The Formula For Happiness (#10)

There’s good news in this episode! Sure, life has its share of challenges, heartache, and setbacks — we’ve all been there. But host Josh Nelson explores how even those difficult experiences can lead to growth, perspective, and better financial decision-making.

In this insightful rerun, Josh talks about:

• Reflecting on the past and what it teaches us
• The balance between suffering and happiness
• The stories we tell ourselves — and how they shape our choices
• Using your past experiences to make wiser financial decisions

It’s an encouraging reminder that even when life feels uncertain, there’s always something to learn and build from.

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Podcast Editor: Tim Leaman/info.primegen@gmail.com

Transcript

Hi, everyone. Welcome to the Wiser Financial Advisor show with Josh Nelson, where we get real, we get honest, and we get clear about the financial world and your money.
Merry Christmas, everybody. Crazy. I can't believe it's already December. And it's interesting lookin back. I think this is the time of year when we all reflect a bit on the year we’ve had. Of course, we're enjoying the festivities and our families while looking back on the year that was, and then also anticipating what's coming up for 2021. And for a lot of us, we look and see if the year was what we expected or not. I'm guessing there aren't many people that had 2020 turn out like they thought it would.

We've talked about the fact that it's tough to fight reality. In other words, don't fight reality. There are things we can't necessarily control, and believe it or not, there is a formula for happiness around this. So what's an area that you're happy with? Try taking a second to think about one area. We've got all these different areas of our life—health and career and family relationships, things like that. What's an area that you're happy with, or you could be happy about if you wanted to be? And why are you happy with that area?
I believe the reason why you're happy with that area—or the reason I’m happy with the area that I would come up with—is because of life conditions around us. If our life conditions match up with the story we have in our head about how life is supposed to be, then that's like our blueprint. So if our life conditions equal our blueprint, then we're probably gonna be pretty happy because it's matching up. It's congruent. So the formula for happiness is: Life conditions equal our blueprint. We can put that in an equation. 

Put it in your mind's eye: When the letters LC (life conditions) equal BP (blueprint), you have
happiness. So that's good. The formula for unhappiness is kind of the opposite. What's an area in your life that you're not happy with, or maybe you're not as pleased with next to some other areas in your life? Something isn’t quite matching up. And why is that area not where you want it to be? So, the formula for unhappiness is: Life conditions do not equal our blueprint. We tend to be unhappy or depressed or sad or whatever adjective you want to use to describe how you feel when your life conditions don't equal your blueprint.
Think about the blueprint. I'm not talking about writing it out or some big fancy thing; I'm just talking about this story that we all tell ourselves in our head on a day-to-day basis about the different areas of our life and if we're happy or not. There's something else to be aware of and that's the suffering that exists in the world. Clearly there's a lot of bad things that happen, things that we consider tragic or terrible. And part of the formula for suffering personally is when we think about circumstances in the world, the news, whatever it might be,
and those life conditions don't equal our blueprint. Things in life are not matching up with the way we think it's supposed to be. And we believe that there's nothing we can do about it. We have no control over it. We're just helpless. That is suffering. Does this resonate—that the formula for happiness and the formula for unhappiness can apply to our life in general?

Most people would probably agree that there's at least one area of their life—even if they're not in a great place right now—at least one area they can look at and say, “Hey, you know, I'm generally happy or okay. And so my life conditions equal my blueprint.” Also, naturally we're all going to have an area that we're less happy about or maybe unhappy about.

Okay, let's say that you're in a place or I'm in a place of suffering where at least the perception is that I believe there's nothing I can do about it. There's no control and I feel helpless about whatever it is. Let's use an example, a big example, right? In 2020, most people did not expect we were going to have a pandemic that would shut down the world economy, certainly kill a lot of people, make a lot of people sick. And most people would say that COVID isn’t an area they're real happy with and the fact that this pandemic has had such a far reaching impact on their own life and on other people's lives and on the world economy. So there are certainly areas we wouldn't have chosen. Maybe you've gotten really sick yourself. Your health has declined or maybe you've even lost a loved one. In my career as a financial advisor, I consider it an honor to walk through really intense parts of life with people. Many might think, well, aren't you just dealing with dollars and cents? Yes, certainly we're
dealing with math, we're dealing with dollars and cents, but really we have the kind of relationship with our clients that we know everything about their lives. They share with us about their family dynamics, their health, their travel, their celebrations, all kinds of things that we get to enjoy with them and walk with them as they experience.

