00:00 - 00:52
Thank you for joining this episode in our wellbeing series. We are in this episode looking into retirement planning. Now we talk about financial well-being in terms of money and mindset, said that before we're thinking about retirement typically as a financial challenge. But today with Neil, I would like to explore perhaps the mindset or mental challenge around retirement.
00:52 - 01:15
So perhaps beginning with that very open question, Neil, would you would you agree retirement is not just a financial challenge, it's also a mental challenge. I think it's primarily a mental challenge. You know, we in the history of humanity, you know, we as a species have made up a lot of things. You know, 3000 years ago, we made up money.
01:15 - 01:39
You know, for example, 150 years ago or whatever the time frame is really about that we made up this thing called retirement. We've made of religion, We've made up law. You know, all of these things are manmade constructs. So we struggle with money. We know that there's a ton of research out there that shows that humans struggle with money because it's made up.
01:39 - 01:59
We also struggle with this this manmade invention called retirement. And I’ll tell you one of the reasons why. It's because throughout evolutionary history, we've lived in what is known as an immediate return environment. And what I mean by that is the outcomes and benefits of doing something were immediate. So if it rained, we took shelter, if we were hungry, we ate, we didn't go.
02:00 - 02:18
I think I'll wait to do that right. We just lived a life. That immediate gratification was the only way that we lived our lives. Well, actually, the way that we have evolved as a species at the same time that society has evolved means that society now places a pressure on us to live in an environment that's known as a delayed return, environment where we do something today.
02:19 - 02:36
And actually the benefits won't be realized until some point in the future. That messes with the brain because for millions of years the brain has kind of just went now, now, now, all of a sudden we're saying to that brain, no you need to delay and the brain's going, I don't want to delay. I want to do it now.
02:36 - 03:10
So we're saying to someone who's 30, save money today, and I give it back to you when you're 65 or 70, the brain goes. But no, but the logical societal pressure part of our brain goes, Oh, I know I should do that because it's the right thing to do. It doesn't detract from the fact that the brain inside of our heads, this old brain, is constantly battling with society, saying delay, delay, put off, put off, put it off when it's lived in an environment where it's all about the here and now.
03:10 - 03:30
So is it is it a psychological challenge? You know, more so. Oh, that's why sorry, I say it's more of a psychological challenge than a physical challenge, if you like, because actually you need to address what's going on in your brain first before you address what's going on in your pocket. Okay, great. And then the well, I mean, the sort of obvious follow up question is how we've talked about guides and mechanics, right?
03:30 - 03:51
So guides are people who work on the human experience of money. Mechanics are all about the take more around the technical aspects of money. The mechanic could turn up and say, Tom, I want to talk to you about retirement. Here's a lovely chart that shows you your cash flow, shows you when you might run out of money. You know, we've got an asset allocation built over here that's going to drive this growth, all that type of stuff.
03:51 - 04:11
And you might go, Brilliant. What they've just show me is I'm never going to run out of money. That's really important to me. But actually, unless you address the fundamental aspects of what it means to be human and to transition from a chapter in your life to another chapter in your life, then actually you are not engaging with the human.
04:11 - 04:30
You're engaging with a client as a as a mechanic. Let me tell you what I mean by that. We all work for whatever period of time, right? If we're healthy, we all have a full 30, 40 years of working life. We build up a community, a network. We have purpose. We wake up in the morning, we go to work.
04:30 - 04:49
When you say to someone at a party, Oh, what do you do? You don't say, Oh, you know, oh, yeah, I'm Tom and I'm from Germany. I've got two kids, I've got a wife. I now live in Edinburgh. You don't do that. You say I'm a behavioural scientist. We typically identify with the thing we do most, which is work well actually, one day that stops, you know, 30 years of doing something.
04:49 - 05:12
Stops like this. What about, where's your identity go? Where does your purpose go? You know, so actually, unless we address what are you going to do when you actually transition into this thing called retirement and the money actually becomes is irrelevant at that point. It's about the question is what are you going to do to continue having purpose, to continue having meaning, to continue wanting to get out of bed in the morning.
05:12 - 05:34
And that conversation is wholly psychological. It's got nothing to do with money. I could talk to you about who you want to be in your future, your retirement. I don't need to mention money at all. You know, the money is just the engine that will allow that to happen. But unless you address that first and foremost, this becomes meaningless.
05:35 - 06:04
It lacks relevant context. So, you know, advisors need to figure out how do I have conversations with people who are going to transition into this next stage of life, what we call retirement, but actually address the human challenges first and the money challenge should always play second fiddle to that, in my opinion. Yeah, yeah, I can see where you're going with this, but, um, let me let me get there.
