Happiness and Wealth (Feb.2017 Letter)

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Happiness and Wealth (Feb.2017 Letter)

Wealth and happiness are linked, but not as advertised, because (recall poor King Midas) happiness is not so much in Wealth as in the Living.  We come to recognize there are inner values that shape how we turn wealth into a lifetime of happiness!

What would it be like if money could buy happiness?
Would this be a good thing?

If you could flip a switch and suddenly be wealthy and happy, how would this be?  Or if years of diligent savings had prepared you to enjoy a life of leisure and luxury travel, would this be the ultimate “happy”?  Research over several decades has studied the relationship of money and happiness.  I can share some of this here, and I urge you, please reply back with your own perspectives and insights.

Wealth and Happiness

If wealth and happiness were closely linked, we would be on top of the world because our readers are in the top 3% (or 1%) of wealth in the world today.  Ponder for yourself if this has been making us a happier society, or should we explore further?

A person today with over $70,000 (Canadian) is wealthier than half the world’s population.  If the value of your home, savings, and pensions is $750,000 you’re in the top 1% of world citizens.  Toronto and Vancouver should be hotbeds of happiness!  But even there, many get a chill when neighbours bring home a new car, new boat, home renos, or leave on a dream vacation.  Comparisons with others have always tended to cause people unhappiness!

Give ninety-seven children two cookies each, they’ll be fairly happy.  Open a curtain then to reveal three children delighting themselves in cookies, pies, cake, ice cream, and soda floats.  How will the larger group of children feel by this comparison?  … In similar manner people have spent money they didn’t have, to drown in debt they didn’t want, supporting lifestyles they couldn’t keep … so when time came to retire – or early retirement was forced on them – the pain hit home.

  •   Money cannot buy happiness,
  •   but poverty cannot buy anything.

Sudden Wealth

This is why lotteries are popular.  Nearly 75% of Americans say winning the lottery is their main hope for happiness.  Winning could end every worry, pay off debts, buy everything you want, still have enormous wealth to do as you please! What could be better than walking into this advertised dream of finding yourself suddenly rich!  (Except the money is typically gone in less than 18 months.)

If sudden wealth really made people happy – permanently happy – lotteries could live up to their advertising.  Research shows, though, that winning a lottery also brings experiences that are less than happy.  It tends to diminish, in hindsight, the memories of what used to give happiness.  Also as I shared in chapter 4 of “A Lifetime Of Wealth” (2013) lotteries alter friendships, agitate family relations, and in some cases lead to kidnappings and worse.  A surprising number of “winners” report their past life was simpler and happier.

Consider today, someone is going to hit a big win, as someone else suffers an accident and becomes paraplegic.  If there were a line to enroll for one of these experiences, we know which line would be longer, and which shorter!  Surely winning the big lottery would be superbly happy while becoming paraplegic would be tragically sad.

So in a classic study by Philip Brickman (repeated various times since) people have been divided into three groups.  One group included recent lottery winners.  Another included people who had become paraplegic in the past year.   A control group was also tested to offer context and clarity.  On a scale of 1-to-5 the control group averaged 3.5 as a measure of their happiness.  The paraplegics on average put their happiness as 3.8.  Lottery winners rated themselves at 3.2.  Such studies all show similar results.  Each of the three groups give a wide range of replies but on average the paraplegic group is happier than the control and the lottery winners!

Slow Wealth, Healthy Wealth

Most people with money built it through hard work and ongoing care.  This can include all kinds of employment and also those who own or manage businesses.  My 2015 book, Your Business, Your Retirement, resulted from studies and interviews with such people.  In a nutshell these people as a group were reasonably satisfied in their current life but looked ahead with some concern and worry about the future.

