Financial Independence

Does Money Bring Happiness?

What makes you happy? Like really happy. More money will not necessarily make you happier but building your investment strategy around happiness will certainly help.

We were pleased to read this recent article in The Globe and Mail a sentence about wealth and happiness that simply resonated with us. Your investments do not need to generate the greatest returns; they need to generate the greatest amount of happiness.


Here’s a radical thought for retirees-to-be: Instead of obsessing over how to squeeze every last drop of return from your investment portfolio, think instead about how to generate the greatest amount of happiness from your accumulated wealth. – Ian McGuagan


This statement is perfectly in line with our outlook on life. We keep it simple, enjoy every moment of it, and maximize happiness.

The article goes on saying that there is a finite amount of wealth one can accumulate until it actually becomes a hassle.


Once you’ve saved up more money than you’ll ever spend in retirement, you have to become a wealth manager as well as a retiree. – Dr. Finke


Keep it simple

The solution to all of this is to have simple investments that do not require much managing. Having a three-fund portfolio, for example, would only need a yearly or bi-yearly reallocation. This is the whole basis of the Lazy Portfolio that takes its name from this exact characteristic. You could easily build such a portfolio with Vanguard or other index fund providers with a simple allocation such as:

  • 33% in Vanguard Total Stock Market Index Fund (VTI)
  • 33% in Vanguard Total International Stock Index Fund (VXUS)
  • 33% in Vanguard Total Bond Market Fund (BND)


Lazy Portfolio with Vanguard


Once you have the right asset allocation for your investment style, you can relax and enjoy the ride.


For something even simpler, we suggest Wealthsimple.

Start your automatic investment account today!


The key to maximizing happiness from your investments is to keep a healthy mind and portfolio. By keeping your emotions out of investing and focusing on facts. You can minimize stress and anxiety that market swings might induce.

As the great Warren Buffett says, if you are a saver (in your wealth accumulation phase) you should be happy with the stock market drops. Market swings are just great sales where you can buy your favorite investments for less. If the market tanks 30% this summer, we will still be saving and buying more Vanguard index funds for 30% less!


stockmarket on sale


Buffett also said to invest in things you understand. Keep it simple and refer back to the numbers when in doubt. We use tools like Personal Capital, FIRECalc, and cFIREsim to back-test portfolios and retirement simulations.

For us, knowing that our asset allocation would have survived the Great Recession or the 2000 Dot-com bubble is quite reassuring. If ever you doubt your investment strategy, go back to the research. Remember the reasons you chose this strategy to begin with.


Make it happen

Once you know what you are investing in, you need to know what you are investing for. Having goals is a great way to keep a healthy portfolio. It will keep you moving forward while staying positive.

Whether you break it down to small, short-term, goals such as saving $2,000 for a vacation or a general long-term goal such as reaching financial independence in the next decade, having something to look forward will motivate you to stay the course.

Look forward to the freedom wealth can bring you rather than thinking about the material things wealth can buy.

When creating your goals, focus on what you can control and keep it visible. Most of us forget or simply overlook the objectives we give ourselves.



Keep your goals current and never be shy to adapt your goals. We are curious beings, we constantly learn. You might adapt your goal of saving $1,000 a month to $1,500 once you realize how your standard of living did not really change even after depriving yourself of those thousand dollars.


Everyone has there own ways

After asking a few of our blogger friends to share their thoughts about wealth, we saw how it contributes to there happiness.

Teacher Investor said that wealth allows him to give back. To do what he loves. Just like us, his investment strategy is congruent with his lifestyle; simple, streamlined, automated (i.e., not time intrusive).

For his part, Akash Sky said that wealth does not necessarily provide him with happiness, but it most certainly prevents unhappiness such as struggling with finances, unable to purchase high-quality food, etc.

His investment strategy, which involves investing into a ton of random things, provides him happiness through knowledge. He enjoys learning about different asset classes and the specific details about investing in them.

For example, he learned recently that our interest rates are not directly related to the Federal Funds rate (fixed income assets dropped starkly when the FED proposed to increase the federal fund’s rate but have since more than recovered their fall due to our interest rates falling).

His investment strategy greatly differs from ours. We like to keep it as simple as possible with index funds while he prefers to invest in individual stocks and likes to spend the time researching. There is no right or wrong strategy, as long as you are enjoying the journey.

Our friend Fulltime Finance mentioned that wealth buys less stress and the ability to take greater risks. What you then do with that reduced stress and greater risks can lead to happiness while Matt from Finance Yo Self noted that wealth can be used however you see fit to make you happy.

For some, it’s giving it all away to causes they believe in. For others, it’s using that wealth to build more wealth. This also means that everybody has a number that is “enough” – enough to fulfill whatever purpose, whatever they’re trying to achieve, from having wealth.

However, for Matt, the purpose of his wealth is to give him more choices – with the understanding that you can do everything right and life might still not work out the way you hope.

You can’t control everything.

As far as investing, this translates into a hands-on, DIY approach (control) with a set of guidelines designed to prevent me from making decisions based on what’s happening now (what you can’t control).

Coming back to our point of keeping things simple, Wall Street Physician mentions that it is important to keep things simple with your investing and personal finances. As you become wealthier, the added happiness from having an additional dollar goes down. As you accumulate wealth, you should reduce the time-consuming micromanagement of your personal finances. This frees up time to do the things you really love.

We got a similar response from Mrs.Groovy from Freedom is Groovy that said that wealth allows her to feel light and unencumbered.

No nagging thoughts or worries. It provides more mental space for enjoying simple things in life like relationships, nature, being a good person, and doing good unto others. Just like us, she finds that wealth is freedom.


Wealth can’t buy me a happy marriage, a happy child, or a happy dog, but it can buy their good health in the form of healthcare and good food to fuel their bodies, and it can buy us the free time to spend with each other, all of which are important foundational aspects of being happy. – Revanche from A Gai Shan Life


Tawcan, for his part, finds that wealth opens different doors and creates options in life. One really needs to differentiate between happiness and joy.

Happiness is typically externally driven and momentary. Joy is more internally driven and can last for a very long time.

Lastly, our friend Lily from the Frugal Gene shared how wealth allowed her to leave something behind.


I can leave something for my children someday. For those reasons and only those reasons do I consider wealth as good.

I’ve once sat on a pile of gold (figuretively) but I couldn’t help feeling sad and lonely because there was no one to share it with and no purpose to utilize any of it. – Lily


To conclude, always keep in mind how your wealth can provide you with the most happiness. Build your investment strategy around that premise.

Thanks to everyone that shared their stories with us.

We invite you to comment below. How does wealth bring happiness to you? We all have our ways, find yours. Xyz.



10 replies on “Does Money Bring Happiness?”

Thank you for including me in your feature! These are amazing mind gems. My favorite are Wall St Physician and Tawcan’s. We’re still young so a lot of our investments take more time (just from the sheer necessity to learn everything) but it would be nice for my hubby if he could slow down and have some free time to do whatever he wants to do.

It took me a long time to understand what Tawcan is getting at. Joy is something that I kind of have to fight for, it’s a personal struggle. Wealth has nothing to do with that (unfortunately, man would it be easy if I can just buy some happy…:P)

That and for satisfaction, cheerfulness, joyfulness, glee, delight, well-being, and enjoyment. 🙂

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