We recently celebrated my son Daragh’s 6th birthday. The evening reminded me of the best piece of financial planning advice I ever received. This advice wasn’t from a lecturer, investment guru or mentor but an existing client, and I bring it to many financial planning meetings with clients now.
This client was in his mid-sixties and had sold a business for a large sum. From the outside, he seemed like he had it all. However, during a frank conversation over coffee, he mentioned to me that he would give a lot of it away for the chance to go back to his 30’s and 40’s and spend more time with his family and friends. He spent years working 50-60 hours a week building a hugely successful and well respected company. He was admired by friends, family and colleagues alike. He had all the trappings of success like a great car, big house, kids in private schools, skiing in the winter and membership in a prestigious golf club. However, he left the house at 7am every morning and often was home after the kids went to bed.
During our conversation he pleaded with me not to do the same, and it had a huge impact on my life. I had recently started working for myself and was in the process of trying to build a strong business. I was busy and stressed. The advice took some time to sink in, but eventually I got his point, and it has framed every big financial decision we have made as a family ever since.
The first key change I made was to move to a 4 day week about 3 years ago, stopping work on a Friday. I initially said I would try it for a summer, but I ended up making it permanent. The extra day allowed me to drop and collect the kids to and from school and have the whole day with them during holidays. Taking this time off didn’t significantly affect my productivity. I found Fridays often ended early with invites to play golf, after-work drinks and long lunches anyway. I’m so glad I made that decision early, so I was able to enjoy the kids at a time when they are so much fun (Daragh is 6 and Aimee is 8).
It was around this time my wife Sarah moved jobs and decided to also move to a 4-day work week. This gave her some time with the kids also. It meant one of us was always home early in the evening to help with homework and put on dinner, while focusing on important family events.
This started a process of making quality family time and the famous work-life balance a key factor in every decision. I appreciate we are very lucky to be in a position to do this, but there are some ways you may be able to make this work for yourself or your clients.
For example, about 3 years ago we considered moving house, to get some extra space, maybe a view of the sea in Howth, and a decent garden. We looked around briefly, but then considered what impact the extra mortgage would have. It would restrict our ability to save for retirement and would probably put more pressure on both of us to increase our income (by working harder). Therefore, we resisted the temptation to move to the dream home and we decided to stay in our smaller house, which we love anyway. Similarly, we decided to keep my 2008 Volvo rather than trade up.
When I meet clients, I add this insight into every financial decision. We are programmed to want nice material things and to chase the trappings of success, but it is very easy to jump onto that particular merry-go-round and then not be able to get off. We have the nice car, the nice house, the great holidays etc, but find we have to work long stressful hours to pay for it all. I explain to my clients it doesn’t have to be that way. By taking a step back we often find that it’s not the material things that make us happy, but time with family and friends. Most of that is free!
There are sacrifices to be made. We could definitely have made more money. I could have grown my business significantly further and generally made more financial progress. But I’m glad we didn’t. I generally try to maintain working a 30 hour week. It’s not always easy, and I have found myself getting busier recently, so I need to reflect again on where I stand.
When you find yourself in the middle of an important financial decision, please take some time to consider the long-term impact of that decision on your work-life balance. A good financial plan can help keep some perspective on what is important.
Dave Quinn is Managing Director of Investwise Financial Planning, a fee-based financial planning firm based in Dublin City Centre, Ireland.