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Life Lessons - A Financial Planner’s Perspective

Author Alvin Yam
Editor Vinci Palad

As I look back on my career as a financial planner, I think of the diverse range of human experiences I’ve had the pleasure to experience firsthand. From the excitement of entrepreneurial success to the contentment of a well-earned retirement, my clients’ stories have been varied and inspiring.

Here are a few of the deeper lessons I’ve learned working with people over the years.


Money and happiness

Over the years, I’ve met many clients who, despite amassing significant wealth, didn’t seem to find contentment or joy. For some, their lives were often consumed by a relentless pursuit of more and more. I also met with clients who were driven by the fear of losing what they had built.

One client I worked with, Jack, had built a massive real estate empire in Los Angeles over the decades. His net worth was well over $100 million. Despite being in his seventies, a time when most would consider retirement, he focused intently on expanding his real estate empire and building more wealth.

For decades, he lived in the same modest house in the Mid-Wilshire neighborhood in Los Angeles. He also drove the same 1983 Mercedes-Benz 190E.  

Whenever I proposed our annual client meeting, he’d always decline to drive to my office to conserve fuel. As for vacations? The concept was foreign to Jack. While Jack lived life on his own terms, I couldn’t help but feel that his world revolved solely around money.

Although Jack is an extreme case, what’s interesting is that studies have shown that people in developing countries often report higher levels of happiness than those in developed and wealthier nations. This could be due to a number of factors.

For instance, people in developing countries have been shown to derive happiness from improved living conditions or increased earnings, even if they have to work longer hours. In fact, studies have shown that focusing too much on material possessions can actually be detrimental, leading to anxiety, depression, and dissatisfaction. It’s a reminder that while financial stability is important, it’s not the only path to a fulfilling life.


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Giving back

Achieving financial security is often central to my work as a financial planner. But over the years, I discovered that fulfillment can be found in building and accumulating wealth and giving it away.

For instance, many of my clients have taught me the power of generosity. They regularly donate to causes they care deeply about, whether it’s supporting local charities or establishing their own foundations. This act of giving benefits the recipients and brings a sense of fulfillment and purpose to my clients. Many felt satisfied knowing their wealth was making a positive difference. And I’ve also seen this generosity enrich their lives with a sense of purpose and connection.

My experience volunteering with the Rotary Club while I lived in Pasadena also confirms this belief. The members of my local Rotary Club were made up of many successful people in the community and would often organize volunteer projects and offer assistance to groups in need.

One of our most memorable projects involved organizing a large group of volunteers to spend a day building new homes in small villages in Mexico for families in need. Although building those homes under the hot sun was hard work, seeing the joy and smiles on residents’ faces as they walked into their brand-new homes, built with love and care, is a memory I’ll always treasure.

Beyond personal fulfillment, research has also shown the positive impact of giving. A 2008 study published in Science revealed that giving money to others directly led to greater happiness compared to spending it on oneself. And another study in the Journal of Personality and Social Psychology showed that volunteering significantly reduced stress and anxiety.

Many successful people already understand that giving back isn’t just about helping others — it’s about enriching our lives in ways we didn’t know we could.

Comfort vs. growth

Another lesson I’ve learned is the relationship between risk and growth. This powerful correlation is especially true in the world of investments. Studies by firms like Morningstar show that higher-risk asset classes, such as stocks, have consistently outperformed so-called “safer” asset classes like cash and bonds over the long term. 

This is highlighted by comparing the performance of the S&P 500, a representation of U.S. large-cap stocks, compared to cash over the past 20 years. The S&P 500 has delivered an average annualized return of around 9.66% over the last 20 years. On the other hand, cash returns have been below 2% in every calendar year since 2008, with an average annual return of just 0.6% from 2008–2020.

The relationship between risk and reward also applies to our personal lives. Data and research validate the power of calculated risk-taking. The Kauffman Foundation, for instance, reveals that over half of all new jobs are created by startups within five years of their founding.

I’ve embraced this philosophy of risk-taking in my personal life as well. Over a year ago, I decided to leave the comfort and security of my job at a big bank and pursue a dream of starting my own investment adviser and financial planning firm. 

I quickly learned that launching my own business was much harder than I thought. I faced lots of setbacks and unexpected obstacles. And just like many entrepreneurs, I had to acquire new skills and adapt to changing circumstances in order to persevere. 

Looking back, I’m glad I stepped out of my comfort zone and decided to take the risk of an unknown path. This decision has opened up many new and unexpected opportunities, including working as a financial writer and consulting for fintech companies.


Time — the most precious asset

Perhaps the most important lesson I’ve learned is that time is the most precious asset. Time is not just a powerful factor in compounding wealth – it also shapes our lives.

Albert Einstein is often known for saying, “Compound interest is the eighth wonder of the world. He who understands it earns it … he who doesn’t … pays it.”

Time’s impact on wealth accumulation is pretty remarkable. Consider three investors: Investor A, who starts saving $10,000 annually at age 25, achieving a steady 9% return annually; Investor B, who begins the same journey at age 35; and Investor C, who begins the same journey at age 45. 

While they all invest the same amount each year and achieve the same return, the power of time and compounding gives Investor A a massive advantage. By the time Investor A reaches age 65, they’ve amassed $4,462,169, compared to Investor B, who has amassed $1,324,989, while Investor C has amassed $572,749.

InvestorYears of InvestmentValue

But the value of time applies not only to the world of finance. I used to work with a client who built a successful and growing accounting practice and, over the years, built it into a multi-million dollar firm. He loved his work and always engaged with his clients. Even though he was in his late sixties, he was still totally dedicated, showing up to the office every day and having a schedule of packed back-to-back client meetings.

I visited his office once and noticed many framed photos of his family on the walls. His children and grandchildren lived all over the country. But because of his business priorities and the distance, he rarely had opportunities to see them. His wife led a busy social life, often traveling and spending time with friends, while he rarely took any time away from work.

When I asked him some more about his family, I could tell there was some sadness on his face. He confessed that he wished he could have spent more time with his children and grandchildren when they were young, which is something he had missed out on. 

Unlike money, which can be earned, invested, and multiplied, time is irreplaceable.


Final Thoughts

My journey as a financial planner has given me insights that extend far beyond the world of finance. 

My clients have come to me seeking guidance in managing their personal finances. Despite the differences among all the people I’ve worked with, I’ve observed a common thread — a desire to live a fulfilling and meaningful life.

Ultimately, true wealth isn’t measured in dollars and cents but in our sense of purpose and fulfillment and our impact on others’ lives.


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6 thoughts on “Life Lessons - A Financial Planner’s Perspective”

  1. Subscribe to get more great content like this, an awesome spreadsheet, and more!
  2. Love the emphasis on compound interest!
    The most substantial impact financial bloggers can make in the financial lives of people is being obsessed and passionate with conveying this message to young people. Financial success is the easiest when people realize at a young age how incredibly wealthy they can be by starting savings and investing early with very little money!!!


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