The Complexity of Human Happiness

Lewis Walker |

The privations engendered by Covid-19 have triggered renewed interest in the search for happiness. The reggae philosopher Bob Marley touched on the link between money and happiness, declaring, “Money is numbers and numbers never end. If it takes money to be happy, your search for happiness will never end.”

“The search” has been going on for thousands of years. Over 2000 Bible versus deal with money and the use of it, much of it resting on what Aristotle termed eudemonic happiness stemming from “self-realization,” a worthy and moral life lived in service to others and the community. In framing what she termed Buddhist economics, Dr. Clair Brown, Professor of Economics and Director of the Center for Work, Technology, and Society at the University of California, Berkeley, in a 2017 post on, quoted the Dalai Lama as warning against the assumption that “material gain can by itself provide us with all the satisfaction we require.” Said he, “Genuine happiness is characterized by inner peace and arises in context of our relationship with others.”

Contemporary psychologists have found that people in general care about fairness and compassion, being helpful. Per Professor Brown, “Kindness makes you happier, and happier people engage in more acts of kindness.” As financial advisors we see an increased focus across the board, but notably in retirement, on charitable giving, service, and stewardship. A 6/23/2020, study published by The Society for Affective Science, “Happiness, Meaning, and Psychological Richness,” found that “hedonic well-being” encompasses “pleasantness, comfort, safety, and stability.” Those who “say they have a happy life tend to have [both] material and relational wealth.” Digging deeper, happiness links to a meaningful life, purpose, meaning, devotion, service, and sacrifice. For many who are post-career and in retirement the latter five themes take on more significance. As some saw during the pandemic, boredom quickly erodes happiness and physical and mental fitness.

The study added a third dimension, a psychologically rich life, “best characterized by variety, novelty, and diverse, complex, and varied experiences of the sort that change people’s view of the world and their place in it.” That may explain why many retirees pursue additional education, travel, missionary, and community service work. However, psychological richness “may involve negative aspects, including potential risk or danger.” Advisors may wish to consider various forms of insurance, adequate financial reserves, and other risk mitigation strategies for the adventurous.

Happiness relates to sociologist Abraham Maslow’s famous Hierarchy of Needs. At the two base levels of his pyramidal illustration, humans first must satisfy basic and safety needs─food, water, warmth, rest and security─before they progress further. The next two levels encompass psychological needs such as belonging, love, intimacy, friendship, followed by self-esteem needs, prestige, accomplishment. At the top of Maslow’s pyramid is self-actualization, achieving one’s full potential, creative activities.

Recognizing the role of money, investment, and goal-setting at all levels in contemporary society, Frank Murtha, Ph.D., a behavioral finance expert, author,  speaker, and co-founder of MarketPsych, redesigned Maslow’s pyramid as “The Investor Hierarchy of Needs,” offering a series of considerations and questions. The first level has to do with “trust.” Can you trust those giving you advice to act in your best interest? An advisor should ask probing questions to “get your story,” how you got to where you are, where you are now, and where you want to go in the future, before even beginning to offer advice about your money and security. Level 2 deals with self-approval. “What do you want your money and investing to accomplish and why is that important to you?”

Level 3 encompasses safety and risk management. “What part of a given investment process or strategy makes you uncomfortable, and if so, what should be done to change that? What keeps you up at night?” As to happiness, level 4, “Is your investing supporting the life you envisioned for yourself?” (And/or loved ones?)  “While investing for the future, are you having fun today?”

The top of Murtha’s pyramid embraces purpose. “What do you want to be remembered for? In what ways do you want your money to make the world a better place?”

No one is happy all of the time. Periodically you will encounter sadness, disappointments, challenging life transitions. To minimize financial strains, accumulate cash reserves, a “What if?” fund, a Freedom Fund, framed within a comprehensive and dynamic financial plan, periodically reviewed to meet changing circumstances. Develop a disciplined investment strategy designed to fund short and long-term goals. Create legal and insurance frameworks as peace-of-mind protections.

Stressful situations will test you, but if you’re secure and confident “in your own skin,” you will find happiness in your ability to overcome. Some of the greatest successes in life come out of loss, setbacks, and tragedy. As Babe Ruth said, “Every strike brings me closer to the next home run.”