Wealth and Happiness are not Mutually Exclusive

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If I were a rich man,
Ya ha deedle deedle, bubba bubba deedle deedle dum.
All day long I’d biddy biddy bum.
If I were a wealthy man.
I wouldn’t have to work hard.
Ya ha deedle deedle, bubba bubba deedle deedle dum.
If I were a biddy biddy rich,
Yidle-diddle-didle-didle man.

When I first watched Fiddler on the Roof in the early 1970s, it bored me to tears. A musical and a sports-loving teenage boy without a musical bone in his body were far from compatible.

Recently, I watched the movie again. Marvelous how 40 years can give you perspective and greater appreciation.

Tevye, the main character, is a poor dairyman in 20th century Russia. He laments being poor.

If he were a wealthy man, he believes, he wouldn’t have to work hard. Another verse from the song:

I’d build a big tall house with rooms by the dozen,
Right in the middle of the town.
A fine tin roof with real wooden floors below.
There would be one long staircase just going up,
And one even longer coming down,
And one more leading nowhere, just for show.

Tevye’s dreams are the same as those who fantasise over winning lotto. Bigger house. No more work. A life of leisure.

Like teenage boys and musicals, dreams and reality are not always compatible.

My involvement with the Bonner Family Office has afforded me the opportunity to make the acquaintance of Dr Joanne Stern PhD. Joanne is a psychologist based in Aspen, Colorado, and the author of Parenting Is a Contact Sport: 8 Ways to Stay Connected to Your Kids for Life.

Aspen and its surrounds are home to some of the wealthiest people in America. The town is proof ‘money does not buy happiness’. Joanne told me the divorce, suicide and drug dependency rates in Aspen are all well above the national average.

Joanne has shared with me a number of stories about the wealthy families she has counseled over the years. Jealousy, lack of affection, parental remoteness, greed, resentment, idleness, infidelity, manipulative in-laws…these are some of the issues that provide Joanne with a steady stream of clients.

Our focus at Port Phillip Publishing is to help you to create and retain wealth. Making smarter investment choices… Providing a different perspective on the global economy… Designing strategies that best suit your risk profile and stage in life…

However, we must remember that having money is only part of the well-being equation. Emotional stability is equally important. A rich life is measured in much broader terms than your bank balance.

Numerous research papers looking at the connection between money and happiness conclude that more money does not equal greater happiness.

There is no question money does afford a higher standard of living — better schools, a safer neighbourhood, access to better health care… This is why the middle class tends to rank higher on the happiness scale compared to those living in poverty.

However, there is not a quantum leap in happiness between those in the middle class and the wealthy. In fact, in some studies, a percentage of the wealthy are downright miserable…worse than those in poverty.

The worries that come with money — who is after my wealth? Are these people really my friends? What do they want? Can I trust them? What happens if I lose my wealth? Is that in-law a gold digger? — can be exhausting and lead to paranoia.

As the old saying goes, ‘If you are going to be unhappy, then you might as well be rich and unhappy.’

However, our aim is to provide you with the skill set to assist you in having ‘your cake and eat it too’ — wealth and happiness.

Another timeworn saying is, ‘It’s about the journey, not the destination’.

Taking stock of what you have and not lamenting what you don’t have is critical to achieving inner peace and happiness. If you covet what other people have, you’ll live a life of filled with jealousy and misery. Unless you’re Bill Gates, somebody will always have more money than you.

Things that are important to my emotional wellbeing are:

  1. Family – all the money in the world cannot buy love and respect. Losing the love and respect of my wife, three daughters and my closest family members would, to me, be a fate far worse than losing money.

  2. Health – money could not buy Kerry Packer or King Hussein good health. Appreciating the ability to rise and shine each morning is a blessing I never take for granted. Treasure your health because without it your wealth is very much a secondary consideration.

  3. Employment – being engaged in an exciting and fulfilling enterprise creates a sense of wellbeing and self worth. Do something with passion and you’ll never work a day in your life. You may not love your work, but at least be thankful for employement and be the best you can be at what you do.

  4. Friends good friends are worth more than their weight in gold. True friendships should be cherished and nurtured. If all else fails, true friends will always be there for you. Recently, I received a heartfelt thank you card from a very good friend. It made my day and sits proudly on my desk.