These people could fit the “control” group of the Brickman study.  Their happiness level would range 3.5 or so, actually happier than people who had won lotteries.  But on a scale of 1-to-5 it’s clear that 3.5 isn’t perfectly happy.  They still have questions, uncertainties, worries.  Their biggest worry was not knowing if they had enough money to retire, and without guidance they don’t know how to turn wealth into a happy, lasting retirement.  Other worries were about how to spend their time, how to socialize after leaving work, what purpose or ongoing impact their life would have, and getting clear about “identity” when work-based roles and titles are removed.  We’ll come back to these sometime or speak further personally . . .

You can check some intriguing resources (see links below).

Can Wealth boost your Happiness

I think of wealth as the fuel to run your ship.  It allows you to create life experiences that otherwise you would never get to enjoy.  Without fuel your ship cannot come in, and you won’t be on board when it leaves.

Wealth alone doesn’t give a plan, won’t choose a neighbourhood, cannot select vacations or entertainment, buy tickets, or ponder life’s true and lasting purpose.  It does however allow you a better space in which to do these things.

Research has concluded that increasing income can help people feel happy (for a while).  Working at minimum wage is very hard, so increasing income will certainly help.  Yearly income at $50,000 is easier than at $30,000.  Income at $75,000 is better still and allows more choices of clothing, foods, family activities, even working fewer hours.  As income passes $100,000 the increased happiness of each dollar grows less.  At $125,000 people report that each additional dollar gives a smaller boost to happiness.  (Various regions or families may experience this differently but there’s still a point at which more money gives a smaller lift in happiness.)

Same would occur with net wealth.  Looking to retire with $1/2 Million savings is beyond some peoples’ dreams; for others it’s hardly a minimum.  Getting a pension or selling a business that adds an extra million would surely increase a person’s choices of where to live, how to travel and enjoy life.  Now $2 or $3 Million would do even more, and help maintain a more active lifestyle through aging years and the occasional dole when family members need help.  Funny thing now; there are people ready to sell a business for $3-to-$5 million who don’t know if it will be enough, or how the money will last. …and with this we find that the human mind may never be satisfied or find comfort in any amount of money.  Bob Marley put it thoughtfully as we see here …

Money is numbers, and numbers never end. If it takes money to be happy, your search for happiness will never end.

Once a certain level of comfort and security is reached, an extra million is a number, and the impact on happiness could be surprisingly small.  For one thing, more money is chilly comfort for people not knowing how to turn wealth into a desired and lasting lifestyle.  Quite a different insight comes in realizing that most people as they age get accustomed to life as it is, habituate themselves to their wealth and circumstances, and describe themselves as happier than most any other time of their lives.

So while it takes money to fuel the ship, YOU GET TO CHOOSE THE LIFE.  That’s my point!  We build the financial plan to assure your personal lifestyle goals and to guide and protect you through the years ahead.  Happiness now rests more on the planning than the actual level of wealth, because we focus our laser attention on securing a true LIFE, filled richly with the experiences and relationships you decide are most important to you.

Ensuring your Plan for Happiness

Did you ever suspect that Happiness is an Inside Job?  This simple line holds great wisdom.  Another expression is, “People are just about as happy as they make up their minds to be.”  Ponder…  This suggests what makes all the difference is not wealth but how we think about our life and wealth, and what we choose to do with it.

We can call this “planning / story-telling.”  I’ve also called it “visioning” or directing the movie of “YOU” for it’s like taking a blank screen and creating the future movie of your life, how you see events and opportunities opening for your future.  Happiness rises as we get to the heart of “YOU” and experiences you feel will be central to your continuing happiness.

To feel rich count blessings you have that money cannot buy.

I ask you – you know we discuss this often –  “What’s most important to you about Life and Money that will help you feel truly satisfied and happy?”   After a pause, you begin to answer, and as we focus it becomes clear how you’d shape your living, your activities, people, experiences, and a healthy of gratitude, to stay happy.  This then lets us clearly plan how wealth will fuel your happiness.  Consider the following and complete or add to these kinds of statements, as they can guide your plan for life and wealth:

  • Places you want to travel include … … …
  • Skills or hobbies you want to develop are … …
  • Helping others:  how would you choose to do this?
  • Keeping active in winter seasons would mean … …
  • What bad events/experiences do you want to avoid?
  • Special family needs that may require your support?
  • Twenty reasons you continue to be grateful …
  • How you avoid (or accept) needing help from others?
  • How to keep feeling vibrant and purposeful …
  • How would you want to be remembered?

