Money is the primary source of stress for most individuals. A study recently conducted in the US found that 82 percent of participants aged 18-34 considered money to be a significant stress factor. In comparison, the figure was 77 percent among individuals aged 35-44 and 63 percent among those aged 45-64. In other words, experiencing financial anxiety is not only normal – most of us suffer under its weight.
The decrease in worry with advancing age is primarily attributed to older individuals’ greater ability to meet their most fundamental prerequisites for contentment – being able to support themselves and their families. Only once this security is achieved can one invest in non-essential, yet value-adding aspects of life.
Now, it may seem logical that the stress associated with money would dissipate once a certain amount is accumulated in one’s bank account, no? Well, it is actually not that straightforward.
Despite having sufficient funds to cover both necessary and discretionary expenses, unease and anxiety are likely to persist. It is common, for example, to feel uncertain about asset management or how one’s child will be able to handle their inheritance. Perhaps you have inherited a sum yourself, where the fear of losing or jeopardizing what someone else has worked for can be overwhelming. In these thoughts, the anxious voices in one’s head can easily hinder the pursuit of peace of mind and the ability to truly enjoy what one has.
Seeking guidance from a financial advisor can alleviate pressure and provide reassurance when navigating feelings of anxiety. It can also be essential in distinguishing between rational and emotional decisions. In 2022, Vanguard, one of the world's largest fund managers, undertook the challenge of quantifying the value of a financial advisor. The study concluded that independent advice can result in three percent higher returns per year, on average over time.
At Lyra, our goal is not only to enhance the quantitative value but also ensure our clients feel at ease on their journey toward their goals.
References
American Psychological Association, Stress in America 2023: A nation recovering from collective trauma
Vanguard 2022, Putting a value on your value: Quantifying Vanguard Advisor's Alpha
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