Money Buys Happiness — and 5 Other Unconventional Financial Truths

Eric Roberge
8 min readOct 23, 2023

This post was originally published on our blog. Read it here!

After over 20 years in the financial industry, I’ve learned a lot about many technical aspects of money management and building wealth.

I’ve also learned that those strategies and tactics will only take you so far if you miss the deeper, and often counterintuitive or surprising, lessons to be learned about money.

Like how money buys happiness, but only under certain conditions.

And that at some point, money ceases to be a math problem and turns into an emotional puzzle to solve instead.

Or how there is no actual secret to building wealth. (I’ll explain below.) Or how you can create your own luck — and in fact, you have to if you want to optimize your finances.

These are six unconventional truths of money that you should know if you want to build wealth. Knowing them, and acting accordingly, can help you increase your net worth and enjoy more financial success

Money Buys Happiness… If You Know How to Use It

One day, my two year old daughter asked where I was going as I put on my shoes. “Daddy’s going to the office,” I said. She replied (as two year olds do), “Why?”

“Because I’m going to do some work,” I answered.

Again: “Why?”

I laughed and jokingly said, “because we need to earn money!”

She was grinning too and starting to laugh as she asked “why” again (this is her favorite game at the moment). I did my best to answer her honestly, saying, “people can use money to get what they need and what they want.”

If she was a little older, I might have talked more about how money is a useful tool and it’s important to know how to use it in order to build what you want.

This is how money buys happiness, but only if you know two things:

  • How to use that tool effectively and productively, and
  • What is most important to you

You cannot possibly make a truly sound financial decision if you’re not clear on what matters most to you in life.

When Money Is No Longer a Math Problem to Sovle

In building a strategic financial plan at BYH, our team might start by using the numbers to narrowing down the list of possibilities; we can eliminate what doesn’t work mathematically this way.

But at some level of income and assets, money stops being a math problem. There will likely be a scenario in which the numbers look better than other alternatives, but that doesn’t necessarily mean that option is the best one for you.

For most of our wealth management clients, the final answer to the question “what should I do here?” is often determined not by numbers but by the type of life the client wants to create.

The thing is, people are usually pretty bad at knowing what they want or what will make them happy. (And, “being happy” might not even be the right goal! Consider prioritizing fulfillment, purpose, and satisfaction.)

It takes a lot of work, introspection, and experience to get clarity on what leaves you feeling content, gives you a sense of meaning, and allows you to be grounded and at peace.

Spending money willy-nilly will not make you happy, which is what most people do.

You have to deliberately seek out and select specific purchases that fulfill your needs and wants, while avoiding comparison or trying to mimic what other people are doing.

Then you can use your money as a tool… even allowing for the possibility where money buys happiness.

Your values, priorities, and sources of happiness will be unique to you, and there are no wrong answers on what those specific things are. What matters is doing the inner work to determine what that looks like for you.

Money Buys Happiness… and 5 Other Truths About Money You Need to Know

Money buys happiness, but not necessarily in the way you might expect.

Using your money with intention and purpose to access an experience, opportunity, or even material item that directly aligns with your core values can actually improve your life and generate joy.

It’s not about the amount you spend, but the quality of your spending decisions. That changes everything.

Here are some other fundamental truths you should know about money if you want to optimize how you use yours:

1. Some Things Require Experience

Sometimes, the best thing you can do is just that: do the thing! Go for stuff. Try it out. Experiment via trial and error. Have the experience.

Sometimes, that means spending money and that’s okay — even when the experience doesn’t turn out like you hoped.

That’s a learning opoprtunity and can tell you far more about what you actually want going forward than you would have known otherwise.

It hurts to feel like you lost or wasted money, but trying to avoid that can translate into avoiding situations or circumstances that would have helped you grow and develop. Wisdom comes from living.

2. Frugality Is a Highly Inefficient Path to Growing Wealth

I feel like I’m constantly preaching about the importance of saving and contributing to investment vehicles for long-term growth (and, by default, spend less).

That’s for good reason; the more you save and invest right now, the more assets you can build to support your lifestyle in the future. And the more assets you have, the more choice, freedom, and flexibility you have in your life.

As financial planners, we want to help people understand how to use their money wisely.

But using money doesn’t just mean saving and investing, even if we do prioritize that first — and saving responsibly is not the same thing as being rigidly frugal.

