James Montier’s piece from the other day got me back to reviewing some of his past work and these comments on happiness really jumped out at me.  Investors are a funny lot.  They’re in the constant pursuit of profit, but few actually know what money is.  And in most cases money is mistaken as the end and not just the means to an end.  That end of course if some form of happiness.  Granted, happiness is different things to different people, but we seek profits for the same reason – this means helps us achieve some end that satisfies a personal desire generally resulting in happiness.  And it’s easy to mistake money for the end in this pursuit.  But of course, the two are not the same thing.  Money is not wealth.  Money is not happiness.   Anyhow, I’ll get off my soapbox and let Montier take it from here:

“Don’t equate happiness with money. Materialistic pursuits are not a path to sustainable happiness.

The industry I work in is very money-oriented. People measure success or failure in terms of monetary gain. Yet when I discussed with my wife, friends, and colleagues what people define as happiness, money rarely came up. Beyond a certain level of wealth, it seemed to make little difference.

People in this business work insane hours for ludicrous amounts of money, but they don’t have time to enjoy it. I didn’t understand it. We equate wealth with happiness. But the more people I spoke with, the weaker that relationship seemed to be.

We have evolved to value relative happiness over absolute happiness. But just because we developed that sense of relative standing in caveman times, is that really today’s ultimate goal? If I am content with what I have, why do I need to look over the fence at my neighbor’s car?

…If you are after specific investment advice, stop reading now. We seek to explore one of Adam Smith’s obsessions: what it means to be happy. We also discuss why that’s important to investors, and how we can seek to improve our own levels of happiness. The list below shows our top ten suggestions for improving happiness.

  • Don’t equate happiness with money. People adapt to income shifts relatively quickly, the long lasting benefits are essentially zero.
  • Exercise regularly. Taking regular exercise generates further energy, and stimulates the mind and the body.
  • Have sex (preferably with someone you love). Sex is consistently rated as amongst the highest generators of happiness. So what are you waiting for?
  • Devote time and effort to close relationships. Close relationships require work and effort, but pay vast rewards in terms of happiness.
  • Pause for reflection, meditate on the good things in life. Simple reflection on the good aspects of life helps prevent hedonic adaptation.
  • Seek work that engages your skills, look to enjoy your job. It makes sense to do something you enjoy. This in turn is likely to allow you to flourish at your job, creating a pleasant feedback loop.
  • Give your body the sleep it needs.
  • Don’t pursue happiness for its own sake, enjoy the moment. Faulty perceptions of what makes you happy, may lead to the wrong pursuits. Additionally, activities may become a means to an end, rather than something to be enjoyed, defeating the purpose in the first place.
  • Take control of your life, set yourself achievable goals.
  • Remember to follow all the rules.”

Got a comment or question about this post? Feel free to use the Ask Cullen section, leave a comment in the forum or send me a message on Twitter.

Cullen Roche

Mr. Roche is the Founder of Orcam Financial Group, LLC. Orcam is a financial services firm offering research, private advisory, institutional consulting and educational services.

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  • Kobayachi

    Some true wisdom here.
    To get back at what „money“ represents, I always think about it as time. So when you spend money in vacations or a fancy TV, what you really do is spending all the time you invested working hard to earn that money.
    I though the In Time movie was brilliant in delivering that message.

  • Stoic

    As long as there is desire, there cannot be happiness.

  • Jay

    Unfortunately, you can’t have sex without gobs of money.

  • Nils

    “Beyond a certain level of wealth, it seemed to make little difference.”

    Of course you first have to reach that “certain level of wealth”, and that is the problem I’m primarily concerned with. It is incredibly hard for people without family money to attain. One could argue that maybe the pursuit of money makes unhappy, especially when you fail.

  • In Accounting

    Yup – I’m continually amazed by the attitude of people I come across that were born on third base and think they hit a home run.

  • Rob T

    Well said

  • VII


    Thanks for sending that link to Marks sight. Sorry about the other day..I can get in a tizzy about the markets when I’m stretched with everything that comes at me in life. My apologies to you and anyone else I lectured on why the market should do X Y or Z. I hope you have a good year wether it be investing or the stuff this post is about.


  • Rob T

    I think most on this site would agree with that sentiment… what’s worse is the number who conflate their good fortune with brilliance.

  • Nils

    Telling a man he “should just have more sex” is like telling a man he should just have more money.

  • GF

    what happened to boatman?

  • Nils

    His boat sunk?

  • VII

    lluvatar- Good Question- I don’t know?

