Can money buy happiness?
That’s an age-old question, and one that I think that everyone asks themselves at some point. Most people wonder if all of their hard work will pay off and give them the financial freedom and happiness they seek.
In short, the answer is yes—and it can be purchased for a lot less than you might think.
According to the research I did for my new book, “You Can Retire Sooner Than You Think,” there are several financial bare minimums that need to be reached in order to be happy in America. To determine your own financial bare minimum for happiness, you must first assess your own situation. Ask yourself the following questions:
- How many years do I have left before retirement?
- What is my current level of savings?
- What percentage of my income can I save each year?
- What type of investor am I?
Once you identify what your own financial situation looks like, you can create a road map that will quickly take you to where you want to be financially.
The happiest retirees generally start by setting a goal for their retirement funds. Have you determined what you want and for what you will need your retirement money? Determine what you consider to be your core pursuits, which I like to describe as “hobbies on steroids,” and use those to guide your retirement planning. When you know the recipe for the secret sauce that makes you happy in your daily life, you can plan your finances, investments, and most importantly, time, around achieving happiness.
As you work to achieve your financial goals, keep in mind that happiness is a work in progress. Finding the right balance in each area of your life—work, family, friends, hobbies, and other interests—is key to achieving the lifestyle you want.
Maintain a work/life balance. All work and no play is not a good recipe for happiness. There are going to be years in your career that you feel like you need to go 100 mph, but this should not be every year. Stay focused on what you’re hoping to achieve by working—financial stability, for example—but don’t stress out or work too much. The more you work and stress about work, the less time you can spend with family and friends.
Conversely, not working hard at all will have a negative impact on your own self-esteem and financial flexibility.
Enjoy your hobbies. Sports and other hobbies are important outlets, but it’s important to know that your performance is going to shift from week to week. Instead of beating yourself up when you don’t have a great game or workout, enjoy yourself and the process of perpetual improvement.
Let’s take golf as an example. Do you golf every week to get better or worse? Are you annoyed when you shoot four strokes more than the week before, or do you tell yourself that next time you’ll shoot eight strokes fewer? There’s a middle ground where you’re striving for your best each week while getting the enjoyment of just playing the game.
Travel, but don’t go overboard. Travel and the experiences that come with it are keys to happiness, but moderation is important. An old friend of mine came into a big chunk of money early in his life and decided to spend it traveling—for years. Now he is in his mid-40s and though he has traveled all over the world, he’s never held a job, owned a home, or married, and he typically crashes on a friend’s couch when he’s in town. While it sounds like an exciting lifestyle, being a professional traveler requires some sacrifices that may come back to bite you later in life.
No matter what you do, try to fight the urge to take things to extremes. I’m all for exercise and eating healthy, but every now and then it’s OK to indulge in a hot fudge sundae or blow off that three-mile run.
Expand your horizons and make progress day by day. Find balance in all aspects of your life: your finances, relationships, hobbies, travel, and so on. The happiest retirees always do.
For more information about my new book, check out this video.
Wes Moss is the host of the Money Matters radio show on WSB Radio, host of the TV show Atlanta Tech Edge on Atlanta’s NBC affiliate, and Chief Investment Strategist at Capital Investment Advisors. In 2014, he was named one of America’s top 1,200 financial advisors by Barron’s Magazine. He is the author of several books including his most recent book, “You Can Retire Sooner Than You Think–The 5 Money Secrets Of The Happiest Retirees,” which is one of Amazon’s best-selling retirement books in 2014.