Trying to spend as little as possible (so you can maximize what’s available to save) could put you in a good financial position eventually, but it’s often a long slog that means saying “no” to experiences and opportunities that could have added real value to your life (even if they cost money).

If you want to accelerate your ability to grow wealth, it’s usually more productive to focus on increasing income rather than reducing expenses down to as little as possible.

Theoretically, your income potential is limitless. But there is a limit on how much you can save; everyone has some level of expenses they need to maintain to keep their lives running.

We all know the stories of blue collar workers who died with millions thanks to their frugal lifestyles.

Living frugally can allow you to build wealth — it’s simply not an efficient path to getting there. And, it risks genuinely missing out on life along the way.

We also know the much sadder stories of couples who worked and saved diligently their whole lives for grand plans of what they’d do once they finally had “enough” and could enjoy that wealth — only to have one spouse die prematurely, or for one partner to develop a debilitating illness that laid ruins to their wonderful plans.

Good wealth management should stike a balance between saving for the future while also allowing room to enjoy life today — because you’ve got a more efficient strategy to grow your wealth than pinching your pennies forever on end.

3. There Are No Secrets to Growing Wealth

Anyone promising you to reveal the secret to growing wealth is scamming you. There is no secret. For most people, growing wealth requires the following:

  • Spend below your means, which creates excess cash flow
  • Save and invest that excess cash flow so your money makes money
  • Seek to increase your income over time
  • Optimize your finances when you have opportunities to do so

Follow those steps consistently for many years and you will most likely build your net worth over time.

Easy? Absolutely not. Accessible and realistic for most people to achieve? Yes, with the right combination of hard work, commitment, and luck.

Get-rich-quick schemes are exactly that: schemes.

You can get rich, but again, it’s going to take some combination of time, skill, strategy, and luck.

You can make a little of your own luck through good positioning, but the heavy lifting comes from doing the work over time.

4. You Can Make (Some of) Your Own Luck

You can trace the roots of any success back to two factors: skill and luck.

They don’t always show up in equal parts. Sometimes you end up in a good position through 90 percent luck and 10 percent skill.

Some people are more talented and may be able to deploy their skills to greater effect… but even the most intelligent, innovative, and experienced people rely on some degree of luck to succed.

It may seem like your skill level is the only thing you can control in that formula, but luck is not entirely random.

To quote Boston improv actor Norm Laviolette, luck is like a train: you can’t get hit by it unless you’re standing on the tracks.

Making some of your own luck means being in a position to jump on and capitalize an opportunity when it comes your way.

That might mean waiting patiently, or it might mean getting very proactive and chasing something down.

You can also “get luckier” by:

  • Thinking positively. There’s no magic here — when you focus on the positive versus the negative, you prime your brain to look for opportunities. (The same is true of the inverse: when you focus on the negative, you train your brain to keep looking for negative outcomes, experiences, and factors.)
  • Taking reasonable risks. You can’t completely hold back or play it 100% safe and expect to see growth, improvement, or advacement (with your finances or otherwise). You need to understand how to properly assess risks and take calculated ones at the right times in order to secure the rewards.
  • Taking the time to prepare. Opportunities aren’t worth much if you’re not prepared to act when they come your way. You can increase your luck simply by being ready for it when it shows up.

5. Investment Returns Compound… and So Does Behavior

Sometimes the hardest thing about financial planning is not in getting a client to do something.

It’s in getting them to avoid big mistakes, usually by way of unforced errors. Taking the action you didn’t need to take and ending up in a worse position because of it is hard to recover from.

Your positioning is everything — it’s what primes you to jump on opportunities, to make your own luck, and to ride out the storms when they come.

You have to understand that investment returns aren’t the only thing that compounds. Not only that, but things can compound both ways: in your favor, and against.

Behavior, missteps, and distractions will compound and dramatically change your outcome in either direction, depending on where your habits are taking you.

Of course, inaction is a problem too. Ignoring a small problem today means dealing with a far bigger one tomorrow. Neglecting an opportunity now means not having anything to harvest in the future.

It’s so important to pay attention, get proactive, and be willing to make adjustments along the way as you learn and experience throughout life.

Make compounding — in your portfolio and elsewhere — your friend, and you’ll expotentially increase your chances of success.

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Eric Roberge

#FinancialPlanner helping 30 & 40-somethings build #wealth & think differently about #money • Top #FinancialAdvisor in #Boston •