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Happiness and financial behaviour

Martin Seligman’s book “Authentic Happiness” talks about how happy people are more likely to have more casual and close friends, are more likely to be married and are more involved in group activities.

From an evolutionary standpoint, it’s easy to see that natural selection favours happy people, because happy people would presumably make better life decisions.

But can happiness impact returns on investment? Shawn Anchor, author of “The Happiness Advantage” spent 10 years researching the impact of happiness on company profits. He found that when companies invest in a culture of happiness, sales increase by 37% and productivity by 31%. Focusing on our own happiness as investors can alter our financial behaviour as well.

Happiness and financial behaviour

Discipline in investing: Buddhists believe that we acquire the things we do in order to make ourselves happy. If we’re already happy, the fluctuation of our investment portfolio isn’t the cause of our anxiety or joy.

Long-term focus: It’s also possible that happy people are more optimistic about the future and are more future-focused than unhappy people, which increases their focus on the long-term.

Higher return on investments: Research has found that happy people spend more time making decisions, which increases their chances of making informed investment decisions, leading to a higher return on investment.

Increased investor confidence: Research shows that happy people expect lower inflation in the future. This implies that they see less economic risk in the future, which increases investor confidence. An increase in investor confidence increases investments in the country, which in turn increases GDP.

Be happy!

Meditate: The University of Wisconsin-Madison conducted an experiment on meditation, where they taught students how to meditate during a seven-hour workshop and then had these same students meditate an hour a day for two months. They also had a control group that didn’t participate in meditation at all. At the end of the two months the researchers found that students who meditated had an increase in left frontal brain activity and were less anxious. These students also had higher immune function than students that didn’t meditate.

Be altruistic: Almost all religions say that to become happy you should start helping others and focusing on giving back to society.

Form close and healthy relationships: The emphasis in this case is on healthy relationships. Surrounding yourself with happy and healthy people increases your chances of picking up on their thinking patterns and their perception of the world.

Follow your bliss: When you do what you love and follow your heart, you increase your chances of being happy.

Source: http://www.propertytribe.co.za/index.php/have-a-happy-home/1928/

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