40% of our happiness comes down to the choices we make. In this episode of Simply Why, Dennis Morton and Katie Brown engage in a meaningful conversation about the age-old debate of whether money can truly buy happiness. They provide a fresh perspective on the relationship between money and happiness, drawing insights from positive psychology and behavioral finance. The hosts explore the impact of personal growth, finding purpose in life, and the connection between retirement planning and happiness.

Your experience with money can contribute to satisfaction, which leads to those other things, those four C's to get to that funded contentment, that idea of underwriting a meaningful life. - Katie Brown

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Collaboration with Shaping Wealth

Welcome to simply why, a podcast about money and purpose, where we pull back the curtain on running a financial advisory business focused on providing intentional advice to couples and families. I'm Dennis Morton. And I'm Katie Brown. Welcome back and thanks for tuning in.

All right. Hi, Dennis. Hi. How are you doing today? Pretty happy.

Oh, I love it. I love it. That's what we're talking about today. And you know what? I'm happy by choice.

We're going to get into that. I woke up this morning, said, doggone it, it's going to be a happy day. Happiness influences so many things that we do. It influences decisions that we make, how we treat one another, how we treat strangers, how we show up in any given day. Yeah.

And we really got to give credit to the team at shaping wealth, which is a behavioral coaching organization that we've engaged with for coaching for Katie and I and for our team, all on positive psychology, behavioral finance, and how we can be better advisors. And the topic of happiness was top of mind in our last session with them, and they started off just asking this group, and it's a cohort of about 30 advisors around the country, what makes you happy? What makes you happy, Katie? Experiences and spending time with family and friends. I mean, that has to be kind of at the core of the happiness for me, feeling like I'm doing something productive, active, and that there are other people around with me.

I have my tribe with me. Yeah. I think for me, it's more of learning a new skill. Like, some of the best times I've had in the last few years have been learning how to surface, learning how to fly fish, getting better at guitar. Like you, I don't idle well, but I like learning new things and looking around saying, let's go try that over there.

I get in a rut. And we've talked before about the benefits of growth and lifetime learning, and I think they all add to the overall happiness. Yes. Yeah. To tie this all back to finance this idea of happiness, we're going to talk about, can money buy happiness?

If so, what does that mean? What does happiness look like? And I think our brains are wired pretty differently, and they have been evolving over time to decide what is happiness? Can we buy it? What do you think, Katie?

Can we buy happiness? You know, that should be a clear cut answer, and typically my answer is no, of course you can't buy happiness. And I think at the end of the day, you can't. Not entirely. However, I do recognize, I think it's a bit of a sliding scale because you do need a certain amount of money just to fulfill the necessities of life and to feel like you're moving safely out of that scarcity place.

But once you get to that point, then there really, truly is the potential for diminishing return. Yeah. Yeah, you can get to a place. I think some of the research that we went through said you can get to a place of satisfaction. But happiness involves something else.

There's an extra layer and even talk. Going back to ancient greek philosophers, this is where that liberal arts degree comes in handy every once in a while. I remember my Aristotle, where the greek way of thinking was that happiness is more about meaning and purpose in life. And they used a couple of different models for happiness. But I think that idea of meaning and significance, we see it in our clients sometimes.

I know I have enough now. What does it mean to be significant with my wealth? To find meaning through it? Meaning in my relationships. I thought that was a really important thing and something that people might skate past if they're only thinking about how much income am I earning?

How big is my portfolio? Something Neil beige talks about in shaping wealth. He has been studying brains and how they function, how they work for most of his career. And there's the system one thinking and the system two thinking. The system one thinking being sort of that, those immediate gut reactions.

And it could be anywhere from pain to pleasure. You take a bite of that cake and it tastes so delicious, and you're like, oh, I love it. But it can also be like the impulse purchase, buying of things to bring that immediate sort of happiness. But usually it's short lived. But then you move on to the system, to thinking.

And that's the deeper thought process. That's where you spend all of your time thinking through things. And you get to that point of, do I feel empty or fulfilled? And what is going to be meaningful? And that tends to be the longer lasting.

So as you talk about finding meaning and purpose in life, a lot of that happens through that thoughtful part of the brain. Yeah. And the reflective, that slow part of the brain, it's asking itself, am I living the life that I want? It's saying, step back from the hustle and bustle of things, the buying a new car or on the dark side, having painful experiences, but reflecting, saying, is this it? Is this what I want to have?

And I think if we're doing our job as planners, we're kind of nudging people into that system. Two, thinking. To slow down, to declutter a little bit and get into that reflective mode, and try and get out ahead of the. Get out ahead of the outcomes that you want, and defining happiness in your own terms. I think they talked a lot about Marty Seligman, who's kind of the founder of positive psychology.

