Most scientific laws can be expressed in concise mathematical equations such as Einstein’s E=mc2. These equations underpin universal laws which describe how the physical universe functions in a predictable and repeatable way. The speed of light is constant. The planets circle the sun in stable orbits. Magnetic needles always point north. Energy is never lost.
Outside the realms of science, I am unaware of any “laws” which are absolute, definitive truths. Yet many self-appointed experts claim there are universal laws for success and achievement. These so-called laws or theories are based on words which, unlike numbers, cannot be precisely tested. Numbers and formulae distinguish true science from hocus-pocus.
When it comes to money, there’s a gaggle of gurus who postulate some magic formula for building wealth. The harsh reality is there’s no off-the-shelf, mathematical recipe for financial success. Unlike Newton’s laws of motion or Einstein’s theory of relativity, money management is not an exact science. In fact, it’s a very personal thing which mirrors the way we live our lives.
Some people are defined by money and do everything within their power to increase their net worth. Others see money as merely a means to an end and seek a deeper form of wealth in life. Aiming to be the richest person on the block or the happiest is clearly an individual choice.
Regardless, you need a financial plan to turn your goals into reality – you just can’t leave it to fate. You must have two hands firmly on the driver’s wheel of life and steer in the direction you want. All of us must take responsibility for being in control of our lives.
The business maxim – “If you fail to plan, you plan to fail” – is equally true when it comes to personal money matters. Financial plans differ depending on where you are on life’s journey. Those just starting their working years will have big picture dreams while those approaching retirement will likely have more modest aspirations.
At the end of the day, everyone wants to be happy. We all know there is some connection between money and happiness. But research shows that once you have enough money to meet your basic needs – food, clothing, shelter and maybe even an annual holiday – incremental increases in income have little effect on your happiness.
Which is why the super–rich are typically no happier than Mr. and Mrs. Average. The ultra-wealthy may have all the luxuries in the world, but they are still beset by a litany of worries. While paying the rent is not an issue, concerns about marrying gold diggers, rearing spoilt brats and feeling emotionally isolated are ever present.
Believe it or not, there is even a disease called Wealth Fatigue Syndrome. It afflicts wealthy individuals who feel bored and unfulfilled despite being powerful and pampered. Boredom and emptiness follow their spiral of excessive spending as they derive less and less satisfaction from bigger and bigger material indulgences in their search for thrills.
Some time ago I read an article which suggested that money used to buy memories rather than things, creates the greatest happiness. Apparently, splurging on a vacation makes us happier than indulging on a car. Equally, taking a friend to lunch will make us happier than buying a new outfit.
Now there’s some food for thought!
Sincerely
John (JT)Thomas
This opinion piece is provided by John (JT) Thomas, a 48- year veteran of the financial services industry and since 1987 a specialist in commercial mortgage funds. Considered by many to be the father of the modern commercial mortgage fund sector, JT helped establish and then managed – for 17 years – what became the largest and most successful commercial mortgage fund in Australia – The Howard Mortgage Trust – with assets exceeding $3 billion. Under JT’s stewardship, investors never lost one cent of their investments and indeed, investors always received competitive monthly returns. JT was also Chair of the $40 billion mortgage trust industry sector working group.
JT has been proudly involved with Princeton for nine years and sits on both the Princeton Credit Committee and the Princeton Compliance Committee as well as being an advisor to the Princeton Board.
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