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Weighing Financial Risk and Reward

MexiKen | Sep 12, 2009 |

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Normally when you talk about financial risk versus reward, it's in relation to investments. If you don't like taking risks and you would rather play it very safe, you can buy things like CDs or bonds. On the other hand, if you want to swing for the fences and hope to make a ton of money... but are willing to lose it while you try, you can dabble in speculative penny stocks, biotech or emerging markets. That's the kind of decision that normally comes to mind when you hear someone talking about a financial risk versus reward scenario.

However, there is a very different financial risk/reword situation that is very real and it is very important. In a way it also has to do with investment, just not in the exact way outlined above. Instead it has to do with investment of time and attention. Specifically, time devoted to work relative to attention being paid to other aspects of your life; often times other, more important aspects of your life.

What I'm talking about is the mixing up of priorities in today's society. Everything seems to be about work, work, work and accumulate, accumulate, accumulate. It seems that we keep striving to reach "that next level", because that is where we will find happiness. If we could just bump up our income by an extra 10 or 20%, THEN we would be in good shape, we could relax and be happy. Really?

It seems that the finish line is a constantly moving target for most of us. I mean if you think about it, pick a time say five or 10 years ago, or any timeframe you want in the past when you were making less money than you are today. More than likely if someone had asked you at that time if you could make what you are making today, would that satisfy you and would that make you happy? There's probably a pretty good chance that you would have answered "yes". So, what happened? You've made it to that point, but you're still striving for more.

Don't get me wrong, there's nothing wrong with striving for more. Heck, I'm just hoping to be able to replace my old spare tire bike rack so I can go for a ride away from home soon. However, if more more more becomes the end-all, be-all goal, to the exclusion of other important things in life such as family, friends, healthy living and some relaxation, then something is way out of whack.

It's an old clichÃ©, but it's amazing how much truth exists in the phrase, "Money can't buy you happiness". Very few people in their waning years will sit back and reminisce about those expensive shoes they bought or that fancy watch or that expensive car. The memories that will stand out are those spent with people dearest to you, and it's quite likely that the best memories with them are in simple circumstances, not fancy resorts or exotic vacations.

There's a great quote by Doctor David Myers who is a professor of psychology at Michigan's Hope College. He wrote the book "The Pursuit of Happiness; Discovering the Pathway to Fulfillment, well-being That, and Enduring Personal Joy". This is what he said, "Wealth is like health; although its absence can breed misery, having it is no guarantee of happiness".

So by all means, pursue wealth but do it in moderation. Focusing on it too much, myopically, is somewhat akin to how I look at professional bodybuilders (I'm talking about the GIANT bodybuilders who don't even pretend not to take drugs).

Exercising, lifting weights and building up your body is a good and noble thing. However, taken to extremes where massive injections of drugs are needed, lifestyle allows for nothing outside of training, eating and resting, and you essentially alienate yourself from the general population, something is not right. Back off the gas a little... Load up your car bike rack, drive to the country and enjoy life a little. I know I'm hoping to do just that with my wife and kids this weekend!