“Maximizing returns” is a phrase that you’ll hear bandied about ad nauseam on both Wall Street and Main Street.

As in, “My goal is to maximize my returns.”

Is it though? Is that really the goal?

Bronnie Ware would beg to differ. More on her in a moment.

Personally, I can’t remember coming across anybody who I would have surmised to be living a full, peaceful, and centered life around the primary goal of maximizing their returns, and it’s pretty easy to see why. There can always be greater returns somewhere, and odds are that if you look hard enough, you can find someone who got them.

An alternative phrase that I have been continually encouraging clients to consider involves the idea of “minimizing regret.”

“How do I minimize regret?” feels like something that you can answer in much greater capacity and with a much more satisfying journey than the question “How do I maximize returns?”

This is true in investing as well as in life.

Back to Bronnie. Ms. Ware is an Australian nurse who spent several years working in palliative care, caring for patients in the last 12 weeks of their lives. On her own path, she decided to record her patients’ dying realizations in a blog, which garnered such praise that she put her observations into a best-selling book called “The Top Five Regrets of the Dying.”

Ware writes of the amazing clarity of vision that people gain at the very end of their lives, and how we might learn from their wisdom. The following is a summary of her patients’ collective top five regrets (quoted material is from her book):

1. I wish I’d had the courage to live a life true to myself, not the life others expected of me.

“This was the most common regret of all. When people realize that their life is almost over and look back clearly on it, it is easy to see how many dreams have gone unfulfilled. Most people had not honored even a half of their dreams and had to die knowing that it was due to choices they had made, or not made. Health brings a freedom very few realize until they no longer have it.”

2. I wish I hadn’t worked so hard.

“This came from every male patient that I nursed. They missed their children’s youth and their partner’s companionship. Women also spoke of this regret, but as most were from an older generation, many of the female patients had not been breadwinners. All of the men I nursed deeply regretted spending so much of their lives on the treadmill of a work existence.”

3. I wish I’d had the courage to express my feelings.

“Many people suppressed their feelings in order to keep peace with others. As a result, they settled for a mediocre existence and never became who they were truly capable of becoming. Many developed illnesses relating to the bitterness and resentment they carried as a result.”

4. I wish I had stayed in touch with my friends.

“Often they would not truly realize the full benefits of old friends until their dying weeks and it was not always possible to track them down. Many had become so caught up in their own lives that they had let golden friendships slip by over the years. There were many deep regrets about not giving friendships the time and effort that they deserved. Everyone misses their friends when they are dying.”

5. I wish that I had let myself be happier.

“This is a surprisingly common one. Many did not realize until the end that happiness is a choice. They had stayed stuck in old patterns and habits. The so-called ‘comfort’ of familiarity overflowed into their emotions, as well as their physical lives. Fear of change had them pretending to others, and to their selves, that they were content, when deep within, they longed to laugh properly and have silliness in their life again.”

I’ve observed that one of the fortunate consequences of this rather unfortunate situation we all now find ourselves in is that it has allowed many to reflect a bit more on their lives in two distinct ways: to look back at some of the things they may have taken for granted, but also to look forward and reexamine some of the goals they would like to accomplish.

With any bear market – regardless of the circumstances associated with it – comes a reassessment of people’s tolerance for risk.

As you know, we believe in building a portfolio allocation based on your A) need to take on market risk (ascertained by building out detailed goal-attainment projections), B) willingness to take on market risk (more art than science), and C) ability to take on market risk (the time horizon between your age and the desired timing of your most important goals).

I’d like to quickly address variables A and B.

Let’s say we run a plan and we determine that you have a 90% chance of successfully meeting your goals with a 70% allocation to stocks. Let’s also assume that I can construct an alternate portfolio where you also have a 90% chance of success, but with only a 55% allocation to stocks. You reflect on these two options, and you decide you’d like the 70% allocation to stocks.

This is where I would gently ask you, “Why?”

Now, you may say something like, “You know, I’ve listened to you over the years, and I’ve concluded that I am more afraid of the insidious erosion of purchasing power over time than of the long-term risk of owning equities, and I believe equities give me a much better chance to fight that erosion of purchasing power than fixed-income bonds. Also, I have a stomach of steel, and do not worry at all about how I’ll feel when the inevitable bear market returns and, hopefully for only a short period of time, negatively impacts the value of my portfolio.”

If you said that, I would say, “Eloquently stated. You’re allocated with your eyes wide open, and you’ve weighed multiple uncertainties of life in an appropriate way for you.”

