Reflections on a Happy Thanksgiving

What makes you happy?  As we wish you and yours a Happy Thanksgiving, we’d like to take a moment to reflect on this timeless question.

You probably already realize that piles of possessions by themselves aren’t enough. But it may be less clear what does generate enduring happiness and how we, as your trusted advisor, might be one of your core alliances for discovering it.

First, let’s define what we’re talking about. We are fond of this description by “The Happiness Advantage” author, popular TED Talk presenter, and Harvard researcher Shawn Achor:

“Happiness … isn’t just about feeling good,
it’s about the joy we feel while striving after our potential.”

Such a simple statement, but it’s packed with profound insights.  To take this even further, I believe that we get closer to our potential when we focus more on others rather than our own well being.  That is, being generous towards others plays a big part in achieving sustained contentment and joy.  It is quite the paradox (that we get the most when we give the most), but it has been believed through the ages and proven more recently in the research.

Happiness isn’t about indulging in fleeting pleasures.

In fact, it’s closer to the opposite of that. If you can only be happy once you’ve “scored,” you are limiting your joy to isolated incidents instead of weaving it into the fabric of your life.

You can still be happy, even when life isn’t all puppies and rainbows.

Distinguishing enduring happiness from occasional pleasures frees us to enjoy even our most challenging experiences, and to savor them as among our fondest memories. It’s why we may willingly burn the midnight oil on a project of deep interest. Pay a personal trainer to push us harder than we’ve ever gone before. Volunteer our hearts and minds to others in need. Give birth.

Everyone has different sources of happiness, but the joy it can spread is universal.

In a world that sometimes seems increasingly polarized, a greater appreciation for happiness might just bring us closer together. As Achor comments: “Joy makes us want to invest more deeply in the people around us. … It makes us want to learn more about our communities. It makes us want to be able to find ways of being able to make this a better external world for all of us.”

By coming together to focus on what sustains us – an optimistic outlook, value-driven action, meaningful relationships – therein we can find greater happiness. That’s what the evidence suggests, anyway.

Again, we wish you a most Happy Thanksgiving!

Why Do We Behave Badly When it Comes to Money?

You are standing on the edge of a cliff and the only thing that separates you from a 1000 foot fall are the rocks you are standing on and a small branch sticking out of rocks, hanging perilously over the abyss.  However, you have been told that if you could just get out to the end of that branch, the view becomes amazing and it would change your life.  At your core, you know a ‘view’ can’t change your life.  But what if they are right?  What should do?  There is not a mentally sound person alive that would not agree that the right thing to do would be to back away from the cliff’s edge.  We are a species that values survival, so this makes sense.  But when it comes to money and money decisions, we do this over and over and over again.

I am not referring to just investment decisions, although these are well documented.  Karl Richards wrote a fantastic book called The Behavior Gap where he discusses, among other things, how it is that the average mutual fund performance is between 2-4% per year higher than the average performance of the investors…in that same fund.  In short, it is investors behaving badly by buying high and selling low.  I will guarantee that every one of those investors got in the game with the goal of buying low and selling high, so why did the majority of them do just the opposite?  This is the behavior gap, and Karl will explain it much better than I will, so read his book.

I am also referring to our decisions around other areas of finance such as cash flow, debt and generosity.  I think most people know what they should be doing with these areas of finance, but very few actually execute this well.

Cash flow is pretty straight forward.  The #1 principal when it comes to money is ‘Spend less than you make.’  Absolutely no other part of your finances will work as well as they should if you do not have this under control.  You cannot plan and save for the future if you are not staying solvent today.  Heck, you won’t be able to plan for tomorrow.  This is critical and is a lesson I have had to learn the hard way.

Debt flows right out of cash flow.  Show me a person that is spending more than they make, eventually, we will be discussing their debt problem.  The problem with debt is that you are writing checks off of your future with no assurances that the money will be there to pay for it.  It may work out ok for you, but then again, it may not, and do you really want to live with that uncertainty?  Make no mistake, there are better and worse uses of debt, but the principal of debt is to be careful.  The old Proverb states that, “The debtor becomes slave to the lender.”  If you have ever been in an extreme amount of debt, you understand what it means to be indentured to that debt.

Generosity is something we should all practice on a daily basis to as many people that intersect our life.  This is life at its fullest.  Of course there are many more ways to be generous and kind to someone other than using your money.  However, there is also no question that the thoughtful and strategic engagement of money with need can changes lives and impact people for generations to come.  I think we are all wired to want to help.  It is an incredible feeling to know that your efforts, thoughtfulness, and yes, money, have made an impact on someone.  It will change their day, but I am certain it will change your day.  But you can’t even get here if you have misbehaved so badly in other areas of your financial life.  We all know this at our core, and yet we knowingly sabotage our desire to

I don’t think anyone does this on purpose, but this is what happens when the behavior gap is compounded exponentially.  It is never just about what we did to miss out on returns this year or what bad decision we made today to live beyond our means.  These decisions are never made in a vacuum and they always compound into a much bigger problem if a course correction is not made.