Helping Clients Live a Richer Life
Advisors are constantly trying to impress upon clients the importance of building a healthy nest egg. But there’s another part of the picture that can’t be ignored: What about living a fulfilling life?
“People often make a rational calculation: I have a limited amount of money, and I can either go there, or I can have this,” a psychology professor tells The Wall Street Journal. Too often they decide against an adventure to an exotic port of call or even a brief trip downtown to see their favorite singer, according to recent studies cited in the report.
In fact, it’s common for people to feel that spending money on a vacation or family outing might be less valuable over time than buying tangible stuff like a car or a coat that will be around for a while, behavioral scientists caution in the piece.
Studies suggest there’s a huge gap between the pleasure people anticipate from a major purchase and what they actually experience afterward, says the Journal. Although spending on tangibles — cars, boats or garden sheds — comes with expectations of lasting happiness, the benefits fade after just a few weeks, according to one survey cited in the article. On the other hand, advisors might remind clients that the afterglow from a family trip tends to linger well past the two-week mark.
A common theme in getting more joy from wealth is generosity. Researchers have found that buying things for others makes people happier than buying stuff for themselves. This holds true even for those who aren’t anywhere near wealth, the Journal says.