    I write the check to the them and they pay it out. I’s not complicated..except I’m trying to protect the relationship.(meaning…I’m not the only one who writes a check to them)

    Can I share with you something. In almost everything I’ve been getting it is positive for the SPX going out 3-12 months. I don’t know how? I mean I can share with you 500 reasons why it shouldn’t. And I don’t sugget anyone follow me. It is the most unlikely scenerio but…I’m about 60% long today with 20% cash. Even they can’t figure out why the numbers are changing on them but sentiment, etc. are as bad as they’ve seen. VIX, Europe, Asia etc. The only thing I can think of is we are all now seeing the same information to be cautious and the ever changing dynamics of markets are adapting to something New. We can’t all know for certain the SPX should decline. But since I’m not smart enough to figure this out…. I’ll do what I’m told. Like Peyton Manning said about his tough choice to go to SF or Denver..”I just wanted someone to tell me what to do”. Well they did and I’m listening.

    That site you sent is really good…Thanks Again! It will pay dividends in my life and health. Who would have thought your link would help change my path.

  • ES

    It is lack of security that makes people unhappy. Once you have enough money to guarantee you food and shelter and medical care for the rest of your life, money becomes rather unimportant unless you are one o f the money = power types. The first need is survival , only then you can start thinking about higher goals like happiness.
    Americans would’ve been much happier as people with a national healthcare system because food and shelter needs are pretty much already taken care of. The reason prudent people run out of money is usually some sort of a serious illness at the end of life. I know I worry about it.

  • Nils

    Well money also buys you security in as much as you can lose or quit your job without giving up your lifestyle. It buys you freedom.

    Also I wonder if it’s only prudent people who worry about health as a risk factor. I’d guess if you hand most people 50k, most people will buy a car or a house rather than quality health insurance.

    I remember when I was really poor I didn’t care about money at all, because I had none. Now I’m a lot more concerned with losing what I already have.

  • Gerald P

    But it seems some with huge amounts of money strive for more, as if it is a contest to see who wins. Having more money appears to make some people feel justified in assuming socially superior status. Remember New York’s 400 hundred?

  • Sergio

    Funny I see the same thing as you but I’m geting creamed. The different time frame charts are saying different things…1,3,5,10 year charts. My bottom line is I think we will end up like Japan and we are in store for one more fleecing. When its going to start and when it will finish is only known by the market makers. Good luck to us all. I wish you health and happiness….. they may be one in the same. The future is unwritten….enjoy what you have and what ever it is that your doing.

  • Wise Guy

    I’m happy with any money I make in an investment. It doesn’t matter how much I make or how little I make: I’m happy if I just make anything.

  • Larry

    I am slowly coming to the conclusion that frequent trading is making me less happy than I would like to be. If I can successfully overcome my trading addiction, then I would like to move to a new investing style. My name for this is Monthly Asset Allocation (MAA). I would limit myself to trading on only one day each month. I would try to be content with what I have for the remaining 30 days, then, after plenty of time to reflect on it, re-allocate the following month. Of course, there could be stop losses, and “good til canceled” buy orders that might trigger during the course of the month. I think this will make me happier. – What do others think? Can you be a daily or weekly trader and still be content and happy?

  • Larry

    In the latest Alan Abelson column in the recent Barron’s, Barry Ritholtz of the Fusion IQ market timing system described himself as: “miserably long”. I thought it was a very telling quote. If a lot of people are paying you big bucks to time the market for them, then you can’t help but be miserable, because no human can time the market right even close to 100% of the time. Trying the impossible will make you miserable.

  • jimbo

    After reading all these silly comments i can only guess that all you commenters are young people.
    Its funny Ive never commented on anything in my life like this and I probably will never comment again, but i cant help myself.
    I was sent this link by my son in law who knows me very well, after reading it it really does help a guy like me take the time to reflect.
    I am a 50 year old man, with 3 grown kids, all successful.
    I live on a 8 acre estate in the Princeton, NJ area.
    I have owned my own business for 30 years and Ive done pretty well for myself.
    I own a house on a private island in maine in which I need my own boat to access.
    Very peaceful as you might imagine.
    I own a apartment in manhattan.
    I own many commercial realestate propertys
    I work my own hours, I havnt set my alarm clock to get up in 10 years, nor have I ever lived with a budjet.
    I do what the hell I feel like doing! and when I feel like doing it.
    but……why do I come over every night pissed off?
    why do I think about selling my house in maine and getting something else?
    why do I think about selling my boat and getting a bigger one?
    why do I want to sell my farm and move into a smaller house?
    Who the hell knows why.
    But I will tell you one thing…reading a segment like this helps a guy like me try and figure it out!
    Probably when tomorrow gets here I will forget the article and go back to my same life…. “kicking the dog when I get home” but for a moment it really made me sit back and think.
    simple……is sometimes better? who knows?