  5. Australia we are indeed a lucky country. First world health. Freedom of speech. Tolerance. Clean fresh water. Great food. Excellent wines. Fantastic weather. Reasonably sound economy. Peace. Mineral wealth. Agriculture. Often times we lose perspective and whinge and moan about certain issues, but in reality, we have a whole lot to be thankful for in this country.

There is a lot of richness in our lives if we take time to stand back and apply a little perspective. Constantly reminding ourselves to be grateful for what we have is a constructive way to stay grounded for when the monetary rewards flow our way.

Here’re some simple tips to assist in building the wealth to go along with the happiness:

  1. Financial plan identify your short, medium and long term financial goals. Clearly defined, regularly reviewed goals with realistic savings projections are far more likely to be achieved. The success rate of implementing a plan with believable and achievable goals is guaranteed to be higher than simply wishing ‘to be a rich man’.

  2. Budget live within your means. Don’t try to impress people you don’t know with things you don’t need purchased with money you don’t have. In the coming years, the greatest credit bubble in history is going to bust. An entire generation accustomed to borrowing from the future to live a life of excess today is going to encounter a very unpleasant reality check. Act today to bring your household expenditure into line with what you earn and avoid the painful lesson that awaits so many of your peers.

  3. Avoid debt where possible, you should avoid debt, especially for consumption purposes. Debt is simply an advance on tomorrow’s income. Historically low interest rates make larger amounts of debt affordable. This is the game plan the authorities want you to follow…borrow more to keep the debt-dependent economic model in motion. Don’t fall for the trap. With the end of the debt super-cycle in sight, being prudent has never been more important.

  4. Think a lot and act a little all the very successful people I know do copious amounts of research (on purchases related to property, motor vehicles, shares, etc.) before they act. There’s a line between doing too much research, leading to ‘analysis paralysis’ and not doing enough, which results in ‘acting in haste and repenting in leisure’. Do sufficient research to be comfortable with the decision you make and always build in a contingency plan. One question to ask yourself is ‘am I following the crowd or am I thinking independently?’ If you are following the latest trend, chances are it’ll turn out to be a bad decision.

  5. On balance make good financial decisions it’s impossible to make every investment decision a winner. The trick is to minimise the losses. This is where ‘think a lot and act a little’ comes into play. Do your research. Listen to your inner voice. And remember if it sounds too good to be true, it usually is. Sometimes the best investments you make are the ones you forego.

Port Phillip Publishing is here to assist you in your journey to an all around rich life — a life rich in knowledge, personal wellbeing, shared experiences, sound investments, and enjoyment.

Be thankful for what you have. Commit to building on your current base of knowledge and wealth. And enjoy each day for the experiences, lessons and beauty it has to offer.

Do this, and you will truly be a ‘rich man’.

Vern Gowdie
For The Daily Reckoning Australia

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Vern Gowdie

Vern Gowdie

Vern Gowdie has been involved in financial planning in Australia since 1986. In 1999, Personal Investor magazine ranked Vern as one of Australia’s Top 50 financial planners. His previous firm, Gowdie Financial Planning, was recognized in 2004, 2005, 2006 & 2007, by Independent Financial Adviser magazine as one of the top 5 financial planning firms in Australia. He is a feature contributing editor to The Daily Reckoning and is Founder and Chairman of the Gowdie Family Wealth advisory service and editor of the Gowdie Letter To follow Vern's financial world view more closely you can you can subscribe to The Daily Reckoning for free here.

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slewie the pi-rat
slewie the pi-rat
1 year 11 months ago
when i was a boy, my mom would always tell me i was a terrible liar. so, i really had to keep trying! i’ve known many “well-adjusted” and seemingly happy rich people. even psychologists are currently fighting their new “image” as torture-enablers for the State of Lawlessness. but, if the shoe fits… people lie, cheat, and steal all the time. almost invariably about ONLY 3 things: ~sex, ~drugs, and ~money. these Big Three also change for a person as s/he moves through life’s “stages”. imo, true psychology is about change in BEing. this is the “trap” [in the New Testament… Read more »
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