A favorite parable of mine is the story of a poor farmer who owned a horse. One day the horse broke free and galloped away. All of his neighbors witnessed the calamity and rushed to his side to sympathize with him for this misfortune. He simply responded with a shrug and said, “Maybe yes. Maybe no.” That story illustrates just one of the valuable points made in the book The Geometry of Wealth – How to shape a life of money and meaning by author and investment educator Brian Portnoy, Ph.D. While most of us are familiar with the assertion that beyond a base level, money doesn’t make a person happier, Portnoy offers a more thorough perspective. At the same time, he reminds us that there are usually at least two sides to every situation. And it appears that money may be exactly the same.
So, what was it about that horse that may or may not have been lucky? A day or two after the horse ran away, the horse returned bringing an entire herd of horses along with him. Now the neighbors came to congratulate the man for his new good fortune. Again the man responded by saying, “Maybe yes. Maybe no.” A day or two later, when attempting to tame one of the wild horses, the man’s son fell and broke his leg. Now the neighbors all shook their heads and frowned while telling the man how unlucky things had turned out to be. The man simply replied, “Maybe yes. Maybe no.”
A week later the military rode into town to draft all of the young men into fighting a faraway war. But because the owner’s son had a broken leg, he was not eligible and remained at home. Now the villagers heaped congratulations and praise on the man for being extremely lucky. And once again, all the man said in return was, “Maybe yes. Maybe no.” The lesson of course is that it takes a long view and wisdom to realize that every circumstance carries repercussions and that nothing is solely bad or good—including money.
As an investment educator Portnoy claims that in all of his lectures and workshops a primary question regarding finances always comes up. That question is, “Am I going to be okay?” Like it or not, money is a huge factor in all of our lives, and how we relate to it and what it means to us is one of the fundamental questions that affect our wellbeing and happiness. In other words, it is impossible to talk about happiness without having a sense that we will be “okay” and have the resources to live the life we feel called to live.
A key, of course, is recognizing that rich doesn’t mean the same as wealthy. According to Portnoy, rich is a push for more on “a treadmill on which satisfaction is typically fleeting.” Instead, “Wealth, by contrast, is funded contentment. It is the ability to underwrite a meaningful life—however one chooses to define that.” Going a bit further, Portnoy asserts that, “Wealth, truly defined, is only achievable in the context of a life in which purpose and practice are thoughtfully calibrated.” What that means to me is that unless we are practicing what we feel called to be, do and create in this world, all the money in the world will not make us happy.
Unfortunately, although money is an incredibly integrated part of our lives and wellbeing, most of us will do just about anything rather than talk about it. A study quoted by Portnoy states that “73% of Americans say that money is the most stressful factor in life.” Yes, more stressful that death, politics and religion. Yet unless we are willing to spend the time to explore what our “money lives” means to us and how it all plays out, most of us are either in deep denial or stuck in destructive patterns.
A critical factor in achieving funded contentment is both planning and recognizing at the same time that adaptability and change are always part of the equation. Calling it “adaptive simplicity, “ Portnoy quotes author Timothy Wilson who says, “those who fare better in life have better coping strategies in the face of adversity—they confront rather than avoid them, plan better for the future, focus on what they can control and change, and persist when they encounter obstacles instead of giving up.”
Then what is it about money that can make us happier, or not? Portnoy teaches that we must first identify what matters most to us because only then can set our intentions towards creating a joyful life where money fits in. Behind this thinking are four key areas Portnoy believes we must first recognize and plan to include. He calls them the “Four C’s”:
- Connection is the need to belong.
- Control is the need to direct one’s destiny.
- Competence is the need to be good at something worthwhile.
- Context is the need for a purpose outside of one’s self.
I think most of us who study happiness are well aware of the recent research that proves that happiness does not increase beyond a certain income level. That news is a reminder that the pursuit of more, more, more is not what really matters to us on a deep soul level. Owning a bunch of stuff or having a bigger bank account is a treadmill that can never be turned off. Portnoy suggests that what we really crave are his four C’s.
On the flip side, I doubt any of us would deny that money alleviates poverty and the corresponding pain that it brings on all levels of experience. Portnoy goes further by pointing out that in many cases, money is actually better at diminishing sadness than increasing joy. In addition, one of the more interesting points and usually not one that is part of the discussion is that money does increase a certain type of reflective happiness—and it is the awareness, understanding, and balance of all types of happiness that leads to funded contentment.
So again, can money buy happiness? Maybe yes. Maybe no. Or maybe it depends. Of course, the type of happiness that Portnoy refers to is Eudaimonia—or joy, not the fleeting experience of pleasure or pain. What does more money offer us? Primarily it allows us to live more of the four C’s—which in turn allows us to underwrite a meaningful life with experiences like:
- Funding quality experiences that deepen our connections to others.
- Doing things that bring us joy rather than “having” things that quickly lose their importance in our lives.
