Last week I discussed Ikigai (生き甲斐), a Japanese concept that translates to “a reason for being.” I believe investing has its part to play in Ikigai - so what might that look like?
Ikigai and investing can intersect in meaningful ways, aligning your financial strategies with your personal values and purpose. A great example of this is Environmental, Socially Responsible and Good Governance (ESG) investing.
Just as ikigai encourages you to find purpose in life, purpose-driven investing involves choosing investments that reflect your values and passions. This could mean investing in sustainable, ethical, or socially responsible companies.
ESG, or ethical investment as some call it, ties into the ikigai concept of harmony and sustainability. This says that we should be looking at the impact our actions might have on society at large, and the environment.
While choosing ESG options may not be on the forefront of every investor’s mind, the visibility of issues we face locally and globally has many investors looking for more robustly filtered options. It makes sense; it’s your money going into the investments, so there must be somewhere that a line can be drawn.
In many cases now, there will be some kind of ‘ethical fund’ or similar on offer alongside traditional investment options. Just be sure to check what this includes – or more tellingly, what it doesn’t exclude – before you sign on.
Ikigai also emphasises long-term fulfilment, which aligns with the principles of long-term investing. By focusing on investments that promise sustainable growth, you can achieve financial stability while staying true to your purpose.
Remember – what burns hot, burns fast. Avoid getting singed by ‘get rich quick’ and ‘sure thing’ type investments, as they almost always don’t turn out that way. The tried-and-true way to financial success is slow and steady, and not very exciting at all.
Finding your financial ikigai involves balancing risk and reward in a way that supports your overall well-being. This means creating a diversified portfolio that aligns with your financial goals and personal values.
Part of ikigai is continuous self-improvement. Investing in education, skills development, or personal projects can enhance your abilities and contribute to your sense of purpose.
Ikigai often involves contributing to the community. Investing in local businesses or community projects can provide financial returns while also supporting the well-being of your community.
5 Ways to Integrate Ikigai in Investing
Identify Your Values: Reflect on what matters most to you and seek investments that align with these values. If you can’t get a straight answer on whether a potential product or class of product aligns with your values, you might like to keep looking. Transparency from the provider is very important to making sure you are getting what you want.
Research Ethical Investments: Look for accredited fiduciary Financial Advisers, funds, or companies that prioritise sustainability, social responsibility, and ethical practices. You want to look for transparency, and trust marks – for example, are the advisers CEFEX certified? Is the company a B Corp? These are both independent assessments that go beyond what is required to do ‘good’ investing.
Diversify Your Portfolio: Balance your investments across different sectors to manage risk and support long-term growth. Do not ignore the key foundations of robust prudent investing, such as the Fama French Theory.
Set Long-Term Goals: Define clear financial goals that align with your life purpose and work towards them steadily. Long term thinking can have much better outcomes than short term thinking – in finance as in life.
Stay Informed: Continuously educate yourself about investment opportunities and market trends to make informed decisions.
By integrating the principles of ikigai into your investment strategy, you can create a financial plan that not only supports your wealth goals but also enhances your overall sense of purpose and fulfilment.
Ikigai is not static; it evolves as you move through various stages of life. From our youth to our sunset years, understanding how Ikigai can guide each stage provides a framework for continuous growth and inner fulfilment, and dare I say it - happiness.
It also encourages you to keep active, stay curious, and always seek to learn. It is a continuous process of self-discovery and growth. By following these steps, you can move closer to living a life filled with purpose and fulfilment.
Embracing ikigai is about living a life that brings you joy and purpose every day. Whether through work, hobbies, investing, business or relationships, discovering your ikigai can lead to a more fulfilling and meaningful existence.
While you can find your ikigai on your own through reflection, finding the best route for your financial journey (and being able to change it to suit your circumstances when life happens) is something that can be made easier with the help of a financial adviser. They can take the burden of financial planning off your shoulders, so you have more time to focus on living your best life – now, and in your future.
Bruce Jenks is a financial adviser at Stewart Group, a Hawke’s Bay and Wellington-based CEFEX & BCorp certified financial planning and advisory firm. Stewart Group provides personal fiduciary services, wealth management, risk insurance and KiwiSaver scheme solutions. Article No 387.
The information provided, or any opinions expressed in this article, are of a general nature only and should not be construed or relied on as a recommendation to invest in a financial product or class of financial products. You should seek financial advice specific to your circumstances from a Financial Adviser before making any financial decisions. A disclosure statement can be obtained free of charge by calling 0800 878 961 or visit our website, www.stewartgroup.co.nz
