How Much is Enough?
Interview with Andrew Bradley, Cape Town based co-author of the book ‘How Much is Enough?'
Where do you put the limit of how much is enough? How do you know? There’s a very fine line between investing in the future and losing out on the now. How do you do that, especially when it comes to family? Andrew Bradley, CEO of Old Mutual Wealth and father of 4, constantly works on this with his family to make sure they know where to draw that line and how to keep it there.
‘How much is enough?’ is one of the key questions of today’s working parents, and in his latest book, Andrew Bradley, together with Arun Abey and Andrew Ford, answers just that. I’m intrigued by how a book on wealth creation, written by financial gurus, addresses family needs beyond the realm of investment strategy, and how it fits in a context of mindful living as a family. I want to learn from this man’s experience, know what works for his family, what is challenging for them, and find out how I too can make this work for my family.
"How much is enough is a state of mind, it’s the foundation of what starts to give you happiness,” explains Andrew. "Our priorities should reflect what we value the most; we place too little value on our time and end up wondering where our lives went. Too often people only think about the present in terms of their business and how they spend their money. Ironically, in terms of family, we tend to put off things and think that we can make up for lost time in the future. Debbie, my wife, describes it this way: we have a whole lot of balls to juggle with, some made of rubber, some made of glass. if you drop a glass ball, it breaks. The rubber one bounces back. Family is a glass ball, but most people treat it like a rubber ball. In many ways it is rubber, because family is the most forgiving, but at some point it hardens and when that happens, it’s lost. The work ball is the rubber ball, and it will bounce back.”
Andrew believes that happiness is about experiencing life with the people who are the most important to you. "When I am travelling alone, I don’t want to stay a day longer in any destination. I want to share these experiences and spend time with my family,” he says. "In my 30’s, I was very focused on work, building a career, building for the future. I didn’t want to spend money on anything that was not immediately essential for my family, I did not want to waste money that could be needed in future. One day, my wife said, "You’ll be very wealthy when you’re old and retired, but without a family. It’s about now and the future. The kids need you now and want to enjoy life now as well.”
"The key is that you and your partner have to go on this journey together, and the best way to start is to have a conversation,” Andrew says. He explains how it’s all about trade-offs: do we decide to only have one car as a family that we share, do we employ a domestic or not. It’s different for every family and will depend on what they can afford and what they want to achieve. "Many of the immigrant families who came to South Africa sacrificed a lot and worked themselves to the bone to get the next generation educated and to raise their standard of living. There is absolutely nothing wrong with that. It all depends on your context and what you are trying to achieve now and into the future. How much do you need to retire on? For a certain standard of living you need R5 million, but if you are happy with less expensive tastes you may only need R3 million. My wife tells me it’s enough, but then I tell her she doesn’t need another pair of jeans...” he smiles. "It’s a constant trade-off.”
HOW DO I START A CONVERSATION?
I realise that, for many of us, a conversation with our families, but also with ourselves, is long overdue. Through a series of case studies, reflections and questions that we should ask ourselves, ‘How Much is Enough?’ guides us towards starting a conversation so that we can better understand what truly makes us and our families happy, and where to draw the line of how much is enough.
"It’s about how we spend our time, not just as an individual, but also as a family,” Andrew highlights. "We all have 24 hours in a day. How do you want to spend these? We should aim to consciously be present and meaningfully engage with those that matter to us. We have to be mindful and present; it is a critical component of enjoyment. This significantly enhances our happiness. If not, you’re always on the chase, aiming for the next level on a merciless treadmill to try and win the rat race.”
A CONVERSATION ABOUT MONEY
Think about this: the 4 words that are most associated with money are all negative: anxiety, depression, anger, helplessness. Start planning your next family conversation about what money really means to you and to your children. Teach them from a young age how to save, how to invest, and most importantly why they are doing it and what it is for.
