I was recently at a dinner party with a group of people at the time when the Powerball Lottery prize hit a record $1 Billion. As an ice-breaker, our group discussed what we would change in our lives if we won. While initially everyone said they were happy with their own current lifestyle, the conversation continued and people started to dream. A few ideas started to emerge: traveling; catching up with friends; cutting back to part-time work or having a more flexible schedule; and adding convenience services such as lawn care, housekeeping, or even a private chef for family meals. For all of the people in our group, significant lifestyle changes were not part of the initial plan (although maybe this would change when the lump-sum after-tax payment of $300 million was actually wired into our Freestone account!). The dominant theme resonates: More time to do the things that are truly important.

This discussion struck me as a great starting point for Financial Planning. The “Powerball” discussion is just another way of saying “If money were not an issue, what would you do?” I am always struck by how readily college students and young adults travel (even internationally), and how freely they spend for “entertainment.” Clearly, travel and free time is not merely a financial issue. Most everyone has lived on less (even significantly less) at some point in their lives. It is true that it takes a great deal of effort and talent to create a sizeable nest egg to support you for the rest of your life, but, as with most things in Financial Planning, it comes down to choice. Do I own a larger house but travel less? Buy a boat, but work another few years? Do I want time to do charitable work? Learn to play the guitar? Get in better shape physically? What is truly important?

We have some great resources at Freestone that allow us to run a detailed financial plan, but as with any financial modeling, the inputs have to be defined. The Annual Spending Policy (commonly known as a “budget” - but a lot less fun to say) will determine the portfolio size required and/or the number of working years to reasonably attain the goal. However, the financial inputs will not define what it is that you truly want.

In thinking about what is truly important, you may be able to attain some of these things now on a more affordable scale. One of my friends said that if she won the Powerball, she would hire a personal chef. She greatly values family dinners at home, but with her busy career and schedule, the nightly dinner further stretches her already busy schedule. Instead of hiring a full time private chef, a step in the right direction may be to order-in from a restaurant one night a week, or to hire someone from a local culinary school to do an occasional on-site meal, or even cut down on the work by ordering from one of the local food prep companies that deliver prepped ingredients along with a recipe. Likewise, a boat can be chartered on occasion instead of purchased, a second home can be rented instead of bought, etc. Whole industries have been created to allow people to get what they need without the expense of ownership (Uber, Lyft, and Airbnb, to name a few).

At Freestone, we work closely with clients to assure that their Financial Plan will “work.” This is an important part of the Wealth Management process. Defining what you really want is equally important, as well as determining if these objectives can be attained now or in a way that meets the desired goals, but at lower costs. Thinking about how you would change your life if you were to win the Powerball may be one way to help you determine what you truly value. Of course, to actually win the Powerball, you have to buy a ticket…

We encourage you to contact a Client Advisor with any questions.


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