual wellness?
A big part of the work that goes into wellness and physical and emotional health is a person’s lifestyle. The reality is that all of us have different and diverse roles, relationships, and hats that life forces us to wear. Most people coast through life reacting to whatever comes up as it shows up. People who are aware of these different roles and obligations are less likely to be blindsided, surprised, or overwhelmed when life throws them a curveball. They are often people who do a lot of different things, have a lot of diverse friendships and relationships, and are able to switch gears rather comfortably when life requires it. They also tend to be more resilient when one of these roles, friendships, or obligations is suddenly taken from them. They can lose a part of their portfolio and not have their entire life and self image collapse.
How can one diversify their life portfolio? Sometimes the similarities between a financial advisor and a coach or psychotherapist are pretty similar. The financial advisor takes a look at all the assets that you have and where they’re allocated – adjusting, advising, and spreading them around for economic safety. A coach or psychotherapist takes a look at your personal assets such as physical, emotional, spiritual, relational, and occupational. They find what a person truly values and works with them to balance these assets in such a way that the client is comfortable, creating a life portfolio that serves them. Unlike a financial portfolio that is in place for your golden years, a person with a well-managed life portfolio gets to benefit from it immediately, no need to wait to age 65 or beyond. Successful management of an emotional portfolio ensures immediate benefits today and compounding benefits over time.
A sound life portfolio also provides a type of “life insurance” which a person can draw on immediately, no death required. People who are able to balance their life and obligations tend to be more resilient when one or more aspects of the their life portfolio is interrupted. For example, if someone loses their job unexpectedly, their ability to bounce back from this challenge is going to be better if they have resilience which comes from diversification. Yeah, it’s going to suck for a while, but they have family and friends that are supportive. They have activities, hobbies, interests, and other things that will give them self-worth while they figure out what to do next. If someone has built their life around their job and that job has occupied too much of their identity, dignity, and self-worth, then the loss of the job becomes devastating. Naturally, losing a job is never going to be easy, but a person with a diversified portfolio of people, relationships, and interests is going to be more capable of bouncing back.
We’ve all heard stories of couples who put too much of their life portfolio into being parents. You know the story well. That couple that seemingly had it all together raised some great kids that went off to college. When they became empty-nesters, they realized that they no longer had anything in common except those kids. They allocated too much of their life portfolio in the parent category, and when that was taken away things collapsed.
And then there’s the story of the guy who worked 70+ hours for 30+ years, 51 weeks a year. He provided financial security for his wife and family, giving his kids a great lifestyle and educations. Unfortunately, he didn’t get along with his kids while they were growing up. The kids didn’t have the emotional perspective to see how hard he worked, feeling that work was more important to their dad than they were because he was “never home.” I am sure you can see where this went wrong.
Or how about the former athlete who was “gonna turn pro,” but got injured and never made it? Or the prom queen who put too much of her emphasis on her looks rather than her relationships? Go to any cheap neighborhood bar in the country and you’ll find people like these sitting on bar stools trying to recall their glory days. Maybe a little diversification of the life portfolio would have made their lives a little bit better.
A measuring point for how well your life portfolio is diversified is to ask yourself some painfully difficult questions. If I lost_________ who and what would I be? Who or what would be there to help me? Who and what are the most important things in my life? When you’re taking that long and arduous commute to work Monday morning, ask yourself “Why am I doing this?” Initially, you’re probably going to say that you do it for the money, but “follow the money.” What’s the money going to do? Who or what do you hope to spend this money on? What emotional, physical, and spiritual benefits will the spending of this money bring you? You don’t want to be that stressed out executive whose wife and kids live comfortably in that $750,000 home who hate him because “he’s never around” or is “unavailable.”
Take a moment some day and sit down and ask yourself these questions. You can do this yourself, or get some direction and guidance from a coach or therapist. If you doing this as self-help, write it out on paper and take a look at it when you’re done. This portfolio is far more important than that financial one that your building and the good news is that you don’t have to wait to retirement to draw the benefits. And, the interest on these investments compounds daily.
“When you comin’ home, Dad.
I don’t know when, but we’ll get together then.
You know we’ll have a good time then.” – Harry Chapin
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