If you’ve ever had a near-death experience or you’ve recovered from a serious health condition, you may have felt more driven, optimistic or eager to live life to the full afterwards.
A brush with death can put things into perspective and make you see the world differently.
Sometimes, simply getting older can have the same effect. As each year passes, you’ll probably be less likely to sweat the small stuff or tolerate other people’s nonsense.
Suddenly you want to jump out of a plane, abseil down the side of a building or travel the world in search of the scariest rollercoasters.
For some people, though, risk taking isn’t just about experiences. It’s about money.
Are your 60s a good time for financial risks?
One minute you’re using “you only live once” as a reason to go skinny dipping in Brighton on Christmas Day. The next, you’re saying the same while investing in crypto and NFTs - even though you don’t have the first idea what you’re doing.
All investment comes with a level of risk. And sometimes people have achieved great success from a small number of investments. If you’ve doubled your money once, it’s hard not to imagine what life would look like or your what friends would say if you doubled your money again.
Is this a smart move? It depends. Many people approach retirement, take a lump sum and do something extravagent. But, it’s important to calculate the potential upside as well as the downside.
In your 20s and 30s, you have time to recover from financial mishaps. You have the ability to make more money and fix past mistakes. The same can’t be said for those in later life - especially if they’ve left the workforce.
Comparison is the thief of joy
There’s of course nothing wrong with having ambition, but ambition for the sake of it, or not knowing when to stop, is where things get tricky. When my clients talk about making big investments or taking financial risks in retirement, they usually have enough money already. They might not be multi-millionaires or spending their days on a yacht, but they’re comfortable and have enough money to see them through to the end.
There’s just one problem. They compare themselves to others. They’re convinced their lives would be better if they had just as much as those they lunch with.
This is where things can go wrong. Envy and unfettered ambition can encourage people who are already extremely successful to do increasingly desperate things in the quest for more.
Take businessman Rajat Gupta. He was born in Calcutta in the ‘40s and orphaned at 19. He left India in 1971 to attend Harvard Business School and joined McKinsey & Company two years later to later become managing director. At one point he was worth around $100m but the trouble was, it wasn’t billions, which meant that he wasn’t part of the elite – which is what he craved.
Over time, greed got the better of him and in 2012 he was sentenced to two years in prison for insider trading; he lost more than just money. He lost the respect of many who looked up to him and considered him a hero.
An extreme example perhaps, but it’s easy to see how things can spiral out of control when we lose sight of what really matters.
Will more money solve your problems?
We often assume that more money will solve our problems. For someone on a low income with little to no savings, more money certainly can have a problem-solving effect. A substantial pay rise could enable them to pay off some credit card debt, buy their children new school shoes, or even go for a weekend away.
When you already have a lot of money, getting more of it has less of an impact. You might be able to buy more expensive clothes or a nicer car, but will these upgrades really make you happy? The goal posts will just keep moving and you’ll never be satisfied.
Trying to get more money at this point could even lead to unhappiness. I’ve met property investors who admit that managing properties is stressful – the role demands that you deal with lots of different people on a daily basis, whether it's difficult residents or maintenance headaches. And yet, there’s always the desire to buy more.
On the other hand, if you get to 60 and you’re fit, well, and have enough money to last the rest of your life, you’re already one of life’s winners. I know you might be looking for excitement or to prove yourself to someone, but is it really worth risking everything you’ve worked for, just for that?
You’d probably be better off doing that skydive.
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