Balance: How to Invest and Spend for Happiness, Health, and Wealth

by Andrew Hallam

We often buy things to feel good. But hedonic adaptation sets in. In other words, the excitement of buying something new soon wears off when that new iPhone or purse becomes, well, just another phone or purse.

Instead, he didn’t want anyone to see him behind the wheel. When we’re considering a high-status item, we should ask ourselves if we would still buy it if nobody else could ever see

kick the bucket young.8 Remember, time is the only nonrenewable resource we have. That’s why we should treasure it. If we choose to work at a job we hate because it pays a lot of money, we’re trading something precious for something that won’t necessarily improve our lives. If we want to maximize our health and happiness, that’s worth remembering.

. . anything that brings people together. After all, we crave real connections. Not having them can shorten our lives, make us less happy, and lead to regrets in our final years.

Your life is like a dark hourglass. It gets tipped at birth, and nobody knows how much sand they have left. That’s why we should live with the knowledge that every day is precious. If we’re going to emulate the lifestyles of others, who do we choose to follow, and why?

Life really is like a dark hourglass. Nobody knows when their sand will run out. That’s why we should strive to live the best lives we can, today, tomorrow, and onward.

Prioritizing your spending means cutting back on things that don’t enhance your life. To figure out what those things are, start by tracking what you spend and earn.

A Few Tips for Living Well Never take a financial cost at face value. Always consider how that money could grow if it were invested. Start by tracking what you spend with an app that allows you to record expenses in categories. Think of your household as a business. A business that doesn’t track expenses is likely to go bankrupt.

$500 a month. And that might not matter. If you invest what you can, you’ll still have far more money than you otherwise would have had.

But let’s get back to a bit of history. When we were in high school, many of us were tested on the periodic table of elements. I wish teachers tested students on rolling ten-year returns for stocks instead. If they did, more people would realize that ten-year returns are meaningless distractions in the face of a long-term plan.

That’s why diversified portfolios with stocks and bonds make much more sense. After all, most people overestimate their ability to emotionally tolerate market drops.

He replied, “It’s called a loss leader. It gets people in the store. And while they’re here, they usually don’t just walk out with bananas. We make a profit from them when they buy other things.” Fidelity’s zero-fee index funds are much like that. They get investors in the door, people who might be tempted to add some of Fidelity’s more expensive actively managed funds to their portfolio (especially if one of those funds posts a strong, recent performance). If you want to beat the vast majority of professional investors (after fees), build a portfolio of low-cost index funds. Ensure that it includes US stocks and international stocks, as well as a bond index fund for diversification and stability.

He always stays invested. He says, “Stock market forecasters exist to make fortune tellers look good.” You can test this yourself.

It would be even better, of course, if they never saw their portfolio balances or heard investment news. Remember that Fidelity study? The best investors forgot they had accounts—or were dead. Human actions and reactions kick future progress in the groin.

ascetic time limits on weekends.”9 Assigning regular chores and limiting social media won’t guarantee success. But it does increase the odds. Success, after all, isn’t hardwired—especially when it comes to money.

I wanted to respect that student while communicating an important lesson. I said, “We’re often afraid to try new things. We fear failure, so when we fail at something, we’re often afraid to try again. And sometimes, other people say we won’t succeed at something because they, or someone they know, tried the same thing and failed. Listening to such advice can be like putting failures into your future.”

Henry Ford said it best: “Obstacles are those frightful things you see when you take your eyes off your goal.”