The psychology of happiness: Why money has little to do with it

It is unusual for a large global investment bank to present research on the psychology of happiness as part of their Global Equity Research. But that is exactly what I found in this attached document from Dresdner Kleinwort Wasserstein.

If you are looking for investment related advice, read no further. Also, if you invest in the hope of being financially well-off – so that you will be happy one day – you perhaps will learn from a reading of this piece of rational financial philosophy. Because according to them (and well – no surprise perhaps for a lot of Indians or followers of Eastern Life Philosophy), Money is not the source of happiness – beyond the point of lifting you out of poverty and giving you the basic means of a decent life.

And the source of happiness (or as they say – the contributors of happiness) revolve around three factors. First – your genetic make-up which you inherit from your parents or family is a 50% contributor to your happiness. Some people are just genetically pre-disposed to being happier than others. Second – your life circumstances – things like demographics, marital status, income, health, religious affiliations – are only a 10% contributor to your happiness. And Thirdly – the remaining 40% is determined by intentional activities that you do to increase your happiness by focusing on your happiness one day at a time.  These activities include 3 types: behavioural i.e. habits like exercising; cognitive i.e. mind-related like consciously focusing on living in the moment; and volitional i.e. discretionary activities like devoting yourself to serving a cause.  Basically – you make 40% your own happiness by doing activities that increase them!

So there it is – the writing on the wall – from people who advise other people on how to make more money – telling their clients that, after all, it won’t make them happy. Happy Reading!

Happiness