A CONVERSATION ABOUT QUALITY TIME & WELL-BEING
Watching TV is the nr 1 leisure activity in the world. Often people spend more time in front of a TV than talking to family or friends. Yet, when last have you clambered off your coach late at night after an evening of watching TV feeling great about yourself and good about the world? While we think that TV will be a satisfying form of relaxation, it rarely is. Ask yourself, "What does quality time mean to me and to my family?
TIP: Pursuing engaging actitivities that have a positive effect on ourselves and particularly on others multiplies our sense of wellbeing. Identifying and using our signature strengths (the ones that we are best at) creates a real sense of ownership and authenticity ("it’s the real me”), and a sense of excitement and invigoration rather than exhaustion.
A CONVERSATION ABOUT STRESSORS
Today’s bestselling drugs are ‘mood altering drugs’ used to treat health problems that are mainly stress related: hypertension treatments, tranquillisers, sleeping pills & anti-depressants. Understanding the overwhelming power of peer group pressure and our intense desire to be accepted into the club, explains how our behaviour is susceptible to being shaped by others’ expectations rather than from within. It shows how we sometimes let others determine how much is enough for us, instead of taking the more difficult path of working it out for ourselves. Ask yourself, "What are the stressors in my family?”
KEY CONCEPTS TO REFLECT ON:
The Happiness Prize – the ability to increase our happiness without the need for more money. Pursue this endlessly.
Hedonistic Opportunity Cost (HOC) – money is not about ‘how much’, it’s about ‘what for’. Money is a means to an end, not the end in itself. Hedonistic Arbitrage (HA) – maximising our wellbeing for the money we spend Instead of rushing into expensive financial adventures like vacation apartments and fast cars, ask yourself what you really want out of the experience. Instead of buying, look at alternatives like a long-term lease or joining a motor club that give you access to what you’re looking for. Compare the difference in price with what else you could do with that money to give you more happiness for the same amount of money.
WHAT EXPERIENCES DO I REALLY VALUE?
TIP: keep a diary and note at the end of each day what it was that made you particularly happy, and what had little effect. In particular, jot down a list of the things on which you spent money, and note which ones contributed to your happiness and which ones faded quickly from memory. Just a few days (or a weekend) of this process will have a big impact on how you spend both your time and your money. Most people are very surprised by the outcome of this exercise. Doing this quick assessment is time exceptionally well spent.
HOW TO AVOID THE CONSUMPTION TREADMILL
"In general, events that are stable and certain (like a new house) are easy to adapt to,” explains Andrew, "whereas events that are new experiences and uncertain (like a holiday) are not.” "To maximise our happiness, we should concentrate our consumption on positive events that are novel and uncertain, rather than those that we will simply become used to. For example, given the choice between an overseas family holiday and a new kitchen, an overseas holiday may well have a longer-lasting effect on happiness, due to its unpredictable nature – despite the fact that the kitchen may, in fact, last longer.” Ask yourself this question: in 10 years time, will your children have fond memories of your kitchen or the family holiday enjoyed together? Once you have a good idea of what really matters to your family and how much is enough, the book guides you to look at practical ways to enhance wealth and overcome thought traps that prevent wealth from happening; it gives insights in wealth creation strategy and how this can contribute to your well-being. Now, when it comes to finance and investment, I find it difficult to understand what exactly is being said. You could as well be talking Chinese to me. BUT, what I do realise after having read ‘How Much is Enough’, is that this can be handled effectively by a financial expert, provided that – and here’s the key – you can tell your expert what it is that you want to achieve in the long term without losing out on the now. "What matters is that your wealth-creation strategy is closely aligned with your family’s values and goals,” Andrew concludes.
"It’s 15:30, I need to run,” Andrew apologises. "My son’s got a waterpolo tournament on. I don’t want to miss it.” Isn’t it refreshing when a leader in the wealth and investment industry has to run, not to his next business meeting, but to his next family engagement? As the saying goes, the proof of the pudding is in the eating...