But that experience sometimes includes those suffering times. It happens, you know, that people lose loved ones, spouses, kids, jobs—all kinds of stuff that people have happen to them and they didn't have any control over it. In a lot of cases, people feel pretty helpless. And so they are at least temporarily in that place of suffering. You may find that you're suffering or maybe there's somebody else that you love or care about that’s suffering when life conditions ( LC) do not equal blueprint (BP) and you believe there's nothing you can do about it. You have no control and it feels like it's just going to be this continuous thing that's never
going to get better. When this feeling descends, one of the choices is to blame somebody, whether yourself or others. A lot of people default to this, myself included. It's easy to go there. Now, ultimately this isn't a productive choice because it really doesn't do anything except to keep you in that place. It's not productive because nothing really changes. So that's option number one—blame something.

There's a point in time when people get sad, they get angry. Sometimes we go back and forth and we get sad and angry, then accept whatever it is. And then go through getting angry again. For example, when I think about COVID, about the pandemic we've had this year, there have been days when people were scared, nobody really knew what was going on. I would go through the various stages of the grief cycle daily. I’d even go through asking, “Really, is this happening?” In the beginning, there were very few optics and we had very little idea of how deadly this thing was, or how it was spread, anything like that.

Now, here in December 2020, although we're not out of the woods yet, we can see on the horizon that this thing is going to finally get better. There is a vaccine or more than one vaccine, and those are going to start to get administered. Sooner or later, this thing is going to go away. So if you find yourself in that place of suffering, or if you find that you've got a loved one, somebody you care about that's in that place, they could blame something. They could blame somebody else. They could blame the government, they could blame the politicians, they could blame themselves. And ultimately is that a productive choice? Is it something that will help? Probably not. So option number two then, would be to change your life, to change the life conditions back to that formula, that LC life condition. There may be things that you can control. There may be things that you can do. 

For example, let's say that somebody's area of unhappiness is their finances. Now I'm a financial advisor, right? A financial planner, a wealth manager, whatever you want to call me. But in the end, our job is about walking with people and helping with their financial decisions, helping to guide them on the way. It's never our job to make people's decisions for them. By the way, that should not be the job of any financial advisor. A good advisor is one that will provide clarity, will provide optics, will really seek to understand the person's situation and help them to use all the tools and resources and everything that are out there. We offer guidance, but in the end people get to make their own decisions. So option number two would
be to change your life. If finance is the area, there are some things that a person can change. For example, let's say somebody feels like, “Gosh, you know, I'm in debt and I don't have enough money to pay the bills. And I don't have anything saved for retirement; I'm way behind.” I've worked with people that are in that spot. It's really starting from square one, or maybe they feel like a negative square. So are there things that they could do well? Yes. There are always areas that we can have some impact over.

Maybe it's changing a job. Maybe it's going back to school. Maybe it's taking a look at the budget. Budgets might not be the most fun thing to do. But the reality is that we all probably spend more money than we would need to spend to survive. And we probably have some loose areas of our budget where we could come up with some money if we needed to. We could get serious about starting to tackle things like building up an emergency fund, paying off debt, starting to get some money going into retirement funds. Not to say that all those things have to happen at once. But in a lot of cases, there are things that people can change.
Sometimes that means big changes such as selling a home. Sometimes that means changing jobs, changing careers, even changing locations when people move to a different area of the country for a job or a lower cost of living that can lower expenses. Lately, we've been seeing a lot of people moving out of high expense places like New York and California and moving to less expensive areas of the country, because that can be an immediate upgrade for people's cashflow. If they're able to keep their income the same and get their expenses lower, that automatically is going to loosen things up. 

So change is possible when it comes to making decisions like that. However, using COVID as an example, there are some things that we just can't change. We can't change
the government. We can vote, you know, we can call our politicians, things like that. I’m not saying we don't have any influence, but ultimately, we may not have the ability to directly change anything. And COVID is a thing where we are in the middle of a pandemic due to an extremely contagious virus that can be unpredictably deadly. This is something that certainly has affected all of our lives. It affects every person on the planet to some degree, no matter who you are, no matter what country you're in.

