Financial advisors often promote peace of mind as a key benefit of wise wealth management, but peace of mind is not a one-size-fits-all concept. It varies from person to person and cannot be achieved simply by engaging in activities like golf or sailing. Instead, peace of mind is a state of being, and different individuals find it in different ways. A fourfold framework can help individuals identify what brings them peace of mind and the associated risks with each orientation.
Individuals who are growth-oriented find comfort in pursuing higher gains and often take on greater risks in the hope of achieving success in the future. However, a danger of this orientation is connecting self-worth to net worth, leading to perpetual dissatisfaction as individuals compare themselves to others who may have achieved more success. On the other hand, those who are risk-averse and have a protect orientation feel safer when they have a solid financial safety net and insurable risks are well covered, but they may live in fear of the unknown and overspend on protective measures.
Those with a giving orientation find peace of mind in sharing their financial resources with others and do not fear that generosity will put them at financial risk. However, they may struggle with guilt about their own financial success and could sabotage themselves financially in extreme cases. Individuals with a live orientation prioritize flexibility and spontaneity in their lives and feel secure knowing they can live as they choose, but they may struggle with an unwillingness to learn from the past and a blind eye to the future.
It is important to recognize that most individuals exhibit traits from all four peace-of-mind orientations, and it may be helpful to rank them in order of most to least likely to understand oneself better. Financial planning that addresses multiple aspects of these categories can bring individuals the most peace of mind. True wealth is not just a number but is also about having peace of mind, so individuals can pursue the things that are most important to them. By understanding their own peace-of-mind orientation, individuals can make more informed decisions about their financial future and personal well-being.