But if you said in so many words that you’d rather the higher allocation to stocks because you want to get better-expected returns, I would encourage you to look through the lens of “regret minimization” as much as you’re looking through the lens of potential “return maximization.”

While the need and ability to take on market risk will change as your goals evolve and as time marches on, it’s the willingness to take on market risk that has been most affected by our current experience. Tolerance for risk is a funny thing, and as I said, it’s often more art than science. We need to be aware that each and every one of us will perceive risk differently when the sun is shining versus when there’s a pandemic outside our window. You see, it’s oh-so-easy to overestimate your tolerance for a risk that you can’t see or can’t imagine.

But the reverse is also true. It’s often difficult to see the projected reward of a risk when that risk is right in front of you but the reward is miles down the road.

It’s OK to admit that your tolerance for stock market volatility might not be what you thought it was. It’s always OK to reassess; no, it’s more than OK – it’s wise. That said, your wealth advisor will encourage you to think through the multitude of risks that may lie ahead, not just the one in front of our faces.

It’s very difficult to be objective and unemotional about your own situation during extremely stressful times. When outcomes are uncertain and the stakes are high is when all of our behavioral glitches seem to peak. And this is a major reason why an objective advisor can be so valuable. Our goal is to help you deeply understand your own personal need, willingness, and ability to take risk. Many of these discussions are rooted in academic science, but not just investment science. We are all human, so behavioral science also plays an important part. What good is a solid academic plan if you are emotionally uneasy for much of the journey?

We work our hardest to help you build a financial plan designed with your fullest life in mind, whatever that particular phrase may mean to you. These conversations are often successful; other times they’re a work in progress. But I, for one, will keep at it, as nothing fulfills my life more than helping others fulfill theirs.

It’s never too late to minimize regret. It can start today. Often, minimizing regret requires no money at all, simply a change in mindset and action.

By clicking on any of the links above, you acknowledge that they are solely for your convenience, and do not necessarily imply any affiliation, sponsorship, endorsement, or representation whatsoever regarding third-party websites. We are not responsible for the content, availability, or privacy policies of these sites and shall not be responsible or liable for any information, opinion, advice, products, or services available on or through them.

© 2020 Buckingham Strategic Partners^®

During this pandemic, you may have family or friends whose health has been directly affected by COVID-19. And the longer you live, the more people you know will face significant health concerns. Making sure you and your family are prepared for these situations – now and in the future – is an act of kindness.

If you have ever been responsible for helping someone deal with medical issues, perhaps in the hospital, you know this is not easy. You need to be able to work in tandem with your friend or family member – now patient – and their physicians for the best outcome. With the current virus situation, there are many restrictions on who is allowed into a hospital. I have two personal friends whose spouses recently died in the hospital without any family being able to visit.

Health issues can emerge suddenly and without notice. Consider, for instance, the onset of dementia. A person who had great intentions of getting their “ducks in a row” may now have his or her capacity to do so diminished.

No one likes to think about their own mortality, but it is practical to do so. Find a family advocate that will be there when you need them. If you are unable to help yourself, you want that person to understand your wishes. Document your wishes in writing and give copies to your advocate and your doctors.

Advance directives generally consist of a medical power of attorney and a living will, often combined into one document. These documents let your family and physicians know what medical treatment you want (or do not want) if you are unable to express your own preferences.

A medical power of attorney names a person to make medical decisions for you. You can limit the power this person has in the document. A living will allows you to approve or decline certain types of medical care, generally if you have a terminal illness or injury. You can determine which “life-sustaining” measures should be taken on your behalf, including do-not-resuscitate instructions.

Having these conversations and forming written plans is a gift to your family and friends. Another gift to family and friends is telling your story. Family history is often lost if it is not documented. Today’s technology makes this easier than ever, and you can create an audio or video recording that is uniquely you.

You have a legacy to leave that is not related to your assets or net worth. This can be your philosophy on life, or what mattered to you the most. Maybe you want to talk baseball with your grandson and leave him your favorite mitt. Perhaps you want to encourage your niece to pursue her dream of becoming an astronaut. Letting people know what causes you to cherish can help them carry on your charitable intent.

Other considerations to discuss and document are organ donation and funeral instructions. Some people even write their own obituary. Of course, you can leave this all up to the friends and family who survive you, but they will be much happier knowing your end-of-life services are what you really wanted.

