Do any of these additional topics appeal to you?
In my last blog post (http://donezra.com/96-where-next/) I asked for your assistance and input. I think that post generated more comments than any before it, thanks very much! Decumulation came though as the topic of most interest to you, followed by engagement. And you also provided me with angles I had not considered before. It’s already clear to me that dialogue with you will enhance my view of any topic I’m interested in.
Now I continue my request.
You’ll remember the background. Having completed researching and writing Life Two and Freedom, Time, Happiness, I have a number of new research avenues I’d like to travel along. And while I’ll travel along all of them eventually, it’ll help me very much to prioritize them if you tell me which ones are most interesting to you.
Last time I outlined four of them: individual financial dilemmas; emergency savings; increasing participant engagement in connection with retirement issues; and decumulation. Here are four other avenues that interest me.
As before, I request your input.
5) Issues that affect investment indirectly
Climate change is the obvious one. But more broadly, issues called “ESG” for short are what I’m thinking of here. “E” stands for “environmental,” and relates to issues that affect the depletion of natural resources and their sustainability for future use. “S” stands for “social,” and relates to issues that are of concern to the future of society, such as human rights, consumer protection and diversity. “G” stands for “governance,” and includes issues relating to how companies are run, such as the power/management structure, executive compensation and employee relations.
Some people consider these to be moralistic issues, others don’t. Regardless, if they affect asset prices and prospects, they need to be taken into account in making investment decisions, whether the relevant time horizon is long (they’ll affect prices some time, but don’t seem to do so now) or short (they affect prices today).
Mike Clark’s comment on the previous post adds another angle: whether different generations view the issues in different ways.
My interest in these issues is partly to understand the issues better and partly to understand how they affect individuals’ investment choices.
6) Accumulate health
In the same way that we can build up assets that we then draw upon for financial health later in life, we can do something similar with our physical health: build it up early so that we have more to draw upon as we age. This is a notion that was introduced to me by my doctor, who knows exactly how to get inside my head! He knows about my book, and encouraged me to study the health analogue of accumulation and decumulation; he’ll help me once I’ve done my own independent research into the subject. My personal trainer, with whom I have many fascinating conversations and who also knows how to get inside my head (I’m a lucky guy!), also encourages me to look in this direction.
I’ll include as a part of this topic (though it may prove to be entirely different) the difference between chronological and biological age, a topic that my longevity guru Dr Moshe Milevsky has written about many times, most recently in a book (https://www.amazon.com/Longevity-Insurance-Biological-Age-retirement/dp/1790658268/ref=sr_1_1?qid=1553104443&refinements=p_27%3ADr.+Moshe+Arye+Milevsky&s=books&sr=1-1&text=Dr.+Moshe+Arye+Milevsky). It’s obvious that as individuals we age at different rates, and even that different parts of our body age at different rates: for example, in their later years some people are more capable physically than mentally, others more capable mentally than physically. What stage has the science of measuring biological age reached?
In my mind the connection between the two issues here is my vague hypothesis that if one succeeds in accumulating health, it ought to improve the chance that one’s biological age is younger than one’s chronological age, and therefore that one’s future life expectancy is higher than average.
7) Financial wellness
Increasingly, employers are introducing services for the benefit of their employees, in connection with physical, mental and financial wellness (or wellbeing – there doesn’t seem to be standardized terminology yet, as these services are relatively new). This seems to be a win-win introduction, because not only are the employees healthier, the employer gains via enhanced contributions to productivity. As far as financial wellness is concerned, this goes far beyond retirement-related considerations; indeed, the need is very great at younger ages too, particularly in countries where student debt is high.
My interest here is to understand the state of the art today, and what it may become in the future: topics covered; how information is collected, used and reported back; the extent to which it engages and educates and benefits employees; measures of employer benefits; and even (though this is much broader) related social policy issues.
I’m also wondering about the relationship between financial literacy and financial wellness: is there a correlation, and if so, is there causation in either direction? To take out the geek-speak: which comes first, literacy or wellness? It seems like a chicken-and-egg situation.
8) A new map of life
This is a notion that the Stanford (University) Center on Longevity (http://longevity.stanford.edu ) is pursuing. I’m lucky enough to know some of the people involved and some of those on their advisory council, so I hope I can stay in touch with developments. (I don’t expect to contribute to their research, just to follow it.) The idea (at least in my understanding) started with Dr Laura Carstensen’s book (https://www.amazon.com/s?k=a+long+bright+future+laura+carstensen&crid=Z51VPSF5ITUM&sprefix=a+long+bright+future,aps,159&ref=nb_sb_ss_i_3_20) A Long Bright Future, which says: if we knew in advance that we were likely to live for 100 years, how would we re-pace our lives? If you’ve read my books, you’ll know that I’m very taken with Laura’s premise and ideas, and have cited them in my last three books.
These four directions seem to be broader in their scope than the four in my last blog post – not that that matters, really. And inevitably they’re all inter-related too – which again doesn’t matter. If you know me at all, you’ll understand why all eight topics are very interesting to me, and excite me as I delve into them.
I said at the start that I plan to look at all of them. My purpose in seeking your input is to prioritize them.
I have written about retirement planning before and some of that material also relates to topics or issues that are being discussed here. Where relevant I draw on material from three sources: The Retirement Plan Solution (co-authored with Bob Collie and Matt Smith, published by John Wiley & Sons, Inc., 2009), my foreword to Someday Rich (by Timothy Noonan and Matt Smith, also published by Wiley, 2012), and my occasional column The Art of Investment in the FT Money supplement of The Financial Times, published in the UK. I am grateful to the other authors and to The Financial Times for permission to use the material here.