In around 400BC, the Chinese Taoist philosopher Lao Tzu wrote the Tao Te Ching.
This ancient text, in 81 brief chapters, offers practical advice on embodying Taoist beliefs, encouraging modesty and self-restraint. These qualities, it says, are key to our harmonious movement along the Tao (or the “Way”), the universal power through which all life flows.
As well as being a foundational religious and philosophical text, inspiring thinkers, artists, and academics worldwide, it also has some wisdom transferable to your pension savings. Specifically, it might be able to help you answer the important question, “How much is enough?”.
Here are three inspiring lessons that might help you.
1. “If your happiness depends on money, you will never be happy with yourself”
The true authorship of the Tao Te Ching is contested among scholars and it’s possible that Lao Tzu (also known by the Chinese honorific, Laozi), never existed.
Different parts of the work have been dated to different periods, which might suggest the work is a collaboration. Laozi, meanwhile, roughly translates as “Old Master” and could reference a popular legend concerning a 996-year-old man, “born old”, who had lived under 13 incarnations.
Either way, it is the collected wisdom compiled under his name that counts here. Among these is the above quote on the pursuit of happiness.
In the context of your modern-day finances, we can look to this 2,400-year-old message as a lesson on the value of goal-based planning and investing.
When we sit down to discuss the financial plan we will put in place, we want to get to know you. This means understanding your financial position now, but also your aspirations.
Your plan won’t be designed to help you amass as much wealth as possible, regardless of the potential risk to your future happiness. Instead, it will be about helping you to achieve your goals – often your dream retirement lifestyle – while taking as little risk as possible.
2. “If you look to others for fulfilment, you will never truly be fulfilled”
Financial wellbeing plays a huge role in our overall happiness. It comprises the:
- Protection, stability, and peace of mind that a solid financial foundation can bring
- Joy and emotional wellbeing of knowing what makes you happy and having a plan to attain those things.
Having “enough” to live the life you want in the present – while saving for your dream future – should give you confidence and a sense of control. And having a written plan in place, regularly reviewed, provides the reassurance that you remain on track.
But one key element of your planning, and one hinted at in the above quotation from the Tao Te Ching, is that your plans need to be realistic.
This is why avoiding unhelpful social comparisons is a key building block to financial wellbeing.
As humans, we love to compare ourselves to others, whether it’s a celebrity in a magazine, a reality star on television, or a neighbour just down the street. Just as we might not all be as attractive as Kim Kardashian or Brad Pitt, or as talented as Leonardo da Vinci or Mozart, unrealistically comparing ourselves financially to those who are better off than us, can severely harm our emotional and financial wellbeing.
It’s important to base your goals on your aspirations, and your decisions on your own circumstances. Chasing investment trends or taking risks that aren’t aligned with your profile could result in disaster.
3. “When you realize there is nothing lacking, the whole world belongs to you”
After a long career of hard work and diligent saving, reaching your well-earned retirement is a huge milestone and, often, a great relief.
Attaining a realistic, yet aspirational, goal within your agreed time frame and risk limits is the ultimate payoff. And a carefully calibrated and robust financial plan can help you achieve just that.
Which? recently updated its figures for how much income UK retirees need once they finish work, depending on the type of lifestyle they intend to lead.
The report finds that couples spend an average of £19,000 a year on day-to-day essentials like food and drink, transport, and utility bills. This figure rises to £28,000 for couples who want to enjoy some leisure spending and £44,000 for couples who want to enjoy luxuries. These luxuries are said to include things like extended long-haul holidays and a new car every five years.
Deciding what will make you happy is key to achieving happiness. At Globe, we can help you think about the future you want, and ensure you have a plan in place that will get you there.
Get in touch
At Globe IFA, we may not be sages of Taoist philosophy, but we do know a thing or two about long-term financial planning. If you’d like help to achieve your goals, or you just want reassurance that your plans remain on track, speak to us now. Please email hello@globeifa.co.uk or call us on 020 8891 0711 to see what our experts can do for you.
Please note
The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Your pension income could also be affected by the interest rates at the time you take your benefits. Levels, bases of and reliefs from taxation may be subject to change and their value depends on the individual circumstances of the investor.
