Here are my top 3 takeaways from my brilliant conversation on The Humans vs Retirement Podcast with Dr Daniel Crosby
1. Retirement is emotionally challenging.
Retirement is a major life transition that can be both exciting and emotionally challenging. While it can be a time of great joy, it can also be a time of great anxiety and stress. Retirement is a time of change, and it can be difficult to adjust to the new lifestyle and the realities that come with it.
The emotional challenges of retirement can be significant. Many people are faced with the loss of identity that comes with leaving their job and the loss of the sense of purpose they felt while they were working. This can lead to feelings of loneliness, depression, and anxiety. Additionally, many people may feel insecure, as they may have to adjust their lifestyle to fit their new spending plans.
In order to make retirement a successful and enjoyable time in our lives, it is important to be aware of the emotional challenges that will come with it. It is also important to understand that retirement is a process, and it takes time to adjust to a new lifestyle. It is important to take time to find new interests and activities that bring joy and satisfaction to life. Additionally, it is important to seek out support from family, friends, and professionals, if needed.
2. Invest with rules, not emotion.
Investing in retirement is a complex process. It requires careful consideration of a variety of factors, from risks to timeline and goals. It is also a process that can be emotionally charged, as it involves making decisions about our future and our financial security.
The key to successful investing in retirement is to make decisions with rules, not emotion. Research has shown that making decisions based on emotions can lead to poor financial outcomes. A meta-analysis of studies comparing human discretion with simple rules or processes found that following simple rules was four times more effective than making decisions based on emotion.
A rules-based behavioural framework allows us to make decisions with rules instead of emotion.
The first rule is the consistency rule. This rule emphasizes the importance of setting rules and automating them.
The second rule is the diversification rule. This rule emphasizes the importance of diversifying your investments across a variety of asset classes and sectors. By diversifying, you can reduce risk and increase potential returns.
The third rule is the rebalancing rule. This rule encourages you to periodically review your investments and rebalance them to maintain your desired asset allocation.
The fourth rule is the tax-management rule. This rule encourages you to consider tax implications when making investment decisions. This can help you maximise your returns and minimise your tax burden.
3. Money can buy happiness and joy.
Money has long been thought of as the key to happiness. We believe that if we have enough money, we can buy our way out of problems and buy our way into happiness. But is it really true? Can money really buy happiness and joy?
The answer is yes, but only to an extent. Money can buy us out of things we don't like, such as physical labour, and it can buy us experiences with people we love. It can also buy us a great deal of happiness when we give it away, as it helps us to put good out into the world and help our fellow man. However, money can only do so much. Once we have done what money can do, it is up to us to do the work and surround ourselves with the right people and the right mindset in order to achieve true happiness.
Money can also be used to buy us experiences that bring us joy. Taking a trip with family or friends, or even just buying something that you really enjoy, can bring us a great deal of happiness. Money can also be used to give away to those in need, which can bring a sense of satisfaction and joy.
It is important to remember that money can only do so much. It is up to us to do the work and create a mindset and environment that will bring us true happiness and joy. Money can help us to get there, but it is not the only factor. We must focus on the controllables, have faith in our process, and surround ourselves with the right people in order to achieve true wealth.
Listen to the full conversation and read the shownotes here