This is a conversation we’ve continued to explore and expand with clients over 10, 15, 20 years of working together.  Our clients are like our family;  we have your best interests at heart always.  Over the years ahead we’ll continue to ensure your money is serving your life, opening doors, enriching experiences, preserving the values and personal wishes and goals that are most important to you …doing all to sustain and fuel your lifelong happiness. 

Can you SHARE this letter with friends?

Freely share this letter whenever it can help a neighbour or friend, and ease the concerns of someone you know.  Introduce us — we love to help.

Yours in Financial Security for LIFE!

Certified Retirement Coach

Brian Weatherdon, MA, CFP, CLU, CPCA. 905-637-3500

627 Guelph Line, Burlington, Ont. L7R 3M7.  1-877-937-3500


Author:  A Lifetime Of Wealth — And How Not To Lose It  (2013). Protecting Life, Loved Ones, and Future Dreams  (2013). Your Business, Your Retirement: Halton Retirement Study (2015).

** This monthly letter touches on key strategies in Canadian and global investing and financial planning. This letter is not an offer to sell any kind of security, insurance, or program. Historical returns and risk measures are not a valid guide to future performance. Returns are from publicly available sources and research from a variety of firms including but not limited to GLC, RBC, CIBC, Mackenzie, Franklin Templeton.  Opinions reflected in this letter belong solely to the author and no other body is responsible for the content expressed here. We value opportunity to consult alongside your legal and accounting firms to advance your financial security and unique goals. We are grateful always to receive your comments and questions.

2019-04-16T12:35:51-04:00February 10th, 2017|


  1. Brian W February 15, 2017 at 11:38 am

    Themes we can or may add to this theme include:
    – Happy with high income & less risk: safer in falling markets.
    – Grateful to Give: charity, philanthropy, “planned giving”.
    – Confidence in the value of lasting and holistic guidance.
    – Avoiding nightmares: for wealth, for family estates.
    – Inflation protection, automatically included in our plans.
    – Strength of Life Income Mandates in both good & bad times.
    – Leverage of life insurance to expand the power of your wealth.
    – “Values” (personal) that accompany wealth to next generations.
    – Encouraging “Family Chats” on life, wealth, estate planning.
    – Seeing the whole-picture: to age 95, 105, or beyond!

  2. Brian W April 11, 2017 at 3:19 pm

    Ian McGugan offers brilliant insight in “Wealth and Retirement: the Wider Perspective.” (Globe & Mail, Apr 7/17).

    He opens: “Here’s a radical thought for retirees-to-be: Instead of obsessing over how to squeeze every last drop of return from your investment portfolio, think instead about how to generate the greatest amount of happiness from your accumulated wealth.”

    He refers then to Michael Finke’s work as dean of the American College of Financial Services in Bryn Mawr, PA. “Yes money matters, but not as much as you may think.” Possibly the best investment while approaching retirement could be “marriage counseling.”

    I need to spend more time with Finke’s Health and Retirement Study. Expanding each year, now over 20,000 participants, there are many gems and insights on what truly creates or sustains happiness. Including this nugget: “a solid marriage can be just as valuable as a big portfolio.”

    My book, “Your Business, Your Retirement — Halton Retirement Study” echoes the similar theme that as people retire they lose a vibrant social network and source of socialization …so Finke’s research attests that a strong experience of marriage and family adds resilience for life’s enjoyment and overall health.

    These are personal ideas – for sure – yet well worth discussing how each person can upsize and optimize their plan for happiness in the years ahead.

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