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HOW CAN WE GET greater satisfaction from our life—and what role does money play? Below is an edited excerpt from A Wealth of Well-Being, published this month by Wiley.
I often note that the biggest risks in life aren’t found in the stock market. If you want real risk, I say, get married. And if you want more risk, have children.
People laugh. The point is obvious. Yet that point is regularly lost when we speak about financial well-being, and the result is we end up neglecting our life well-being. I was motivated to write my book, A Wealth of Well-Being, by reflecting on my own financial and life well-being, as well as those of others.
Financial well-being comes when we can meet current and future financial obligations, absorb financial setbacks, and keep driving toward financial goals, such as adequate retirement income. Life well-being comes when we lead satisfying lives, full of meaning and purpose. We need financial well-being to enjoy life well-being, but it is life well-being that we seek.
I was born to Holocaust survivors in 1947 in a displaced persons’ camp in Germany. We came to Israel in 1949. Navah, my wife, and I were students at the Hebrew University of Jerusalem when we were married in 1969.
Our parents sought to enhance our financial and life well-being, and their own life well-being, at the cost of some of their financial well-being. A few months before our wedding, my parents traveled to meet Navah’s. After dinner, Navah and I were excused to go for a walk, and our parents set down to business. Business meant deciding how much each set of parents would contribute to support the young couple, helping with a down payment on an apartment.
My parents were far from wealthy, and Navah’s parents had even less. But as I learned later, Navah’s mother said to her father, “Whatever Meir’s parents offer, we will match.” They borrowed some of the money from relatives and repaid it later.
I graduated from the Hebrew University with a BA in economics and statistics, and an MBA, and got a job as a financial analyst at a large government-owned company. The job enhanced my financial well-being. Indeed, I could have worked there for many decades and retired with an adequate pension. Yet the job diminished my life well-being. As I would say later, projects lasted longer than my interest in them.
One morning I got up, called work to say that I would not be in, and Navah and I traveled to Jerusalem, where I remembered a library that had a catalog of American PhD programs. It also had a catalog of scholarships available to foreign students. One institution wrote back to say that they couldn’t tell from my name whether I was a man or a woman, but I should know that this is an endowment of a sorority, awarding scholarships only to women. I had better luck elsewhere. Meanwhile, in time, Navah also applied and received a scholarship that paid most of the tuition for her master’s program.
Parents properly consider their own financial and life well-being, and those of all their children, as they respond to their children’s requests for support. Navah and I had sufficient means to live as students when we arrived in New York to study at Columbia University. But during the application period, I grew concerned that we would have to forgo our plans because we wouldn’t have sufficient means. I asked my father for a loan.
“I wish I could lend you money,” said my father. “But you have a younger brother and sister, and they would also need support when they are married. I do not have financial means beyond that.”
Life well-being has many domains, including those of family, friends, health, work, education, religion and society. Few are fortunate enough to enjoy life well-being in all domains, free of the injuries of poverty, disabled children, difficult marriages or serious illnesses. Life well-being calls for applying well-being medicine from one part of a domain to heal well-being injuries in another, and from one domain to others. And life well-being calls on all of us to apply well-being medicine in empathy and help to the well-being injuries of others.
Our family isn’t among the few who enjoy life well-being in all its domains. Barbara, our older daughter, lives with bipolar illness. Her illness was not diagnosed for years, during which we were told that her difficulties stem from family dynamics. It seemed that the only question yet to be answered was whether blame lay with Navah or with me. We let our anguish seep into our marriage, diminishing our life well-being in that domain, beyond the domain of parents and children.
Some well-being injuries are more difficult to disclose than others, inhibiting empathy and help. I recall envying a colleague who received much empathy for having to make two mortgage payments each month, as he bought a new house before selling his old one. Yet I felt constrained from receiving empathy by disclosing Barbara’s difficulties, along with those of Navah and me.
We enjoy greater life well-being now, as Barbara’s situation is stable. She says “I love you” at the end of every conversation. Navah continues to enhance the life well-being of many people living with mental illness and their families as a volunteer at the National Alliance on Mental Illness. We’re fortunate to have an ample finances domain, able to support Barbara without constraining our budget, and we are even more fortunate in the family domain as Ruth—Barbara’s younger sister—loves and supports her.
I no longer feel constrained from disclosing our family’s injury. I recently disclosed that injury to a colleague. He responded by telling me about his daughter, who suffered a traumatic brain injury several years ago. Now, he said, his life and that of his family revolve around supporting their daughter. We empathized and comforted each other, and turned from colleagues into friends.
