Growth Doesn't Stop When You Retire

The power of giving can come as a shock. Recently an organization our firm is involved with was raising money for some special projects and asked for donations. Only a small donation would fit in the budget. However, I’ve been around enough givers to know some tricks. If we are fortunate enough to sign any new clients in the second half of the year, why don’t we give ten percent of the new revenue as a donation? That worked for our budgeting process, so we readily agreed.

Holy Moley, did this work. We ended up giving more than ten times what I contemplated before deciding on this strategy.

It felt good, too. It still feels good to recall. Not perfect; it would have been nice to give immediately upon the request and not wait six months for the revenue. This episode has set my sights higher with giving, that’s for sure. Even because I’m self-interested.

This story comes to mind because I often meet people who are already doing a lot right. They diversify. They keep costs low. They live within their means. They’re not chasing hot stocks.

In these cases, why would I argue that it might be worth it to pay an advisor? What do my benevolent clients teach me?

Well, picking the right investment strategy is the first big step and it gets you far.

Many of these people are far more financially successful than they ever expected to be. By continually learning and growing, maybe in a low-key way that they don’t think about much, they’ve gotten more than they dreamed of. Again, they might not reflect on this often, but when they do, they feel a wow.

And they think when they retire, maybe that growing and learning with finances will end.

Hmmm. That’s where we can do something.

What I’ve found in practice is that expanding skills and growing can end when you retire, but those qualities don’t have to.

Research suggests that thoughtful tax planning can add meaningful long-term value — not flashy, but cumulative. According to research by Vanguard, there’s as much or more to be made from tax planning when you’re taking your money out than when you’re accumulating.

Tax planning is rarely dramatic. But over 10 or 20 years, small improvements compound in ways that meaningfully expand what’s possible.

For disciplined investors, the next layer of growth often isn’t about taking more market risk. It’s about reducing friction — taxes, coordination gaps, missed opportunities.

Then we have people in a situation where their finances have grown in retirement. And they develop new skills. These skills are around better giving.

Effective giving—enough to help and uplift but not create an unsustainable dependence—is that an art, a skill, a craft? I don’t know, figuring it out is a fun project to work on, at least for these people. They expand in a different way than they did during their working years.

Their giving typically happens in four ways:

Give to themselves.

These people give to themselves through more spending, but not that much. The spending tends to be maybe a cushier car or airplane seat.

Give to their family & friends.

They give more to their family to celebrate and create great memories. They treat everyone to a cruise or blow out anniversary celebration for the kids and grandkids. They give each niece and nephew a chunk of money and say--spend it on yourself; I want some pictures.

They give to people they don’t know.

Carol Burnett talks about how when she was struggling to get her start, she performed at a party. While she was at the buffet, she met a mysterious man and his wife. When the man asked her what she wanted to do with her life and she replied she dreamt of Broadway but didn’t have the means, he wrote her a check for $1000 (today around $12500). She promptly got on a bus to New York.

They try to improve the world.

They increase their giving to their favorite causes in the world. Bert Whitehead recently talked about how much he enjoys providing matching funds. Matching funds encourage more growth in giving, and he likes to super-charge the growth.

The most interesting part of my work isn’t squeezing out another dollar. It’s helping people use their resources in ways that expand their lives.

When it comes to giving, I’ve got book learning because I’m a happiness nerd, but I’ve got a lot to learn.

The basics of investing are widely known now. That’s a good thing.The more interesting work — the work that keeps me engaged — is helping thoughtful, successful people use their resources in ways that expand their lives and their impact.

If that’s the stage you’re in, it’s a fascinating one.

It’s not that enough isn’t enough; it’s that more is more.

Links:

Vanguard study: https://advisors.vanguard.com/content/dam/fas/pdfs/IARCQAA.pdf

Carol Burnett Story: https://youtu.be/wHBUIh6pYa4 

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