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Asset #2: Your Personal Resources

When talking about happiness, Aristotle used the Greek word eudaimonia -which doesn't refer to the upbeat outlook we moderns associate with being happy, but rather to the life well-lived: the inner satisfaction you gain when you live up to your strengths and make the most of your talents. Today the field of positive psychology has generated numerous studies about the immense benefit of being engaged in activities that stretch the envelope of who you are-and that by being more active and positive in your approach to your own life and goals, it is possible to up your happiness quotient. Investing in yourself is what chapter 4 is all about.

Asset #3: Your Health

Most people think of good health as a positive thing on its own. Investing in your health as a means of increasing your total well- being is still a relatively new idea, even though science supports the rather obvious conclusion that healthier people are happier. Chapter 6 shows how small but steady investments in your physical plant are key to the overall performance of your portfolio. (Besides, shoring up your physical well-being will save you money in the long run-dividends that you can use to further invest in your quality of life as well.)

Asset #4: Financial Control

For many people, worrying about money has become a way of life-and scientists are now connecting persistent financial angst with serious mental and physical ailments. Small wonder that learning better money management skills in order to invest in your own ongoing financial sanity is so important. In chapters 3, 7, 8, and 9, I'll show you how to ditch bad money habits, vanquish debt, buy yourself greater peace of mind-and take control of your future. If you feel euphoric at the very thought of a stress-free, well-ordered financial life-you know what a vital part of your happiness portfolio this will be.

Asset #5: Mutual Fun

You don't need me to sell you on the importance of developing a strong fun strategy. (And you don't need to see The Shining to know that "all work and no play" really doesn't work out well for anyone in the end.) In chapter 10 we'll tackle the all-important fun sector and the countless ways it can boost your portfolio's overall performance. I'll also reveal the groundbreaking results of my Highly Unscientific National Fun Survey.

Asset #6: Get Into Bonds

Scientists squabble about whether happier people tend to have more active social lives-or whether having vibrant connections to others makes you happier. It's possible to see the issue either way, but one thing seems indisputable: We are people who need people, as the schmaltzy old song goes. The correlation between having friends, being part of a community and/or close to your family, and being happy is a strong one. The data on the long-term benefits of marriage are also striking.

That doesn't mean you have to win a popularity contest or leap into a romantic relationship to be happier. But investing more in the people who are most important to you is essential to having a life that's fulfilling. More on that in chapter 11.

Asset #7: Giving To Feel Good

Donating your time and money to help others is always presented as the "right" thing to do. The fact that it makes you feel good, too, has been largely ignored as a minor fringe benefit. Now researchers are finding that the act of giving bestows numerous gifts on the giver as well: It supports and strengthens social bonds, enriches your life, enhances your health, and even boosts longevity. It's like discovering that eating a can of spinach really will turn you into a hero, although I promise chapter 12 makes no mention of eating your vegetables.

Investor's Choice

So does this mean you must invest in this little lineup of so-called happiness stocks or risk a life of low returns? Nope. These are just some of the areas that researchers have found that contribute to personal satisfaction and quality of life. Only you can decide how you want to invest this portfolio of yours. In the financial world, people use different methods to determine their asset allocation-and the same seems to be true of well-being: How you choose to allocate your assets will be based on numerous factors in your own life.

In early 2006, I attended a symposium on Economics and Happiness at the University of Southern California. There I met Mariano Rojas, an economist at the Universidad de las Americas in Puebla, Mexico, whose research supports the idea that happiness is a mix, you might say, of different stocks.

Rojas surveyed 579 people in five districts in Mexico about their overall well-being, and then asked how satisfied they were in various areas of life-work and career, family and community, health, and so on. Like many economists, he found that some arenas have a greater impact on people's contentment with life-for example, a rewarding family life was a key ingredient in overall life satisfaction, whereas work tended not to have as big an impact. But Rojas also found that it's possible to increase your individual happiness by investing more in the areas that will have the most impact for you- and less in those that don't. "Hence a person who is very unsatisfied in her family domain and satisfied in her economic domains may benefit the most from an increase in family rather than [increasing] economic satisfaction," Rojas writes.

His point isn't that we all need to invest in the same things, but rather that the way people choose to invest in their happiness is "contingent on a person's own circumstances." If you're in good health and have a happy home life, you don't need to invest more in those domains. Rather, like any savvy investor, you're better off paying more attention to the sectors of your portfolio that aren't delivering the returns you'd like to see. Perhaps you need to have more fun, to reduce stress, spend more time with friends, or find more time for yourself.

The essential thing to remember as you go through this book is that "joy" and "satisfaction" and "happiness" aren't just pleasant, abstract notions; investing in a happier way of life requires making new decisions about how you spend your money and time.

For years, Wendy and Peter didn't think they could afford anything but the lifestyle they had. They were both working full-time jobs in a big West Coast city. Peter commuted an hour to and from work. They earned quite a good living, but that was paling beside the escalating levels of stress in their lives. "We were emotionally, mentally, and physically depleted-and I had all kinds of health issues that were made worse by the way we were living," Wendy says. "Peter was exhausted by driving an hour each way. He would come home at 7:30, our daughter went to bed at 8:00, and that was his day."

Like many people, for years the two struggled to figure a way out of all these demands. Maybe Wendy could quit her job or work part-time; maybe they could live on less. But as we all know, it's hard to make a change when the treadmill of life just keeps moving forward, pulling you with it. Then, Peter was offered a job in another city- and that became the catalyst they both needed to invest in a new way of life.

Peter now had a ten-minute commute to his job. Wendy wasn't sure what would happen when she left her job-but it turned out that her managers were willing to make it work long- distance. So what she feared might be a flying leap into unemployment turned out to be a gentle step into telecommuting-but at a reduced salary. "I started working twenty-four hours a week and took a huge pay cut," she says, "but it's been worth every penny."

Did she and her husband have to cut back, watch what they spent, become more careful with money? Sure, but not nearly as much as they'd feared. Even though they now were making less, it turned out that with more time to devote to their newly sane life, the two were better money managers. "We didn't have the energy before," Wendy admits.

Copyright © 2007 by MP Dunleavey

Tags: Personal Finance, Happiness

About the Author

MP Dunleavey is a personal finance columnist for the New York Times and creator of the popular "Women in Red" series for the MSN Money Web site. She lives in upstate New York with her husband, son, two cats, and more house repairs than she bargained for. But is she happy? You bet.