A former classmate told me on a sweltering Tuesday in August of last year that she had cashed out of her high-yield portfolio early to purchase an RV and spend six months traveling across the country with her children, not out of fear of the market. “It is an investment in our memories,” she remarked with a giggle. I gave a kind nod at the time. Weeks later, it became clear to me how much her choice aligned with lifestyle investing, a new financial theory that is quickly gaining popularity.
Investing has historically been presented as a controlled ascent. The top? Retirement. However, a growing number of individuals are questioning if the summit view is worth a lifetime of forgoing the surrounding landscape. That question is addressed by lifestyle investing, which shifts attention to the present. It’s responsive rather than careless.
Key Elements of Lifestyle Investing
| Element | Description |
|---|---|
| Core Focus | Investing with purpose to support present-day experiences and long-term goals |
| Popular Among | Millennials and Gen-Xers who value meaning, flexibility, and real-life returns |
| Financial Strategy | Customized investments supporting life goals like travel, health, and time freedom |
| Non-Monetary Assets | Time, education, relationships, wellness, and personal growth |
| Investment Examples | Sabbaticals, value-aligned real estate, career pivots, second degrees |
| Expert Voice | Paul Deer, CFP®, Empower Vice President |
This tactic, which is especially well-liked by Millennials and Gen-Xers, asks, “What matters most to me in this season of life?” For some, it’s the freedom to change occupations without feeling guilty. For others, it’s the opportunity to routinely explore the outdoors, spend more time with loved ones, or work on passion projects. These ideals don’t wait for old age to become obsolete. They help to mold the future.
According to Paul Deer, an Empower Certified Financial Planner, lifestyle investing reinterprets wealth. With this approach, money is viewed as a resource to build a meaningful life, both now and in the future, rather than as a tool for safety. It is quite similar to the way individuals approach physical health: establishing a balance between long-term maintenance and daily movement.
Deer’s main finding is that younger investors are significantly less concerned in setting a retirement age. Rather, they want their assets to support sporadic improvements in their lives, such as a little house, a yoga teacher certification, a vacation in Portugal, or even a change to a more rewarding but lower-paying career. It is not a diversion. They’re the places to go.
By establishing short-, medium-, and long-term objectives, lifestyle investors develop a plan based on their personal experiences. For some, that entails saving hard to purchase a vacation house while they are in their 40s. For some people, it involves creating a work schedule that accommodates volunteer work or bike rides in the afternoon. They may not always yield financial gains, but they are incredibly successful at creating contentment.
One thing that comes up frequently in my discussions with people that adopt this strategy is clarity. They’ve taken the time to think critically about how they envision their lives—not only for the future, but even for the coming month. Their budget, priorities, and even the possibilities they turn down all demonstrate this clarity.
This approach respects life’s natural rhythm in terms of finances as well. Because they frequently have more time than money, early-career investors are well-positioned to take measured risks that could result in long-term profits. They could make educational investments, engage on a side project, or take on flexible freelancing job. Priorities change as time goes on and assets increase.
As they get closer to retirement, older investors have more money, but time is running out. Whether that means purchasing real estate close to grandchildren, contributing to charitable causes, or just making room for relaxation, lifestyle investing here turns into a means of maintaining agency. Despite their financial considerations, many decisions are motivated by emotion.
People’s perceptions of time are also made more intelligent by lifestyle investing. According to Deer, time is an asset that should be used carefully, just like money. A growing number of investors are assessing how to create value over time, whether it be in the form of growth, impact, or restoration rather than just income.
Lifestyle investment shifts away from the notion that only productive hours matter by utilizing time as a factor of return. Taking a year off may not result in a salary, but it may inspire a creative rebirth that creates whole new sources of revenue. Alternatively, it might just give you the breathing room you need to make better choices again.
This change also has an educational component. With previously unheard-of accuracy, investors are learning how to customize their financial strategies. Strategies are no longer universally applicable. Even if two people have the same income and savings, they may choose very different careers because one wants to travel and retire early, while the other wants to work part-time and paint. Both are correct. They’re all optimized.
Lifestyle investing is sometimes framed by critics as a luxury approach, suggesting that only the wealthy can afford it. That’s missing the point, though. This is about intentionality, not about luxury. Acts of alignment include postponing graduate school for a few years to create a cushion first or deciding to spend less on housing to finance more travel. They show an increasing resistance to letting money rule life without question.
The concept of being “smart with money” is being redefined by lifestyle investors through strategic preparation and a readiness to question antiquated financial scripts. In addition to growth, they also look for alignment, making sure that their portfolios represent the lives they genuinely wish to lead.
Reviewing the account of a couple who had downsized their house to start a community kitchen was, in my opinion, the most enlightening experience. They weren’t going to wait until they were 65 to change things. They were investing in purpose right away, and the results were very evident.
This movement’s flexibility is what makes it so beautiful. There is no strict model, just a common conviction that having money should enable a fulfilling existence. Without compromising caution, it encourages people to prioritize connections, experiences, and values in order to create richer lives in real time.