Your age does not matter when it comes to getting your plans in order. If you are younger, you may revise your plans several times over the years. But you simply never know when you may get a terminal diagnosis or have a sudden accident while driving to that UW football game.

Having these conversations for yourself and your family is worth the time and effort, and they will be a gift to all involved.

This commentary originally appeared June 7 on TheCasperStarTribune.com

By clicking on any of the links above, you acknowledge that they are solely for your convenience, and do not necessarily imply any affiliation, sponsorship, endorsement or representation whatsoever regarding third-party websites. We are not responsible for the content, availability or privacy policies of these sites and shall not be responsible or liable for any information, opinion, advice, products or services available on or through them.

© 2020 Buckingham Strategic Partners^®

“Wealth is not his that has it, but his that enjoys it.” – Benjamin Franklin

Contrary to the popular saying, money can buy happiness, but only if you spend it in the right way. Behavioral economists and social psychologists have studied this topic – the intersection between money and happiness – quite a bit in recent years, and we can all benefit from their findings.

As you might expect, up to a certain income level, money helps to eliminate anxiety and increase the feeling of security. For example, having more money may mean you worry less about grocery shopping, going out to eat, or paying your mortgage. Nobel Prize-winning research shows that increasing one’s annual income from less than $25,000 to $50,000 can make you more than twice as happy. However, once you have the income to meet basic human needs, it seems additional income doesn’t provide much in the way of additional happiness. A more recent study reveals that the payoff in happiness level for income increases over $95,000 is slight.

So, if you consider yourself relatively affluent and lucky when it comes to material wealth, how do you maximize your assets to bring greater happiness?

Let’s talk first about what doesn’t work. If you are looking for lasting happiness, you will want to avoid buying more “stuff.” That’s because although we might think a new sports car will make us happy, what we are imagining is the first day we own that car when it is bright, shiny, new and exciting. As we grow used to owning the car, it no longer offers the same thrill, and our happiness returns to the status-quo, pre-new-car level.

There are, however, ways to spend money that have been shown to provide a greater level of contentment and joy. One, for instance, is to spend money on others. In one experiment, 46 students were given $20 to spend. The students who were told to spend the money on others – treating a friend to lunch or donating to charity – were happier at the end of the day than those who had been instructed to spend the money on themselves. Shopping for and purchasing the perfect gift, and then seeing the joy on another’s face when they open that gift, provides much more lasting contentment than buying something for yourself.

Giving to charitable causes that are important to you also tends to produce a high level of contentment. Using your money to do good in the world, and seeing the impact of those efforts, results in a feeling of well-being not found in material goods.

Another category of spending to consider involves experiences. When researchers interviewed study participants about their recent purchases, they found that money spent on activities such as plays, concerts or dinners out brought far more pleasure than material purchases.

Think about your last vacation. What do you remember? What really sticks? Those memories that bring a smile to your face are in fact an ongoing source of contentment and joy. To further extend the joy from your next trip, try to savor the time you spend planning and looking forward to the journey, and take lots of photos while you are there so that you can review and revisit them when you get home.

Our options for experiences may be limited due to concerns over and the effects of the COVID-19 pandemic. This might be a good time to explore experiences you can enjoy from home. Ever wanted to learn to paint, become a better cook, or speak French? Classes in these and many other topics abound online. Perhaps you could team up with a child or grandchild to take a class together, even though you might not be together in person.

An often underappreciated way to spend your money is on saving yourself time. There are many tasks that you may not enjoy, for example, doing the laundry, house cleaning, or yard work. Consider spending money to eliminate these tasks that do not bring you joy so you can use the time on something that does.

Interested in examining your own spending habits? Track your purchases for a month and categorize each purchase as either an experience, material good, or gift for others. At the end of the month, look back over the list and think about the pleasure each purchase brought you, and for how long. Do you notice a pattern?

Money may not be the only key to happiness, and likely not the most important one. However, thinking about how you spend your money, and choosing wisely, can go a long way in bringing joy to your life.

By clicking on any of the links above, you acknowledge that they are solely for your convenience, and do not necessarily imply any affiliations, sponsorships, endorsements or representations whatsoever by us regarding third-party Web sites. We are not responsible for the content, availability or privacy policies of these sites, and shall not be responsible or liable for any information, opinions, advice, products or services available on or through them.

The opinions expressed by featured authors are their own and may not accurately reflect those of Buckingham Strategic Partners. This article is for general information only and is not intended to serve as specific financial, accounting, or tax advice.

© 2020 Buckingham Strategic Partners