Are You Financially Happy?


family happy

January 16. 2018

Clap along if you feel like happiness is the truth…

Do you know the song? It was released in 2013 by Pharrell Williams. It came to my attention as a result of an article that focused on how this popular song had very different effects on its listeners. Apparently, on hearing the words, some people would feel angry, or even sad. I am certainly no life coach but I understand that life is not always happy. I believe one sign of maturity is the recognition that even a “happy person” has both ups and downs. We should probably be grateful that we do not stay in a state of perpetual pleasure, or perpetual despair.

The concept of happiness can also be applied to our finances. For many people financial happiness is based upon having enough money for their desired quality of life over their remaining years, with some cushion to provide reassurance. If we could quantify this simple definition of financial happiness, we could call this amount of money our Financially Happy Number.

These simple ideas seem to have relevance given current valuations in the equity markets. If we had a million dollars of value invested in the broad US equity markets in October, 2007, and continued to re-invest dividends, we would likely have reached a state of despair by March, 2009 when the steep market decline would have reduced our value to $460,000, a drop of 54%. If we had resisted the temptation to give way to depression, and selling out, our investment would have recovered to the joyful level of approximately $2,200,000 today.

In theory, the current strong market should have taken every equity investor closer to their Financially Happy Number. Our hypothetical $2,200,000 might be too low for some, but the numbers can be adjusted for each person’s situation.

So, what is your Financially Happy Number? Most people under 60 will feel they are not there yet, and will need to continue to work. From a purely financial perspective (there are other reasons to work after all) the calculation of how many more years of earning income are required will depend on establishing a goal, knowing how much income can be saved, and investing available funds intelligently.

If you are in the position where you have already surpassed your Financially Happy Number, this might be a good time to review your portfolio and, while continuing to invest intelligently, consider strategies that will help preserve and protect that Financially Happy Number against a downfall. Putting in place such protection will help you deal with a market down turn, and reduce the chance of feeling that you are not in control.

Although quantifying a precise Financially Happy Number is probably unrealistic, we can help you evaluate whether you have reached the level of financial wealth when preservation becomes the main driver of your strategy. In fact, crafting, developing, and then protecting some broad estimate of a Financially Happy Number should likely be a core part of everybody’s planning process.

Lloyd Flood


I Want It Now


i want it now

I recently ordered an item from Amazon Prime only for the package to be delivered after the promised delivery date.  It turned out that the error was mine: I had not checked that the entry code for my building was correctly included with the address instructions.  Initially, however, I was very frustrated at the failure to meet the promised two day delivery window.  Looking back, I am surprised that I found the late delivery so disturbing, especially given that receipt of the item was not time critical.  The experience, and my reaction, illustrates how the world of retail has changed, and particularly how the expectations of consumers have risen.  We have always wanted our purchases as fast as possible, but we seem even more determined to have immediate gratification.  After all, only a couple of years ago I would have delighted if my package had been delivered within a week!

The new standards for efficient delivery have major implications for the way many businesses operate.  Walmart is now competing with Amazon’s prized two day delivery schedule, and they are even offering this service at no charge for orders over $35.  Amazon charges $100 per year for their equivalent Prime membership. To try and combat the new competitive threats, Amazon has introduced free 2-hour delivery on select goods in certain cities; a service which seems to be a logistical and administrative wonder. Behind these remarkable service commitments, a whole new industry has developed with the sole focus of providing the fastest possible delivery timelines.  The impact of this new industry can be seen in the high demand for industrial warehouse space. Moreover there is a continued rise of “last mile” delivery services such as LaserShip, and established players such as USPS have implemented Sunday package deliveries.

The “mentality of now” can be seen in changing consumer expectations beyond online retail.  In the entertainment sector, the rise of Netflix has brought with it the growth of “binge watching” TV shows.  Netflix had led the way in making whole seasons of popular TV shows available all at once instead of releasing new episodes once a week.  In a short period of time, weekend-long cable TV marathons have become an option of choice for many US households.  Of course some would argue that it is more fun to ponder the cliffhanger questions for a few days rather than moving quickly to the decisive episode. It is likely that the question “who shot JR?” would never have become a media story in the modern world.

In the midst of this normalization of immediate gratification, I hope I can find some time and patience to reflect on the my good fortune to be living in an era where my wants as a consumer can be satisfied so quickly. Maybe I should even take some time before watching the next episode, or resist pressing the next day delivery button. Quite often the pleasure of getting what we want is enhanced if we have to wait.

Carey Blakley