With the restart of my commute, it is easier to restart learning. And what a better restart than finally pick up 100-year life. The concept had been familiar to me for a while, but in all honesty I did not really know what it meant. It was one of those books I avoided for a while fearing it might be transformational and I would not be ready for what it would bring. But given transformation could be my other word of the year (just after fearless), I thought this was the right time to start getting some of these concepts into my life. I was surprised to find a more practical book than I thought, less on the what it means or why we are here but much more on the what to do and how to do it. My type of book.
As such, I am sharing a few of the reflections I took from the book on 3 main topics I particularly care about: i) tangible vs. intangible assets, ii) the financials, iii) the power of transformation. But first, let’s talk about the concept.
What is a 100-year-life?
In practical terms, we know what that means. Means you live to age 100 or more and therefore you need to think of more years in your life. The advances of healthcare have determined that our children will live longer than our great-grand parents and life will slowly expand. And as any slow transformation, it happens slightly unseen and therefore It does not always bring along the adjustments it would require. What does it mean in practice?
- If you still consider the 3 stages of life of childhood-adulthood-elderly, you only have 2 transitions in life as you leave school and as you leave employment. However, a longer life is likely to have much more distinct stages than we have grown up to believe.
- If you still consider you retire at age 65, you spend 35 years of your adult life in retirement. What will retire really mean? What will you do with all that time?
- If you consider that state pensions are drying up, you may indeed have to work for longer. Does that fill you with dread? Then how will you approach it in a way that is fulfilling?
- If you live to 100, will you be able to see beyond 3 generations in a single space? What will that mean for family relationships?
Tangible vs. Intangible Assets
One of the first concepts the authors introduce is this distinction between our tangible and our intangible assets. As well said in not so powerful women empowerment literature:
“You can’t have it all”
The book is written demonstrating various realistic scenarios where the main character goes through life, discussing how his tangible assets evolve – mostly financial – and how the intangible assets go alongside it. We tend to only think of depletion for houses, finances or other easy to measure assets. However, health, energy and relationships are assets that are key parts of life and we don’t often think about until a much later stage, like when they start to fail!
- Like the one that spent his life working to support his family only to find out his family was no longer there when he was ready to slow down
- Or the one that spent her life doing the extra hours and postpone having children only to find out that children were no longer an option after the health damage done to her body.
These are my own biased examples. But it shows that some assets we actually can’t live without. And if we are to live a 100-year-life, we will have to start caring for those much earlier in life than perhaps our parents did. The same ways as we have to work hard to get our financials in order, we also have to work hard to have our intangible assets replenished often and lasting through the different stages of our life, even if at its highs and lows.
Have you ever taken a check of your intangible assets?
This year, as I was doing my goals, I did a status check on it, to conclude my relationship with friends asset had been too depleted and I wanted to reverse that. So I intentionally changed how I allocate my time to keeping some of these relationships stronger than before. Had I not done it, I could wake up on day to find all relationships depleted.
Or 2 years ago, when I started prioritizing my physical health, my sleep and getting exercise. I am still not where i need to be but I have taken marked steps to stop depleting this important asset.
I have been passionate about financial literacy for a while. Or the lack thereof, even for many of those that are exposed to money. That illiteracy compounds when we start doing the maths on how to finance a 100-year-life. For those that grew up investing in state pensions, we know the story of government and how some of those funds will be somewhat (if not fully) depleted by the time many of us reach withdrawal age. Secondly, if we are suddenly extending the number of retirement years (where we are just spending) without making any changes to our working (for an income) years, it is not hard to know we will run out of cash. And finally, income is uncertain through life especially in times of transformation. So what did I learn?
- Actively plan: putting money on a state pension or even a savings account and hoping for it to grow is no longer likely to work. I have recently done our balance sheet (after reading Rich Dad Poor Dad) to conclude I had never thought of it like that. That allowed me to look at it in aggregate, sit down with hubby B and have an active conversation about what we need to do different. We are not where we need to be there, but that active decision has certainly added an intellectual layer of thought that we usually reserve for our work and not for our personal finances.
- Diversify Income: Whilst our balance sheet showed me solid finances, work was almost the sole source of income. We do have pension investments and I have deferred compensation in stock or invested cash. But in all honesty that was all passive. With it in hand I could take a view of how to create different sources of income from my existing assets. And remember, not all your assets are financial. Skills are assets too.
- Portfolio View: I also organized it in liquid and illiquid assets and assessed what percentage we are willing to put on riskier businesses such as real estate or start-up investments, and how much we want to have yielding minimal income but on the low side of the risk. That will depend on your risk profile but also on when you may need the money back.
When our life no longer has 3 stages, it means we have to transform more more often.
One of the assets most people don’t talk about are the transformational ones. What allows you to move between stages, between careers, between working and not working, setting up a business or working full time. The trainings we always say we don’t have time for. The networking events we don’t always make time to attend. The international opportunity we did not take at the right time. The management role you did not apply for as you thought it was a stretch.
Transformational assets are everywhere, they come from a range of professional and personal experiences, and we have to intentionally develop them. The author talks a lot about converting recreation time into re-creation time. I related to that. For years my ‘free’ time has been dedicated to developing very different areas of my life, different assets. At times it felt overwhelming or disconnected. But my mantra seems to make sense after all – make space for growth. Intentionally use free time not just to decompress (which is important), but also to reskill, upskill or broaden horizons. That will be the path for transformation when you need it.
Living a 100-year-life
I have not changed my views dramatically with the book. Perhaps Brene Brown’s Daring Greatly had already got me thinking about how I want to curate life. But it did get me thinking more actively about my financial planning, and my intangible assets planning. Always living with intention.