And he had this, it's called the perma theory. Perma stands for positive emotion, engagement, relationships, meaning, and achievement. And one of the things that I wrote in there is that winning matters. Feeling like you accomplish something, even for financial advisors. I was told this early on in my career, you'll see a lot of financial advisors take up woodworking or running marathons or doing things that have a defined completion or some sort of recognition that you're done because the markets always open up the next day.

You're never totally finished. You don't complete a thing. And I think there's a lot of satisfaction for craftspeople who build things to say, here's my finished product. I have an achievement here. And it's a lot of what happens in retirement planning is you get to a place where suddenly there's no more achievements, there's no more top sales, there's no more kind of employee of the month type things.

And how do you replace achievement in your life when that's one of the fundamental steps of happiness? Well, and I think the five things that you mentioned, it's important to recognize you need elements of all of them. They have to kind of work in concert together. You could achieve a lot of things, but then if you're falling short on relationships, or if you don't feel as if the things that you're doing are meaningful, then you're not hitting that happiness kind of on all cylinders. And so much of this is tied up in work.

I mean, just engagement, like being busy on something, relationships, how many of our relationships, the people we see every day at work finding meaning and achievement. So I think that's why that transition to retirement is really a meaningful thing. And we've seen people go through some pretty dramatic changes as they get into retirement and say, oh, my gosh, all those things just disappeared. I have the wealth. Where's the happiness?

And sometimes it takes work in a lot of different areas. You know, when people think about retirement planning, oftentimes it is just the focus on the numbers and the dollars. But to really break it down and go through a full assessment of kind of where you are in these five categories, I think could be a really fruitful exercise. And not just by yourself, but do it with your spouse and ask each other questions like, who do you turn to when you need help. Who knows you best?

What relationships do you want to intentionally improve next year? Who cares enough to challenge the things that you're thinking and doing to really build some of those relationships and figure out where you find your meaning. And it's amazing how all of those things do help to influence some of the decisions that you make and the decisions you make around money and legacy and planning items. It's true. We've talked about decisions like moving in retirement or something like that.

If you're talking to your spouse and they say, like, all of these people are living in my neighborhood, then maybe moving out of the neighborhood is going to have a bigger impact on that person than the other. Again, if only focused on the dollar figures, accomplish all the financial goals, but still miss out on the happiness piece. Right. I really liked when they talked about just this idea of how much our happiness is a product of our disposition, how much is a product of circumstances, how much of it is it deserves choice. What did you think when they asked what percentage of it?

What was your guess? I was surprised by the response. I thought the set point in circumstances, your own chemistry of how you're born, I thought those two things together were probably somewhat equal and accounted for maybe half of happiness. And then your actions and your activities accounted for the other half. I was a little off in my percentage assumptions.

Yes. How you were born, your personality disposition is half of your happiness equation. See, that was higher than I expected. Higher than I expected to. I would have thought that your choice would have been by far the biggest.

Excuse me. Yeah. Your volition, your activities and your reactions, but your circumstances. So whether you're sick or healthy, where you live, just what happens to you, the stuff that's only 10%, 40% is just how you choose to look at it. That's why I say, half joking, I got out of bed this morning and said, I choose to be happy.

That's 40% of the way. Yeah. And the rest is biology, apparently. Right. Amazing how little the circumstances are.

Yeah. It's a good thing I was born a red sunshine. We hear stories, good and bad, all the time. And I think. I actually think that that low percentage on circumstances, I think that can give a lot of families and a lot of people a lot of hope for them to recognize my circumstances don't have to dictate my happiness.

Yes. And to be able to step outside of that and say, there are a lot of reasons to be happy. I'm going to make that decision. I'm going to do the activities and actions and work on my reactions to make sure that I'm stacking the deck in my favor because this thing over here isn't going to hold me back or to even assume I should be happy because I have all of this other stuff going great. But recognize much of that happiness is going to be influenced by the actions.

And that's the part where we all have the opportunity to work on. Yeah, yeah. And Brian Portnoy, the CEO of Shaping wealth, he has this line where he talks about the brain being this massive prediction machine. Like it's trying to connect the dots and the lines and try and predict what's going to happen next. And we're setting our expectations and sometimes we're setting them in the wrong way.

Like if our expectations are off and what's the equation? Happiness equals reality minus expectations. If we set our expectations so high that we can never jump over them, that's going to affect our happiness. And our brains constantly try to do that. We see that with the markets all the time.

Yes, we do are desperate for predictions and want high expectations. Where I'm not saying be pessimistic all the time, but reasonable expectations are going to probably make you happier in the long run. And you know what, honestly, I think it's fair when possible to look at expectations and say how much of my expectation is within my control. Where are the things I can control or can't control? And if those expectations are filled with uncontrollables, then it's probably time to lower your expectations.