- Allows us to be generous to others and share our gifts which in turn brings us joy.
- Gives us more time to pursue the things that give our lives meaning and purpose.
But that isn’t the end of the story. How then do we get to funded contentment without selling our soul in the pursuit of the money to do that? Portnoy is clearly a strategist and offers a number of practical tools to arrive at ways to achieve the adaptive simplicity he recommends in terms of finances and investments. He believes that “Self -awareness and self-control” are key principles needed along the way. Portnoy suggests that the amount of money we make and have is not what’s most important. Instead he says, “The issue is calibration: Have you synced your scorecard with the life you want to lead? If so, you are wealthy.”
Even though I was offered this book for free in return for an honest review, I typically avoid most financial planning books. However, I found most of Portnoy’s advice interesting, accessible and relevant to a SMART Life. I did skip one chapter entirely when it bogged down in far more detail than held my interest, but I fully appreciated his messages about money, investments, and happiness that I found throughout the book.
Many of us avoid the topic of money. We end up doing what we’ve always done or just stay busy with what requires attention right in front of us. Yet always lurking in the background is that question, “Will I be okay?” The SMART approach is to always inform ourselves and do our best to stay as aware, engaged and as responsible as possible with those things we can adjust, refine and even rightsize. As always, each of us has the choice to either create our lives by design—or take what we get by default. Our money lives are no exception.
Okay, your turn. Have you managed to reach that sweet-spot of funded contentment in your life? If yes, please share some of the things you do that help you maintain it. If not, why not? If you have a few clues about why it hasn’t been working, maybe sharing them will help us all get clear about ways we can improve. Please share any thoughts you have on those questions or this post in the comments below….
Dr Sock says
Throughout most of my adulthood, I lived quite frugally, at times by necessity (e.g., when I was single parent of young children). Although amassing weath was never of great importance to me, I was careful with my money and I educated myself about financial management and investing. When opportunities for promotion came up at work, I pursued them. But I never really aspired to more than a modest lifestyle.
Therefore, I am surprised to find that through being careful with my money, I was able to retire at 60, purchase a comfortable retirement home in a beautiful area, and still have enough of an annual income to be able to do some travel, help out my adult kids, and so forth. It was not a goal I was aiming for, but somehow I got here anyways.
Kathy, this was a phenomenal review!
I’ve seen this book advertised and reviewed before, but not until now have I been convinced I should read it. I’m highly wary of taking life advice from members of the finadv industrial complex. They’re as likely to be misguided as anyone else, and these days tend to fall into anti-materialistic binaries that I think the author calls (based on my google books search) “experienced happiness”, which is all the rage these days. On this view, blowing 20k on a family vacation would probably be a good investment, whereas blowing it on a new car is probably a bad one. I’m highly doubtful it’s that simple and binary, and I don’t think it’s eudaemonia that is being promoted.
But your trenchant review and some searches of my own show Portnoy has a subtle grasp of the concept of eudaemonia and now I can see it’s a must read. Thank you!
Kathy Gottberg says
Hi Mark! Thanks for stopping by SMART Living and sharing your thoughts on this post. I too was a bit wary but found myself pleasantly surprised by Portnoy’s approach to the topic. While I doubt he can escape his biases in some regards, he is pretty clear that wealth is much different than just a large bank account. And he was actually the first author I’ve read to explain why “experienced happiness” isn’t always better than more material purchases. Nothing is ever so clear cut is it? He fleshes out the idea by breaking happiness into two categories called Experienced Happiness (the one you refer to in your comment) and what he calls “Reflective Happiness” which is more in alignment with eudaemonia. His reflective happiness refers to the judgments and feelings that we have about our own wellbeing which he claims is tied to Cantril’s Self Anchoring Scale. From that perspective, money does not top out at a certain amount because of the benefits that it brings to a person’s sense of accomplishment and wellbeing. And while he does spend some time explaining his favored investment strategy, I even liked some of his “tactics” because it was presented in a way that made me think in new ways about a rather dull subject (IMHO!) If it still sounds interesting I would encourage you to give it a try. ~Kathy
Brian Portnoy says
Kathy – I’m blown away by the generosity of your review and so many wonderful reader comments. Thank you so much for taking the time to read the book and introducing it to your wonderful community. Please let me know if I can be helpful in any other ways.
Kathy Gottberg says
Hi Brian! Thank you so much for taking the time to come by and let me know you liked my review. As I said, I enjoyed your perspective very much and knew that my readers would likely be the same. If you are still checking back on these comments I would invite anyone who is interested to “reply” a comment to you if they have any specific questions. Otherwise, if the topic is of interest, I recommend your book and hope that others will take the time to read it as well. Obviously, there is much more in the book than what I wrote about in my brief review. ~Kathy
Mary ~ Reflections Around the Campfire says
I grew up in a solidly blue collar, middle class family. My parents made smart financial choices (such as buying a duplex when they got married so that the rent would pay the mortgage) and many personal sacrifices (like settling for well used cars that my Dad could fix up) so that our Mom could stay home with my brother and me which was important to them. Along the way, I learned that money is a nothing more than a tool and a resource that, to me, represents security and freedom. I believe that it was due to this attitude which my husband (thankfully) shares that we’ve been able to live happily and contentedly throughout our married lives.
