John D. Rockefeller once famously said that the only thing that gave him pleasure was watching his dividends come in. If true, that may be one of the saddest perspectives on money I have ever heard. Money can certainly provide a financial return, and growing it wisely is important. But if financial return is the only return you expect from your money, you may miss some of the greatest benefits money can provide and some of the best things life has to offer.
First, as a person of faith, I must talk about the eternal return that I believe you can receive on your money. In his book the Treasure Principle, Randy Alcorn argues that charitable giving can produce a return that no stock, bond, or real estate investment can ever match, not because it makes us richer here, but because its value extends beyond this life. I believe there is no greater return we can receive on our money than using it to make a difference in the lives of others.
Money can also provide an emotional return that is difficult to measure on a financial statement. It can provide you with the peace of mind that comes from knowing you are financially secure. A healthy emergency fund, manageable debt, or extra savings can reduce fear and worry by giving you confidence that an unexpected medical bill, home repair, job loss, or family emergency will not become a financial crisis. Sometimes the value of money is not found in how much it earns, but in how much anxiety it removes.
Lifestyle return is also important. If spent responsibly, money can make life more enjoyable. That might mean traveling while you are healthy enough to enjoy it, sharing experiences with family and friends, buying that thing you always wanted, or pursuing a hobby you enjoy. None of these uses may produce a measurable financial return, but they can provide enjoyment, create memories, strengthen relationships, and improve quality of life. Saving and investing are important, but money is ultimately a tool, and there is nothing irresponsible about using some of it to enjoy the life you worked so hard to build.
One final, often-overlooked return on your money is the flexibility return. Extra savings, low debt, and available cash may not always maximize investment returns, but they can give you the ability to change jobs, allow a spouse to stay home with the kids, or retire earlier. Financial flexibility means having options, and options have real value. Sometimes the best return on money is knowing that when circumstances change, you have the freedom to respond on your own terms.
As a financial advisor, it may sound unusual for me to talk about returns that are not financial in nature, but I believe having a balanced view of the purpose of money is an important part of living a successful and fulfilling life.
With all of that said, none of this is meant to diminish the importance of a strong financial return on your money. In fact, the more effectively you grow and manage your money, the more opportunities you may eventually have to use it in these other meaningful ways. Money should be grown wisely, but it should also be used wisely. After all, the ultimate purpose of accumulating wealth is not simply to have more of it, but to use it in ways that improve our lives, help others, provide security, and accomplish the things that matter most to us.
(Past performance is no guarantee of future results. The advice is general in nature and not intended for specific situations)