Life Is a Sum of Your Financial Choices

The Nobel Prize-winning writer Albert Camus once reportedly said, “Life is a sum of all your choices.” Every twist and turn you take in life adds up. Your decisions either contribute to or detract from your goals, and over time – aside from external factors – they shape where you are and who you become.

Similarly, your financial outcomes are the result of all the investment and planning decisions you make over the course of your life. Whether you’re preparing for a comfortable retirement or planning a legacy for your loved ones, your financial choices play a significant role.

Why It’s Important to Understand Your Financial Decisions

While there are many factors in life that are beyond our control, we can take proactive steps to shape our future. With the right guidance, analysis, and determination, it’s possible to align your financial choices with your goals. While you may not achieve every financial dream, you can still make decisions that improve your situation, whether it relates to your career, home, health, or family.

Not every decision will work out perfectly, but collectively, they add up. By making informed choices, you can have a meaningful impact on shaping your financial future.

Factors You Can’t Control vs. What You Can

There are many unknowns in the world of investing, like market performance, inflation, or life expectancy. These are factors we simply can’t control. However, you can plan for these uncertainties and adjust your strategy to accommodate them.

On the other hand, there are decisions within your control that can make a substantial difference to your financial outcomes. Here are a few:

1. The decision to invest: Whether or not you choose to invest is crucial. If you’re not already in the habit of investing, it might require a mindset shift, but the potential consequences of not investing can be substantial.

2. Avoiding high fees: Excessive fees can erode your investment value and limit your future options. Opting for low-cost, efficient investment strategies helps protect your returns.

3. Using tax-efficient structures: Making full use of tax-advantaged accounts, such as superannuation, throughout your life can benefit both you and your family.

4. Diversifying your investments: While diversification can be challenging to manage on your own, working with an experienced investment partner can help ensure you are sensibly diversified.

5. Staying invested: Although the market can be volatile, trying to time it based on fear or emotion often leads to worse outcomes. Staying invested through uncertainty is typically the better long-term strategy.

Empowering Your Financial Future

It’s easy to feel like life is happening to you rather than being something you control. But in reality, you always have choices. By making thoughtful financial decisions, you can create incremental changes that have a profound impact over time.

You can reverse poor financial decisions. You can repair mistakes. And if you’ve made a wrong choice, whether due to bad advice or new information, you can always adjust and make better choices moving forward.

Of course, being overwhelmed by too many decisions isn’t helpful either. At Northstar Financial Planning, we aim to simplify the process by offering clear investment options. With personalised advice and easy-to-understand tools, we help you focus on the choices that matter most to your financial future, whether it’s making the most of tax allowances or optimising your strategy for retirement income.

The Wisdom of Albert Camus

One of Camus’s famous works, The Plague, saw a resurgence in popularity during the pandemic for its themes of resilience and choices. He is also quoted as saying, “Real generosity towards the future lies in giving all to the present.”

While giving everything to the present may seem overwhelming, you can still be generous to your future self by making the right financial choices today.