Memory Dividends and ROL

Everything you spend money on is an investment. But some investments pay off longer than others.

If you buy a new cell phone, a year later you have ... an old cell phone that you're probably thinking about upgrading.

The same holds true for buying new clothes, a new car, or even a bigger house. After a while, the shine wears off even the shiniest of purchases. They become just things you own. And after time, they become things you consider replacing.

Study after study has found that investing in experiences brings more lasting happiness than buying stuff. In part, that's because experiences don't just pay off when you open the box or try on the new shirt. They create "memory dividends" with a return on investment that can continue to compound forever.

The Three Stages of a Rewarding Experience

"Hedonistic adaptation" is the phrase behavioral scientists use to explain why your new phone doesn't feel new for very long.

In short, people are adaptable. While buying things can make us feel happy, we quickly acclimate to our new normal. It doesn't take very long for your "new phone" to turn into "my phone." As the "new" feeling goes away, it takes the short burst of happiness away with it.

Experiences affect our brains in a completely different way.

If your family decides to take a vacation, there's more to that experience than just the vacation.

First, there's planning: researching where you're going to go, where you're going to stay, what you're all going to do. You might even create a calendar for counting down the days, which builds the excitement and anticipation you're all sharing even more.

Then, there's the event itself: the thrills at the theme park, the fine dining, the shows and performances, and the relaxation of stepping away from your daily routine.

And once you return, the memories of that trip start paying dividends when you're looking at photos, enjoying souvenirs, and reminiscing about the great time you had together.

Buying stuff might involve some planning and anticipation. You might enjoy opening your phone, downloading new apps, and playing with the camera. But no matter how great your new phone is, it can't reach that third stage that creates true, lasting happiness.

Investing Early for Maximum Returns

You've probably explained to older children and teens that the earlier you start investing, the sooner compound interest can start working its magic.

The same is true of memory dividends.

Many families put off big ticket experiences "until the kids are old enough to appreciate the trip."

But even if your children don't remember every detail of a vacation, the experience can still have a formative effect.

They'll gain early experience and comfort with travel.

They'll gain confidence leaving the comforts of their daily routine and experience why unplugging and resetting are important.

They'll learn about other people, cultures, and ways of life.

And they'll learn, from you, that investing in time together is more valuable than investing in material goods.

These lessons aren't just about leisure -- they're building blocks to future success.

Plus, the sooner you make investments in memories, the longer your whole family will have to enjoy them, learn from them, and use them as inspiration to make more memories together in the future.

Don’t Wait to Diversify Your Portfolio

Another common reason that families put off investing in experiences is because they worry about spending too much money, or taking too much time off from work or school

But if you keep waiting until “the right time” for a family trip, it may never come.

Like any other financial goal, memory dividends don’t just happen. They’re planned for. Let’s talk about the experiences that could enrich your family’s Life-Centered Financial Plan for decades to come.

At LI Wealth Management, we believe some of the most valuable investments are the experiences that bring your family closer together. Vacations, adventures, and time spent creating memories can enrich your life long after the experience ends. Visit our website or book a free session today. Together, we'll review your Lifeline and create a Life-Centered Financial Plan that helps you make room for the experiences that matter most.