I see the need to explore life well-being and enhance it in my own experiences, in the experiences of people I know or read about, and in the experiences of financial advisors and their clients.
Some years ago, an advisor I know called to ask for advice. His young son had just experienced a psychotic break. He and his wife were shocked and bewildered. I invited them to our home for a conversation with Navah and me. We described our identical shock and bewilderment years before, offered our empathy and help, and shared with them what we’ve learned from our experiences and those of others.
This advisor now cares for many clients living with mental illness, as well as their families. Some people living with bipolar illness may spend recklessly when in manic states. The advisor described a client admitted for psychiatric care who requested that the custodian overseeing his funds remove his financial advisor, so he could withdraw a large sum of money. When his manic state subsided, the client was surprised at what he’d done, and reinstated the advisor. Concerned about a recurrence, the client has designated a trusted person to evaluate his requests before proceeding.
I teach investment courses in our graduate programs. I teach the usual content of such courses, including portfolio theory, asset pricing theory and market efficiency. But I also help my students explore links between financial well-being and life well-being. My students share their stories of saving, spending, investing, financial well-being and life well-being with one another and with me, and I share my stories with them. In the process, I enhance both my students’ life well-being and my own.
One assignment presents an alphabetical list of 10 wants answering the question, “Why is wealth important to you?” The possible answers include “buying the things I really want,” “educating my children,” “helping the less fortunate” and “providing financial security.” I ask my students to rank the wants by their importance to them and explain their rankings. I also ask them to comment on the postings of classmates.
One wrote: “Providing financial security is right at the top of my list. It’s not just about me; it’s about my family’s journey and their struggles after the Vietnam War.”
Another wrote: “Am I too selfish or unethical if I place helping the less fortunate as the last thing that I prioritize in life?”
And yet another wrote: “Fourteen years ago, prior to the birth of my son, I would have put buying things for myself as my main goal. Now, my mind is centered on my son.”
In my book, I share what I’ve learned about financial well-being and life well-being. I hope that my words will help readers reflect on their financial well-being and life well-being, and enhance them.
Meir Statman is a finance professor at Santa Clara University and a leading expert on behavioral finance. In addition to A Wealth of Well-Being, his books include Finance for Normal People and What Investors Really Want. Meir’s previous article for HumbleDollar was Retire Those Fears.
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Very thoughtful article. I don’t have the life experiences you had, but after reading this, it is clear I need to make some changes in the way I look at life’s ups and downs.
Sundar Mohan
Meir: For a reason I can’t explain, I have “wet eyes” after reading your article. I am not sure if it was the story of you and your wife making college in America decisions, your father’s comments about borrowing money, or your daughter’s mental illness and your family response.
What ever it was, it moved me.
I hope your daughter continues to thrive and I wish you continued success in your academic career and writing endeavors.
I retired in January of this year, after 15 years as a professor of Financial Planning and Retirement Planning. My prior writings consisted of textbooks and professional articles. As I read articles like yours and others here on Humble Dollar, I am beginning to get the urge to write other things, hopefully more meaningful things, and moving things like you have.
Just listened to you this morning on the Long View podcast.
Beautiful contribution, Meir. Thank you and I hope you are having a happy and peaceful Pesach.
Your family providing money reminded me that Warren Buffett’s daughter asked him for a loan once for a $30,000 remodeling project. He turned her down. Conversely, my father offered me $25,000 once when I was buying a house and I turned him down. I stubbornly wanted to do it on my own.
Buffett has also talked about how important the person you marry is to your life (in general and financially). People who are happily married tend to take that for granted. Talk to someone who is divorced to get a better perspective. As someone once quipped, they weren’t going to get married again, they just wanted to find someone they didn’t like and give them half their stuff (and money).
Similar for me. In 1978, my in-laws visited our first home – a cramped, old home that was “new” to us. I guess they thought we had taken on too much. They offered us monthly money that we turned them down. We needed to know we could do it on our own.
Sorry to read that your daughter’s bipolar disorder led to unnecessary blame and resultant marital problems (“…we were told that her difficulties stem from family dynamics”). Mainstream psychiatry and genetics research is clearly pointing to genetics as the primary cause of the illness.
Hi, this is Chris. Good and thoughtful article, thank you. I like the perspective you bring to HD, writing about money and wellness. They definitely are related. When I was reading your article, I thought about our recent visit to see relatives. It was full of examples of this. From a relative who just bought a big, new house at an advanced age, to a family member trying to navigate a serious illness, to the “mean girls” at a family members assisted living facility, to a conversation between my spouse and in law about retirement and how my sister and I are afraid to be destitute (irrational), and where that comes from. Lots to think about.