Before I know it, the day is over.
Honestly, I don’t really remember what I spent my time on or how much.
I move according to the company’s schedule, finish what I’m asked to do, and before I know it, a day, a week, and a year have passed.
That in itself is not a bad thing. However, when I suddenly stopped to think, I sometimes felt, “Is this a life I chose of my own volition?”
When people hear “personal finance,” many probably think of asset formation, investment, or household budget management.
Of course, managing money is important.
However, when thinking about life, money is not the only thing that needs to be managed.
There is limited time.
There is also the knowledge, experience, expertise, and credibility that have been built up over time.
There is a way of thinking that treats all of these as “management resources” for creating your own life.
That is “Personal Finance Management.”
■ What is Personal Finance Management?
In personal finance management, you view yourself as a single management entity.
Companies have a management foundation that supports their business, and they carry out management activities using management resources on that foundation.
The same structure can be applied to individuals.
The basic structure is as follows:
・Management Foundation = Health
・Management Resources = Time/Personal Value
・Personal Value = Money, Knowledge, Experience, Expertise, Credibility
Health is the foundation for managing your life.
Time and personal value are the management resources used to create a life on top of that foundation.
What is important here is not just “having” these things.
It is how you use them.
It is making the judgment yourself.
■ Management resources are things you use by your own will
Time is finite for everyone.
Time once spent never returns.
The same is true for personal value.
Knowledge, experience, expertise, and credibility are things built by investing time throughout your life.
Money can also be said to be one of the things obtained by using time and personal value.
When working as a company employee, the basic principle is to use your time and expertise for the organization.
You receive a salary in return.
This is merely one form of value exchange.
There is no need to continue using your entire life for an organization or others.
Use your management resources—time and personal value—by your own will.
That is the starting point of personal finance management.
To become freer.
To use time for what you want to do.
To invest resources in what is truly important.
To that end, we re-examine our way of life itself.
■ Management activity is “self-actualization”
Time and personal value as management resources—what do you do with them?
In personal finance management, we define this as “self-actualization.”
The self-actualization referred to here is different from self-actualization as a general psychological term.
Self-actualization in personal finance management is as follows:
Using your own time and personal value by your own will.
Investing them in what is truly important.
By doing so, creating the life you desire.
In other words, the management activity of personal finance management is not just about increasing assets.
Asset formation, investment, and increasing income are important.
However, they are merely means to prepare and utilize management resources for self-actualization.
The ultimate goal is to create your own life by your own will.
■ Management means are tools for self-actualization
Management activities and management means must be considered separately.
・Management Activity = Self-actualization
・Management Means = Tools for self-actualization
There are four management means organized in personal finance management:
・4-Bucket Asset Management
・Time Portfolio
・Personal Value Rebalancing
・Stakeholder Communication
4-Bucket Asset Management is a means to manage “money,” one of the personal values, by purpose.
Time Portfolio is a means to consider the allocation of “time,” which is a management resource.
Personal Value Rebalancing is a means to review the composition and allocation of personal values such as “money, knowledge, experience, expertise, and credibility.”
Stakeholder Communication is a means to appropriately build relationships with surrounding people such as family and the workplace, and to protect the time and credibility necessary for life.
None of these are goals in themselves.
They are tools to realize the management activity of self-actualization.
■ Life is something to be re-managed
Life is not something that ends once you make a plan.
The environment changes.
Work changes.
Relationships with family change.
Health changes.
Economic conditions change.
And your own values change as well.
If so, life management also needs to be changed.
Review how you spend your time.
Change the allocation of personal value.
Change where you keep your money.
Review the distance in human relationships.
In some cases, change the way you work itself.
In other words, life is something to be re-managed.
It is not about continuing to force yourself to fit into a life plan you decided once.
It is about re-managing your life according to the situation and your will at that time.
For that purpose, there are management means such as Time Portfolio and Personal Value Rebalancing.
■ Management activities considered by stage
Personal finance management can also be thought of by dividing life into stages, rather than viewing it as one long period.
For example, in a case where the goal is to semi-retire at 55 and fully retire at 60, it can be organized as follows:
Until 55 — Life Restructuring
This is the stage of restructuring the life structure so that you can semi-retire, rather than just extending your current life as it is.
From 55 to 60 — New Value Creation
This is the stage of being freed from time centered on working as a company employee, and using the time created and the personal value cultivated to generate new value.
What will you learn?
What will you create?
How will you combine knowledge, experience, expertise, and credibility?
Commercializing value or turning it into assets also comes into view.
That is why it is important to prepare little by little from now, rather than starting to think about it after retirement.
After 60 — The stage of thinking from here on
Management activities do not disappear after full retirement.
The need to invest time in an organization disappears, and the scope in which you can use time and personal value by your own will expands even further.
What will you do?
What will you not do?
What will you spend your time on, and what will you value?
You will re-manage your life again according to yourself at that time.
■ Summary
Let’s reorganize the structure of personal finance management once again.
・Management Foundation = Health
・Management Resources = Time and Personal Value
・Personal Value = Money, Knowledge, Experience, Expertise, and Trust
・Management Activities = Self-Actualization
・Management Tools = 4-Bucket Asset Management / Time Portfolio / Personal Value Rebalancing / Stakeholder Communication
Life is not a fixed plan.
As stages change, management activities change as well.
Personal finance management is not simply about managing money.
It is about using your own time and personal value by your own will, investing them into what is truly important, and building the life you desire.
That is the concept of personal finance management.
Life is not something to be managed by someone else.
Manage your own life yourself.
The perspective for doing that is personal finance management.
