How to Create an Investment Strategy That Prioritizes Your Happiness

An investment should be thought of as a means to an end. At its basic level, an investment is there to provide money to support the lifestyle you want.

But just determining a dollar amount isn’t enough for each of your investments. Something you also want to consider when planning out your investment strategy is how it will affect your happiness. You will need to figure out what gives you the most satisfaction and fulfillment in life and assess your investments accordingly.

Do your investments give you the income you need for your goals? Does their volatility stress you out? Do they require more of your time than you’d like? All these factors are crucial when making sure your investments will enable additional happiness for you, rather than detract from it.

Determine the Purpose of Your Investments

It’s sometimes easy to get wrapped up in accumulating wealth without considering an end goal or purpose. Happiness can oftentimes be accomplished through the process of working toward and completing goals. But if your general investment drive is just “more, more, more,” it’s hard to achieve the satisfaction you seek. Also, a “must have more” thought process can lead to shortsightedness and lack of precision in your methods, whether you’re just starting out or checking progress.

So what is that money supposed to do for you? Maybe you want financial peace of mind in case of an economic downturn. In that case, determine how much you want your investment income to be determined at any given point in your life. If you steadily meet those goals, you might be able to stress less about never having enough.

If lifestyle flexibility is your main concern, investments that create passive income are a solid choice. Other investments may yield greater wealth but could potentially tie you down with regard to both time and location.

However you proceed with your investments, regularly assess whether or not they’re serving your current and future happiness. Your priorities 10 years ago might not align with your current values, and a strategy shift might be in order.

Invest in Time, Not Just Wealth

There are many who say that time is a far more valuable asset than wealth. After all, time is something that you cannot get back once it’s gone. So when you’re planning each investment, make sure it serves to support your time rather than absorbing a large part of it.

Providing for your family and supporting their needs is a balancing act. On the one hand, it’s tempting to spend all your time building a business to ensure your loved ones have the things they need. But if your investments are too time-intensive, your freedom of time is severely restricted and you’ll be spending less time with the very people you are providing for.

“The point of making money is to spend it with the people you love. Sadly, many entrepreneurs sacrifice their freedom to attain financial success, preventing them from spending time with those who matter most to them,” says Justin Donald in regards to Lifestyle Investing.

Donald cautions investors and entrepreneurs against being so wrapped up in providing that they overlook the value of being present. “When people fall into this trap, they will say they’re ‘doing it for their family,’ but sadly, the family is the one who always suffers.”

Consider whether your investments allow both sufficient income and the freedom of time to spend with those who matter the most to you. As you enter retirement, which are you likely to regret more? Not making an extra $1 million for your kids to inherit or being absent for family milestones?

Diversify for Peace of Mind

Another component of happiness is security. Having a wide array of investments typically means that if one type crashes, others will rise or at least remain stable.

For example, putting every free cent into the stock market is extremely risky but could potentially pay off. If you go that route, you will likely be keeping an eagle eye on your stocks and stressing about their performance. It’s different if those stocks are just one component of a portfolio that also includes real estate, bonds, and gas royalties. You have a bit more support against the market in that situation and don’t need to worry as much about individual asset performance.

That’s not to say that if you have a diverse portfolio you can just set it and forget it. You’ll still want to check in from time to time on how each investment type is performing and discuss it with your financial advisor. You can even experience unnecessary stress and unhappiness from a diversified portfolio if you’re not confident in your choices.

Investments should ideally provide confidence in your ability to provide for yourself now or in the future. Being overly aggressive or risky in your selections can erode confidence and create stress that investments are supposed to relieve.

Not One-Size-Fits-All

Investment strategies, just like people, can be complicated. Also like people, investments will likely change over time, whether due to economic shifts or adjustments in your own long-term goals.

Investments should provide for and allow for personal happiness. So when creating or updating your investment strategy, look at it as life-building more so than wealth-building. Once you do that, you might see changes that pay off in the long run in ways far beyond dollar