The 5 Steps to Buying Your Happiness in Recessionary Times

President Harry S. Truman once said; “Recession is when a neighbor loses his job. Depression is when you lose yours.” While you may not have lost your job, more than likely, there’s a good chance you have lost a lot of money in your portfolio and are probably wondering what to do. It doesn’t matter if you are a business, individual, or charity, it seems as if all groups have lost faith in the buy and hold philosophy, and many are beginning to wonder if their advisers are actually doing anything to help them. Before you fire your adviser, put everything into cash under your mattress, and hunker down for nuclear Armageddon, there are a few things you should understand about how investments ideally should work within your plan, the role of advisers on your team, and important questions you should be asking whether you invest on your own, or you have someone helping you.

Revisit Your Goals
What’s important to you? If you found out you only had 6 months to live, what would you want to do in your life? Try writing your own eulogy. How would you want to be remembered? What would you want people to say about you? By starting with the important questions of life, you can get a really clear gut check and determine if you are actually doing what you want to do in your life. What are the things that came up? Often, we have limiting assumptions about what is possible in life. We use phrases like; “Some time, some day, if only blah, blah, blah”. When you take the time to have these conversations with yourself (or an adviser), frequently our real values get uncovered and we identify things we’ve always wanted to do. For example, many people say, “I’d want to spend more time with family”, or “I’d want to travel”. Once you have a list of these things, then then think about the reasons or excuses you’ve been making on why now isn’t the time. Usually this sounds like “I don’t have the money”, or “I’m to busy”.

Prioritize Your Goals
OK, so if not now, when? How much is enough? When will be the day? Perhaps you’ve achieved success in your business but you simply just don’t want to be bored with a “traditional retirement”. The important thing to consider here is WHEN. While some goals might seem crazy, no worries, just write them down. Ideally, when would you want to spend more time with family? What would you do? Where would you travel? Start to create some ideal time frames for the things that you said were important to you. Don’t worry about whether you think they are realistic at this point, just recognize that spending more time with your family WOULD make you happy, and write it down. Keep doing this exercise until you have at least 10 items on your list. Once you have the items listed, then prioritize them in order of importance. I like using index cards to do this since it allows you to move things around as you think of new things. Now ask yourself which of your goals you would be willing to give up in exchange for achieving the most important ones. Once you have completed this exercise, you have the foundation of a very powerful life plan for yourself. Now the question becomes how to pay for it.

Buy Your Happiness
OK, so how the heck do you do that right? “But I always thought…,blah, blah, blah”…Stop. Yes, money CAN buy happiness. I know,… I had you at hello, right? Here’s the thing about that…Having money will NOT make you happy, however figuring out what makes you happy, (as we discovered above in the “eulogy” exercise) formed the basis of your new plan. Now that you know what DOES make you happy, (spending more time with family, giving back to society, etc., now the question becomes, how do I use my wealth to buy those things for myself? Before you go postal on me, ask yourself, how much would it cost to leave your job so you can spend more time with family? What’s preventing it now? Perhaps you answered that making a difference in the world would make you happy? Well how much does it cost to make a difference? How much time do you want to spend making a difference? What’s preventing you from doing that now? OK, so your job is preventing that, how much do I need to have in order to “retire” so I can do the things that are important to me. Are you following all this? The point of this is to start to think about what it will cost, both personally, and financially to achieve your most important goals.

Position Your Finances
More than likely, taking less risk with your investments was one of your goals, (aka “Sleeping at night). During our exercise with the index cards, I asked you to prioritize how important your goals were to you. Where did investment risk fall in that conversation? The question really is, “What are you willing to do to reduce the risk in your portfolio?”. I think an even bigger question is, “How much risk do you really need to take in order to achieve your objectives?”. In my experience, investors are quite familiar with the question, “What’s your risk tolerance”, but most people have no idea how to answer that objectively. I have good news for you. Now that you know exactly what makes you happy, what your priorities are, and what you are willing to give up in order to achieve them, you’ve just answered what I believe is the most important question in planning; “How much, by when”.

Get Help when Needed
The fact is, we as investors usually don’t take the time to do these exercises, but now more than ever is the time to start. You have to know where you are, and what corrections you can make to get you back on track to achieving what’s important. If you don’t know how to do that, find a good adviser who can. If you have an adviser, talk to them about what you discovered about your goals and see how they can help you achieve them. If you don’t feel comfortable discussing this with your adviser, perhaps it’s time to find another.

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4 responses to “The 5 Steps to Buying Your Happiness in Recessionary Times

  1. Ey guy, Good post, I like the Truman´s Quote is sad but funny… Its true that people should review their goals but not only in crisis periods. They should do it frequently. Probably, if every people think to themselves, -“I am really happy?”- most of them would know that they are not happies. People know that this is a great problem and they prefer don´t ask to themselves. Big mistake. The only way that you have to find your own happinest is asking to yourself. Nevertheless, I´m not agree with you in some of your ideas, but not everything can be “gold dust”. Risk aversion is closely related to the fear that a person has of losing all his money, but only the greatest risk takers keep their nerves on situations like this crisis. Only they are prepared to earn money nowadays. The only thing that is really important in the stock market game is don´t follow the tide, “I only follow my own assessments”. Most of yours follow the tide, this is a problem, “you guy, go against the flow…”

    Good Luck

    • Hi Jaime,

      Thanks for reading my post. Yes, it’s always a good idea to review one’s goals, regardless of what the market is doing. Tax time is as good a time as any and it’s on the calendar every year. Not everyone wants to be a risk taker, as that was one of the points in the article. If you can afford to achieve all your goals and be happy earning an income from municipal bonds, why take the risk? If people are taking risk, I believe it should buy them something in return for that risk. More risk might buy the ability to retire sooner, save less per year, leave more to kids, or generate a larger income at retirement. People don’t generally think in these terms and there is no connection between the “How much by when” question, and the investment style in their portfolio. The key is to connect the two, and CHOOSE. Less risk might mean needing to work more, less income, or less to pass to children. It’s all a matter of choice, yet people seldom make that connection.

  2. Hi Rich,
    Again, I agree with some of your ideas. -fear&happiness- In my opinion, this is the key. Wich is the relation between both?
    Of course, not everybody is prepared to be a risk taker, because this means not being afraid of the future, and not all of them have the capacity to be happy because fear eat solves. Fear is the fatal instint that doesn´t allowing us to be happy.
    We should think in which are our goals… Why don´t people do it? I tend to think that they have fear to change their habits, they believe something could be worse, they have no confidence to believe that something could be different and better in thier lives, and these things are fear. Risk aversion is how each one is facing the fear. You should create you portfolio correlated with your aims and if your goals are not very ambitious state bonds will be a good bet. That is everything I mean.

    Good luck

  3. Richard
    Fact filled post….. Buying your Happiness.. A great hook very timely advice. Time to re-set and focus. A wise man once said.. Money can’t buy you Love. But maybe thats old school. In our micowave society we did loose faith in the buy and hold pholosophy and like all good things have come face to face with it’s reality. Not as we wished it to be.. This too will change. Look at it as a massive reality check. Now lets start boot again, get our real goals in check and maybe this time around we can buy happiness as a matter of fact no need… You see happiness is here and now. Look around and give thanks for what is, right now…. Just look at those we help through KIVA, lets take a lesson from them. For me happiness is helping and giving.

    PS: Looking foward to your film. We are also in Pre-Production on our CGI Animation Film, Zea’ Zoo and the Land of Boo “An Urban Fairy Tale”. Visit

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