When I was asked to contribute a thought mailer column for the esteemed BCAS community, there were many topics that came to my mind. However, then I read with great interest Mr. Vinesh Antani’s recent thought mailer, titled, “Quest for the Purpose of Life.” I couldn’t agree more with what he had written as I have been practicing “Purpose” in my own personal and professional life. Thus, I thought of writing this column as a perfect continuation to Mr. Antani’s column on the subject of Purpose and Money.
You might be wondering about this vague equation (headline), which is neither mathematical nor scientific. That is the beauty of this equation as there is a lot of invisible power hidden inside it. You will experience it as you read this thought mailer.
What is this HappyRich?
Aristotle declared “Happiness” as the Summum Bonum”, the chief good. People have desires, such as power, wealth, losing 10 pounds , signing up that prominent client, as they feel it may lead to happiness. However, their real goal is happiness.
All over the world, when I asked what people want most in life, and what they want most for their children, each and every one answered “Happiness.” “I want my child to be happy”, was the answer.
Additionally, I have asked people “What is the Purpose of your Life?” Though it’s a very profound question, and people find it difficult to answer, no one has ever told me that the purpose of my life is to earn a 15-20% return. Yet, when it comes to investing, this is what most people think about – Returns and Higher Returns.
It’s a myth that More Money = Happiness.
Yes, we have all heard that it is better to cry in a BMW than cry on the road. However, what matters at that point is that you are crying and unhappy. Your location is not relevant, you are just like the other person crying on the road. The point is that if “More Money = Happiness” were indeed true, the richest people would also be the happiest; the most seemingly beautiful and rich people would not be depressed.
Before you jump to bash me, let me clarify – money is important and extremely necessary but what is more important is what money can do for you that will give you happiness. What can money do for you? In short – Purpose, the Why of Investing.
Research, science and your own experience will show you that the joy of buying an iPhone will decline in a couple of days and next year you think the next iPhone will make you Happy but the reality is truly elsewhere.
There are 6 things you can do with money
1.Waste it (Excessive Partying, Smoking your Lungs)
2. Buy Things you need (Food, Clothes, Education, Home, Car and many other things)
3. Spend it on Lifestyle (Your wants whether that Gucci Bag or Apple Watch)
4. Save and Invest (for meaningful goals and experiences; in short for Future You)
5. Give it
6. Hoard it (Yes you do accumulate money but all you do is think about money all the time and not let it do anything for you.)
Which of the above 6 give you meaningful and long-lasting happiness?
You need to answer this for yourself. You can pick any and say that it will make you Happy but there is no point doing it and learning after years that it won’t in fact, make you happy.
Let me save you some time… research done all over the world has shown that beyond your needs, true happiness from money comes only when you spend money on
• Experiences like taking a vacation with loved ones or by yourself, attending that music concert, taking that 7 day course that you always thought of, etc.
• Save it for a meaningful purpose like taking care of your loved ones, se-curing your child’s education, safeguarding your future, etc.
• Give it away to help people. Giving and helping others has been one of the most gratifying activities.
At a broad level, your duration of happiness increases as you move from Pleasure to Purposeful living
• Pleasure: Pleasure is often Temporary (like buying new stuff, eating, movie) Happiness from such activities can last for a few hours to a few days at best. This is because the Law of diminishing returns is at work. For example, you eat a lovely meal and it’s delicious and gives you a lot of pleasure. Eat it over and over again for the next few days but you won’t feel the same level of pleasure as the first meal.
• Purposeful Living: Living with higher purpose e.g. altruistic goals such as Spreading Happiness, helping someone or making a real difference in people’s lives or doing things that have a greater meaning to you creates lasting happiness.
This does not guarantee that you will not feel sad or not have a bad day. You certainly will but overall, you will be happier if you think of money in this manner and do things with money that will help you live a fulfilling life. Shifting to this way of thinking about money is a small change that could result in a big difference. The wisest and happiest of people have understood this and they do things with money that helps them get the best return on life.
In short when your purpose meets money, you become what we call HappyRich.
Richer by an Education
Richer by an Experience
Richer by a New Cuisine
Richer by Helping Someone
Finally, I am sharing this very powerful insight by Dr.Moira Somers that is written in her book “Advice that Sticks”.
“When it comes to clients not following through with recommendations, it’s rarely because the advisor is technically unskilled or incorrect. Instead, it’s usually because the personal side of things has been neglected or misread. If you’ve been working with people and their money for any length of time, you will likely have come to the conclusion that the technical side of advising is comparatively easy. It’s the ‘soft’ side that’s the hard side!”
I have practiced this for long enough to say that the soft side is not only the hard side but the most valuable part of every client relationship. You have no choice but to Master this. Like I have said several times “Personal Finance is more about Personal than it is about Finance.” Don’t make it about numbers, and money. Make it about the client’s life.
Mitch Anthony brilliantly wrote “Your Life is not about Making Money. Your Money is about Making a Life.”
Help your (yourself) clients become HappyRich, which is all about living the life they (you) have imagined with their (your) money.