How to be happy: Part 4

How to be happy: Part 4

Greetings from frigid Omaha.  One upside to this comically cold weather is that I’ve had a little more time than usual to just sit by the fire and catch up on my reading.  As I worked through my “articles to read” pile, the results of a recent study caught my eye and I thought it would make a worthy edition to our How To Be Happy series.

When money buys happiness

You’ve heard me say before that when spending your money, you should focus on experiences instead of stuff.  The idea being that a life spent in dogged pursuit of rich experiences will usually have a much better payoff than one seeking the latest gadget or gizmo.

Of course, it’s easy to dismiss that as just one person’s opinion.  After all, some people would prefer a trip to Hawaii or a day at the ballpark, while others prefer a flat screen television or a Louis Vuitton handbag.  Now there’s actually research that shows that you should probably choose the trip over the handbag.

The study, conducted by Ryan Howell, assistant professor of psychology at San Francisco State University, shows that buying experiences instead of possessions leads to greater happiness.  Why?  According to Howell, experiential purchases satisfy higher order needs by making us feel alive and connected to others.  “Purchases that increase psychological need satisfaction will produce the greatest well-being,” says Howell.

Not only that, but buying experiences tends to provide more lasting satisfaction (regardless of your income or the amount spent) because they provide what Howell describes as “memory capital.”  In other words, experiences come with memories and those memories accumulate and contribute to your happiness for as long as you’re alive.

Just to be clear, I have nothing against stuff.  I like nice things just as much as the next guy, but I think our society has the ratio wrong.  There’s so much pressure to buy things that people are often tapped out when it comes to buying experiences (if only I had a dollar for every time someone told me “I wish I could afford to travel” right before climbing into their $40,000 SUV).

So as you think about your budget this year, keep Howell’s spending study in mind.  Stuff is fine, but experiences will probably make you happier.

~ Joe

Most popular posts of 2013 plus retirement rules that work

Most popular posts of 2013 plus retirement rules that work

Most Popular Posts of 2013

Happy New Year!  I hope your year is off to a great start.  I’ve been on the road (a little R&R in Colorado with friends and family), so my apologies for a less than prolific few weeks at Intentional Retirement.

I just have two quick things I wanted to run by you today.  First, in case you’ve only recently joined us or you missed a post or two, I thought I’d list off the Top 10 most popular posts on the site for 2013.  Not that the herd is always right, but there’s some good stuff here so I hope you’ll check it out.

Retirement Rules

Second, I’d like you to help me write a book.  Here’s the idea.

I recently read a book by bestselling author Michael Pollan called “Food Rules: An Eater’s Manual.”  In it he argues that eating has gotten overly complicated.  Basically, there are too many diet books, food pyramids, health claims, so-called experts and weird ingredients that you can’t pronounce.  He attempts to cut through the clutter and lay out some simple rules (some of which were submitted by readers or date back to advice that grandma gave), that are easy to understand and follow for the majority of people.

As I read the book, I couldn’t help but see parallels with the financial planning industry.  It too has gotten extremely complex with endless products, research, regulation, advice, articles, experts, contradictory claims, credentials, DIY options and fee structures.  All of that exists to help people prepare and yet 57% of the population reports having less than $25,000 saved for retirement.  Obviously, the complexity does not seem to be helping.  We need a Vince Lombardi “This is a football” type moment to get us back to the basics.

So today, I’m inviting all of you to offer up your best retirement planning advice.  Maybe it is something that your parents or grandparents taught you.  Maybe it’s something that has worked particularly well in your situation.  Maybe it’s something that you learned the hard way and you want to help others avoid the same mistake.  Whatever it is, either email me or scroll down to the comments section and type it in.  It doesn’t need to be long.  A few sentences or a short paragraph would be ideal.

Once I have enough entries, I’ll compile them all, choose the most helpful, combine duplicates, edit them for clarity, write some of my own and then lay them out into an ebook which I’ll make available for free in a future article.  If you’d like your idea attributed to you in the book, be sure to include your name with your comment.  Sound good?

Your turn

I’ll list some potential topics below.  Feel free write about one of those or start a new one.  My only request is that you keep it simple and try to focus on rules that will work for the vast majority of people.

  • Should you have an adviser or go it alone?
  • Rules for saving
  • Rules for investing
  • Finding purpose and fulfillment
  • What percentage should you save?
  • Asset allocation rules of thumb
  • Withdrawal strategies
  • Habits of effective retirees
  • Importance of discipline in staying on track and saving enough
  • Social Security
  • Medicare
  • Pensions
  • The importance of friends
  • Estate planning
  • Caring for aging parents
  • Debt
  • Spending and budgeting
  • Insurance and Annuities

Thanks for the help!

~ Joe

Photo by Sacha Fernandez.  Used under Creative Commons License.