Option number three then, is changing your blueprint and how you look at things. In other words, the story in your own head. We can take a look inside our own heads at how we believe life is supposed to be. We can take a look at what our emotional reaction is to life events and things that are happening. It's possible we need to change the blueprint. When we can't change our life conditions, when we don't
have any control or very little control over some force outside of ourselves, then maybe it's time to change the blueprint—change the story that we're telling ourselves inside our head about what's going on.

Again, let's use COVID as an example. I get the honor to have hundreds of conversations per year with different clients about their lives and what's going on. And I can tell you that by and large people have taken this pretty well and looked for opportunities to be grateful for what they do have and for what could be great about this. I talked about this on the podcast recently, as far as asking whether we need to take some time and think about what are the blessings of COVID, what are blessings in what's happened this past year? For my own self there've been many. And of course there've been negatives too. We could always focus on what's wrong, but we can focus on what’s right, too. Doing so is about changing our blueprint, changing the rules in our own head for what needs to happen. For us to feel happy, we have the ability to do that at any time.

There are some extreme examples historically. For example, in concentration camps people have suffered immensely and still, ultimately some decided that there was a choice about where to put their focus. I’ve read Man's Search for Meaning by Viktor Frankl. In that book, he tells the story of his experience as a prisoner in a Nazi concentration camp. He was a psychiatrist, and he made a practice of believing in his own mind that he was getting out of there. He believed that he was going to get out and he was going to use what he learned. He was very observant and noticed the interactions with the guards and how different people reacted. Again, horrible, horrible circumstances that these people suffered through in the concentration camps back in World War II. These are some of the most extreme examples. Viktor Frankl said that even though all their freedoms had been taken away and, in many cases, people were dying, they still had a choice of how to react. Their family members were being taken away and being killed in horrific ways, but they still had the ability to control their own emotional reaction to things and their own focus on what that meant to them emotionally. They could focus on the future.

We can all be in a suffering place. We can all stay there for a little bit, but the two real choices are changing our life conditions, making some different decisions about what action to take. And if there aren't a lot of choices in the domain of action, then it's time to change the blueprint. As far as the personal finance blueprint goes, maybe take a look at the rules in our own heads about what it takes to make us happy. I've had clients that have a magic number in their head preparing for retirement. It’s this round number in their mind, could be various amounts, a million, 2 million, 5 million, whatever it is, and they believe they have to hit that number for their net worth before they retire, or they won’t be happy and won’t feel secure.
Well, it's okay to have a goal, right? I think it's important to have a goal and take a look at what it is that motivates us, but in the end for these people, we do the math and figure out what it is that they’re spending and so forth. In a lot of cases, that “magic” number in their mind is just a number. We figure out the income requirements and things the person really needs and often they may not actually need as much as they believe they will. Of course, in some circumstances they have underestimated and they will need more. But in a lot of cases, people don't realize how far their money can go if it's properly planned. So that's where financial planning comes in. I believe it's important that we take a look at our lives and realize that life is happening for us. It's not against us. And we can harness our own emotions to create better outcomes. Using these clients who have a magic number in mind as examples, maybe it's time to change the blueprint, especially if that big round dollar amount is too far out there. Maybe somebody has to work to 75 to reach that number, and they don't want to work till 75, but we figured out they can retire earlier. 

Or maybe it means living on a lower dollar amount for income and we just need to get rid of that big round number in our heads. And in the end, you know, when we break through something, even when it's something really tough, that's
where we can all be excited about 2021 and going forward. We can say, “Hey, we made it through this nasty pandemic, this kind of once in a couple of generations pandemic.” And when you get through something really tough, then the good thing is you're not scared anymore. You got through it. I’ve got a story here. For years and years and years, I was so scared as a kid, so scared of bees. Scared of getting stung! And then finally, as a young adult, I got stung by a bee and realized that wasn't the end of the world. It wasn't as bad as I’d thought. I'm really not afraid of getting stung anymore because I experienced it. Okay, it was a minor thing, right, compared to a lot of the things that people are dealing with in their lives. But when you go through something tough, you can end up a lot stronger on the other end and hopefully not just for yourself, but for other people that you're able to help.

I hope you have a wonderful week. I hope that everything we've talked about today is helpful for you. Please pass this on to any family members or friends or coworkers, anybody that it would serve. The goal here is to make people's lives better. And to use the experience of other people that have walked before us. In this case, everything we've talked about today came from Tony Robbins. Tony Robbins would say, all this stuff came from other people before him. So God bless. Enjoy your families. Enjoy the Christmas season. Take care.