Why do your values matter when it comes to investing?

We all have values that we live by. They are the motivational drivers that help us determine what’s important in life. They give meaning to the things we do. They are individual to us, guide our behaviour, and allow us to feel fulfilment in life.

But we’re not always consciously aware of what our values are. Many of us rarely spend time stopping, thinking, and considering our values. Not knowing what we truly value in life can lead us to make bad decisions inconsistent with what we want to achieve in life. It can cause us to escape into bad habits or look for quick wins to uplift ourselves.

It’s easy to dismiss values too. Instead, we focus on what our society, culture, or community values and try to meet these expectations. We don’t spend the time to articulate what our top five values are. And, it takes a lot of effort to know and accept what you value. 

This will often lead to decisions being made that don’t lead us to live our best life. We hit key turning points in our lives and do what society or others expect us to do. Not what we want to do for ourselves or those we love. 

For example, many of us, from a young age are encouraged to save for our retirement. We spend the majority of our lives working hard to do all the things we want when we retire. This is drilled into us so much that we are saving more than we need for retirement, with many people leaving their retirement savings untouched or spending down only a little. 

A school of thought suggests saving makes us feel happy and fulfilled. However, this is just a mask for what behavioural economics calls loss aversion, the observation that humans experience losses asymmetrically more severely than equivalent gains. This overwhelming fear of loss leads us to make bad decisions, behave irrationally, and give lawyers the job of bequeathing our assets to those we love.

Understanding our values can help us make better decisions. The above example can help us reduce our fear of loss and turn it into a positive gain by giving our money meaning and spending it on something truly important to us. Our values help us define what success looks like for ourselves. And when we begin to live a life that meets our success criteria, we feel more fulfilled and happy - even if it means spending the savings we’ve spent years to create.

Values Matter

So, values matter to all of us. They are our guiding principles or guardrails that can keep us living our best life. And when we achieve our goals, we feel a sense of meaning and purpose. We feel good about ourselves and driven to continue to live a life full of purpose.

But defining what you value is hard. There are so many words to choose from. You’re often too busy to stop and wonder what really matters. This is where we come in.

Using a framework based on the eight dimensions of wellbeing can help you to uncover what you value in life. These eight dimensions are outlined below:

Environmental: Related to the surroundings you occupy

Physical: Affected by physical activity, healthy nutrition and adequate sleep.

Intellectual: Seeking out ways to use your knowledge and skills.

Spiritual: Related to your values and beliefs that help you find meaning and purpose.

Emotional: Ability to cope effectively with life and build satisfying relationships with others.

Financial: A feeling of satisfaction around your financial situation.

Occupational: A feeling of satisfaction with your choice of work.

Social: A sense of connectedness and belonging.

We work with you to determine a set of household values and then set goals and tasks to help you live a life more aligned with your values. We also keep you accountable, helping you to make decisions that take you closer to achieving your goals. And, we measure how you’re going and help you see the successes and failures so that we can continue to make the best choices for both now and in the future.

Why not take the first step in getting to know more about what you value in life by completing our Your Life survey. The survey helps to identify what’s important to you in life, and then determines how close you are living a life aligned with that value. You will receive a score at the end of the survey based on your responses. Our advisers can then work with you to improve your score. Empowering you to live your best life by aligning your finances with your values.

Author: Angus Dockrill

Angus is a Director and Wealth Specialist at IMFG. Angus helps people to improve their quality of life and peace of mind by making smarter financial decisions. See his profile here

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