6 Ways You Can Live a Happy Financial Life

Evidence shows that it's the experiences in life that matter, and how precious our time is. These six keys, as identified by Happify, could help you live a happier -- and wealthier -- life.

Apr 18, 2014 at 8:00AM

It's funny how much time and energy we put into obtaining possessions, while mounting evidence indicates that these items don't really buy us happiness. I saw this great infographic from Happify, and it's well worth sharing. As I read through it, six factors jumped out at me as the keys to finding and living a happy life, one that is both emotionally satisfying and financially rewarding.

These include giving to causes we find important, the value of experiences versus physical possessions, and building strong relationships. One of the most interesting things? Money does buy happiness -- at least up to a certain point. Beyond that, the extra money doesn't seem to add extra happiness.

In short, the idea is that we should focus less on buying stuff and more on paying ourselves. After all, when retirement approaches, financial freedom will be what pays for all those experiences, charitable giving, and time spent with people we care about. Here are a few slides I put together based on Happify's findings:

In short, money is important, and things are, too. But only to a point. It looks like it's better to use disposable income to support causes we care about and to build up our nest egg. After all, when retirement comes, every dollar will help us enjoy more experiences with the time we have left on Earth. 

One simple strategy? Invest in index funds such as the Guggenheim Rydex S&P Equal Weight ETF (NYSEMKT:RSP) or SPDR S&P 500 Index Fund (NYSEMKT:SPY). Both track to the S&P 500, so by investing in either of these two funds, you are basically "buying" the whole index. The difference? The Guggenheim Rydex Equal Weight offers just that, equal weight of all 500 stocks. The SPDR S&P 500 is weighted by market cap, just like the actual index. In other words, the larger a company is, the larger a percentage of the index represents.

Since larger companies aren't as likely to go up in value as quickly, this weighting can limit the impact of the gains of smaller, faster-growing companies. On the other hand, those larger companies can provide more stability in a market downturn. From July 2007 to March 2009, the S&P 500 and SPDR index fund both lost about 54%, including dividends, while the Guggenheim Rydex Equal Weight fell more than 60%; investors lost at least 6% less in the SPDR. However, the Rydex Equal Weight has absolutely outperformed since the bottom, gaining some 276% in total return, compared to 200% for the SPDR index fund. 

The most important message? Money and possessions can help us live happier lives, but only up to a point. Beyond that, we often get much more from experiences and giving to others. Plus, keeping treats just that, and not regular everyday experiences -- even a bar of chocolate -- usually means we will enjoy them more. 

Pay yourself first, making deposits monthly, or even out of every paycheck. Invest in every market, without fail, for many years. The evidence shows that you'll quickly adjust to the smaller paycheck, and when retirement comes, you'll be more likely to have financial freedom. That means you'll be able to do more of the things that Happify claims will lead to a happier life.

How to get even more income during retirement
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Jason Hall has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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