Yeah. If somebody asks me to distill my investment philosophy down as low as possible, control what you can control. That's it. Yep. And one of those that the biggest thing you control is your response, your expectations, and then account for the factors, because that's the part, and I may have said this on the podcast before, that's the most disappointing part of, say, the last four years pandemic on is that we saw every, it seemed like everything under the sun, the craziest sets of circumstances, anything could happen.

And yet many of us are still walking around saying those things don't happen. Well, they just did. We just, and we, and we came through. We're here and you know, markets have rebounded and all that stuff. And it's not all about performance, but at the same time having that very real sense that stuff's gonna happen and it's only 10% of what's going to contribute to our happiness in life.

The opposite effect is big stuff can happen, like lottery ticket stuff can happen. And there's a lot of evidence that that doesn't always contribute to. That's an extreme example that that can contribute to misery. Yes. Yeah.

Unfortunately, I think that is often the outcome for lottery winners, which is a sad thing. But if you win the lottery, 40% of your happiness is going to be tied to your activity. So there's still hope. Let's talk about the four sources of deep contentment. Those four C's.

Yeah. And this is something I think that Brian Portnoy uniquely is bringing to the table. The four C's of deep contentment, number one being connection, sense of belonging. So, relationships. We talked about that.

There's definitely a lot of overlap in some of these things. Control, as we just talked about having autonomy over some decisions and being able to define various parts of your life and the things that you want to do, but also recognizing where you don't have control. I think that's an important piece of that, too. Competency. Do you want to talk a little bit about that one?

I like that. This idea of pursuing mastery, maybe this is why learning a new skill, I think is really important for me. That just this idea that there is something to get better at, that there's a belief that if you're not growing, you're shrinking. And I think that idea of there's no standing still. And I think that pursuit of mastery and competency has always been there.

People who strive and people who don't. It's not ambition. It's just that little getting better every day. And then context. We talk a lot about context in our firm, in our world, and truly believe a lot of what we do is help to build context for clients and for families that we serve, to kind of put things, hopefully help them to better understand the purpose of their wealth and how it fits in the bigger context of the financial plan.

So sometimes we kind of need that to take that step back and see the bigger picture. You know what, Katie? I'm thinking about this. And one of the things that we discussed in this happiness session was expectations. And what do clients expect of us?

And I think, and where do they get it wrong? And I think the most wrong expectation is that we have control over the market. So it somehow can be corralled, that we're wizards or experts, that we know the exact right investments at all times. If we were to right size expectations, it would be that we should be providing context for people, the context of a financial plan, the context of market expectations, the context of the environment that we're operating in. That is the most useful thing we can do.

Call it context, call it perspective and purpose. It's all kind of tied into that. Yes, that is absolutely one of our roles. One of our biggest roles as financial advisors, I think, is to provide the right context. Where do you think we best meet the expectations or exceed?

I'd like to think that we most exceed our client expectations in listening and taking the time to understand their priorities and support them and become cheerleaders for their priorities. Not just understand some of their goals that they want to achieve, but for us to genuinely get really excited when a client calls up and says, hey, I'm going to do this amazing thing. Yeah. And my answer would be in simplicity, because I think oftentimes they show up and tie it back to happiness. How are you going to be happy with your financial advisor?

It's by having reality exceed expectations. And I think by having it be simple and not be like a trip to the dentist, marriage counseling, and high school calculus all at the same time. If we can do that and be excited, be energetic for them, I don't think that's what they're expecting when they walk in. Yes, we do hear that often from clients. That's aspirational for any profession, especially one that involves money and emotion and all those things.

It's just kind of all gets back to can you buy happiness? Know what? Your experience with money can contribute to satisfaction, which leads to those other things, those four seeds get to that funded contentment, that idea of underwriting a meaningful life, which I love that I think this is an important conversation because it eventually gets us to a place where we're okay talking with our clients about what it means to flourish. Like, what does thriving mean for you? What does happiness mean for you?

Is it the same for you and your spouse? I've been asked before, like, what are the things we should be talking about in a client meeting? And they might expect a portfolio review and kind of a balance sheet review. But this is the stuff that if we can plant that seed and spark that conversation, I think we've done our job. Yes.

So thanks so much for tuning in today. These are the types of conversations that we love to have and that we welcome with our clients and with the families we're privileged to serve. Thanks for tuning in to this episode of simply why, a podcast about money and purpose. We hope you enjoy getting to know us, how we approach leading a financial advisory practice, and the work we do every day to help families and couples make important financial decisions. Morton Brown Family wealth is an SEC registered investment advisor.

This podcast is designed for educational and informational purposes and not intended as investment advice. More information can be found at www.mortonbrownfw.com.