Of course money is important. But life is about so much more.
As a geek, there was a time when all I thought about was numbers. And in particular, numbers connected with investment and with pensions, because that was my job, and I loved it. But life is about more than numbers, and about more than money.
Certainly my happiness research brought that home to me.
What I discovered is that money does have a positive influence on happiness. Of course, that’s hardly a surprise. But it’s not as simple as: more money means more happiness, and lots more money means lots more happiness. It’s much more subtle than that.
If there’s very little money, and it’s all focused just on surviving and making ends meet, then yes, more money means more happiness. But once there’s enough money to survive, and the focus changes from surviving to thriving, then typically it takes a lot more money to increase happiness noticeably. And when you have a huge amount of money, having even more money matters very little.
Why is this? It’s because, once survival is assured, we tend to look around at people we admire (or even envy), and see what they have; and our target is no longer something absolute (like survival), but something relative, something that we compare with what others have. That’s why, no matter how much we may have, a relative comparison with others may not enhance our happiness.
But there’s something else that hit me between the eyes, because it’s so well expressed and I encountered it accidentally.
I was speaking at a conference, and came across another session that looked interesting. It was about financial professionals having successful meetings with clients. And a man named Ed Jacobson laid out a notion that he called the “life abundance portfolio”.
I hope he expands it into a book. It’s a reminder that life is about so much more than money. He reminds us that we have all kinds of interactions and experiences in life. I can’t remember the labels he used, but here are the words I use to remember his concept. He said there are seven aspects of life to consider. I remember them in pairs:
- family and friends;
- work and play;
- physical health and mental (including spiritual) health;
- and, oh yes, finances.
I think of them as the seven asset classes in the portfolio of life’s abundance. And when we’re considering life’s abundance in the way Ed Jacobson suggests, it’s clear that money is only one aspect.
I commend Ed’s notion to you. I’ve even suggested to financial professionals (expanding a role that Ed launched) that they use it, right from the start, to establish with their clients that the professional part of what they do is only one aspect of your fulfilled life. So, before they review your financial portfolio, they should review with you your life’s abundance portfolio. I add (as Ed did) a practical angle: they need to establish this broader context when the financial side is going well. Otherwise there’s a big (and legitimate) danger that you’ll view it as a cynical distraction, a way to conceal bad financial news.
All of this allows us to remember how lucky we are in the rest of our life abundance portfolio. Thank you, Ed Jacobson.
Let me be explicit about the destination of this stage of the tour of life after full-time work: there’s more to life and happiness than money.
I have written about retirement planning before and some of that material also relates to topics or issues that are being discussed here. Where relevant I draw on material from three sources: The Retirement Plan Solution (co-authored with Bob Collie and Matt Smith, published by John Wiley & Sons, Inc., 2009), my foreword to Someday Rich (by Timothy Noonan and Matt Smith, also published by Wiley, 2012), and my occasional column The Art of Investment in the FT Money supplement of The Financial Times, published in the UK. I am grateful to the other authors and to The Financial Times for permission to use the material here.