06:06 - 06:23
Potentially get that by asking lastly, a almost philosophical question, which is you mentioned that earlier that retirement is made up or it's a construct and I'm and I'm wondering what why, why is it useful or might it be useful to label that a construct or an invention? Well, you know what? Why is it helpful? What does it what does that do?
06:23 - 06:41
Because it immediately opens our minds to thinking about it in a different way. Right? So, you know, we say, oh, I'm going to retire. The amazing the first thing people think of as, oh, what age? You know, that's the way we've we have been socially constructed to think of retirement and age. Yeah. How much money do I need to retire?
06:41 - 07:06
Maybe I'm making the figure of £1,000,000. Done. And you go brilliant. I'm now properly planning for my retirement. That's because that's the structure that actually we've all come. We’ve all become used to. Let's get rid of that for a second. And let's talk about transitioning to another phase of life. Right. I'm a massive reader, you know, so I use chapters, you know, we're transitioning from chapter another into another chapter.
07:06 - 07:26
And by the way, it's not the end chapter. It's another chapter of your life, you know, and we might call stopping work or we might go or we might call the chapter slowing down, you know, whatever it is, right? It's a transition. And if we think of it like a transition, then financially it opens up a whole bunch of questions like, well, what do I want that journey to be like?
07:26 - 07:49
Who do I want to spend my time with? Where will I find purpose? It's not about the money. It's about the human journey, if you like. As we transition from chapter to chapter two, chapter to chapter. So for me, if we just accept that retirement is this construct, this made up thing that we as humans have invented, then actually that allows me to be more flexible in my thinking about how I approach it.
07:49 - 08:14
Now, I'm not rigid anymore. I'm not bound by the rules of retirement anymore. I'm bound by I know I'm actually boundless. I can kind of just think of any possible future I want, and I can plan for that without any constraints. And yes, money, obviously features in that narrative. But the narrative arc isn't one of money. It's one of who do you want to be?
08:15 - 08:38
How do you want to live a life of meaning and purpose? And ultimately, when you leave this earth, laying on your deathbed thinking, I have lived the best life that I possibly could have, you know, nobody, there’s research on this. Nobody. When they eventually leave this earth to learn, they're taking their last breath, say, I wish I had more money or I wish I had planned for retirement better.
08:38 - 08:52
Now what they do is they say, I wish I had spent more time with the family. I wish I had done the things that I want to do. But you know what? As you transition into this next chapter of your life, think of that and think I don't want to lay on my deathbed and think I wish I had done this or I wish I had done that.
08:52 - 09:16
You've got 20, 30, 40 years more hopefully, to do those things. So free your mind of the shackles that society has put on you and just think like a human being entering the next phase of your life. It'll change your outcomes completely. Amazing. Well, thank you so much. That was really, really thought provoking. There's a question that I'm labouring over, which is why?
09:16 - 09:38
Why are we talking about financial well-being so much anyway? Because after all that knowledge, that happiness and money sort of like, you know, hanging together or enabling or sort of like impeding each other is not exactly a new thought, but this thought that financial wellbeing is perhaps something that we're increasingly talking about because retirement readiness is something that we have increasingly less often talking about.
09:38 - 09:55
That's a sort of like idea that is shaping up in my head. Yeah Tom you know, I think there's another thing for people to think about here is, you know, so going back to what I just said about chapters in life, you know, when we transition into a different phase of life, a different chapter sticking with my phrase if we can.
09:55 - 10:19
Yes, we are moving to something else, but we're also leaving things behind. And the and these aren't clear lines in life. We don't just transition into another phase of life and everything that's gone before is forgotten or has no impact or doesn't, you know, trickle through. That's not how we work as humans, Right? So as we transition, we also need to start thinking, what am I, what am I retiring to?
10:19 - 10:34
Yeah, what am I moving towards? But also what am I leaving behind? You know, everything's a duality. Yeah. There's always a yin and yang. Yeah, right. And if we just think of one aspect of, oh, I'm going to retire and I'm going to do all these things. Yes. But also be aware of, you know, you're leaving your workmates behind.
10:34 - 10:53
The 9 to 5, the job, the camaraderie, all of those things, they're going to be left behind. How are we going to deal with them? And that's why opening your opening up your question earlier. That's why I think this is absolutely a mind over markets conversation. You know, get the mind bit right and everything else will fall hopefully neatly into place.
Now, amazing. Thank you so much. Thank you so much for watching. There was much in there, and I hope that leaves you equipped with a type of thinking that you can apply in your practice, in your intent to become a wellbeing maximiser.