Recently during a meeting, a client said, “I want to trade this (his portfolio) for experiences!” His statement reminded me of the book Happy Money: The Science of Happier Spending, which was published in 2013 and authored by Elizabeth Dunn and Michael Norton.
The book has several main views, including:
- Buy experiences – material items give us less happiness than things like trips, concerts and special meals.
- Buy time – having others work on tasks we dislike can give us more time to do things we enjoy.
- Invest in others – research shows that spending money on others gives us more happiness than spending money on ourselves.
Based on our many years of guiding clients through pre-retirement and retirement, we have learned these principles are true. The memories and stories that our clients bring back from their trips and experiences help make our work noble.
Another client has made it a priority to take each grandchild on a trip during his or her senior year in high school, with the grandchild selecting the location. The most recent trip was to Paris. The memories from these trips will last a lifetime.
One question we have been using to help identify “happy money” opportunities for our clients is, “What goals do you have that will require planning, money and time to accomplish?” These goals should hopefully represent experiences and investing in others … the true happiness that can come from money. If this interests you, then we suggest reading the book and ask that it be added to the agenda for your next meeting with your Wealth Manager.
Note: Elizabeth Dunn is an associate professor of psychology at the University of British Columbia and Michael Norton is an associate professor of marketing at Harvard Business School.