We talk “money” with our kids a lot, not because it is worshiped like some type of god, but because it’s a useful tool that, if managed properly, provides options and opportunities that can lead toward the achievement of life’s goals and dreams. It seems to me that if you have the financial resources (and the dollar amount itself is not important) to work toward and achieve your goals, then happiness and satisfaction will follow.
Kathy Gottberg says
Hi Mary! Thank you so much for sharing some of your personal “money life” with all of us. And how great that you and your husband are on the same page about money. When we first got together Thom LOVED to just go out and buy whatever he wanted whenever he wanted and that lead to a few clashes with my more frugal nature. But through the years we have shifted to know that having freedom, choices and possibilities were far more important to us than satisfying immediate desires or having a lot of stuff and more obvious signs of wealth in our lives. And good for you for teaching your children that although money has a big place in our lives, it is NOT what is most important. I love your statement, “It seems to me that if you have the financial resources (and the dollar amount itself is not important) to work toward and achieve your goals, then happiness and satisfaction will follow.” That points to the “funded contentment” that Portnoy talks about in the book. ~Kathy
Terri Webster Schrandt says
Great review of the book, Kathy! I think we all have a “love-hate” relationship with money. My family had just enough to live on (the days when moms stayed home), which helped me get financial aid in college. We always had enough to take wonderful road/camping trips to California National Parks. Local areas in SoCal were the places we enjoyed leisure at little costs other than gas (and you know how cheap it was in the 70s). As we pay off our debts heading toward right-sized retirement, Hans bought his dream truck to pull our new-to-us trailer. He was nervous after not having car payments since 2005, but he feels it is worth it. Got a good deal and he know his way around the mechanics as it ages. I think the more $$ we have, the more we will spend anyway, the key is finding equilibrium. Saw you were having some good times with Donna!
Kathy Gottberg says
Hi Terri! We missed you and our mini-blogger-meetup Terri. Maybe next time? And thanks for adding your version of your money life. I think as we’ve talked about before that you and Hans seem to have arrived at a place where you have rightsized your finances. And that doesn’t always mean debt free. What it means is managing a balance so that you are doing what you can to feel safe and yet free at the same time. Good for you! And good luck to us all to do the same time! ~Kathy
Lynne Spreen says
Great column, Kathy. Money is so fraught. It’s easy to be afraid of never having enough, to be afraid to speak of it, to be afraid in general. As an author who also tries to mentor other authors, I have emphasized that we need to learn to ask for payment, to calculate our costs and profits, to keep an eye on ROI for activities, and in general to think of it more as a business. But you’d be surprised. It’s still taboo, as if we should be embarrassed to be asking for compensation when we are so lucky to be living the dream.
Kathy Gottberg says
Hi Lynne! I know the anxiety about money runs deep in our lives. I REALLY appreciated how Portnoy approaches the issue because he continues to remind us (me at least) that much of our money-lives are deeply connected to our attitudes about money, safety, self-worth and a host of other issues. Yet unless we are willing to come to terms with our own views, beliefs, understandings, etc. we will always be trying to “fit in” with others views, beliefs, understandings etc. that may or may not bring us to our “rightsized” money lives. As far as getting paid for writing, I realize that our sense of self-worth may be at issue, but I also believe that the purpose and mission of our writing is equally as important. And as I’ve written about before, cash money isn’t always the one and only way to get “paid” for our work. Still, only through self-awareness will we know what works for us. Thank you for bringing up this side and also addressing a core issue that concerns our money-lives. ~Kathy
I love talking about money (and do it often), as it is easier to do when you don’t have much. Nothing to hide. 🙂 I don’t have many taboos when it comes to writing and talking. My conclusion is that having “a lot” of money alleviates many issues, as long as you don’t make sacrifices that take away your happiness on other levels. Is money important to me? Maybe yes, maybe no. It is to survive, but it does not define my wealth, which comes in many other forms, the least of which is money.
So, my tip is to focus on “enough”. Enough to survive comfortably and live a life without regrets. For some people, that “enough” means ten thousand dollars a month. For others, like myself, $2000 a month for both of us would be plenty. With that available to us until the end (hopefully one day), we’d feel comfortable retiring. Anyone can create a lifestyle, where more is possible with less. All it takes is commitment, practice and priorities.
Kathy Gottberg says
Hi Liesbet! Thank you for sharing your personal thoughts and experience with us on this issue. I SO-O-O agree that “having “a lot” of money alleviates many issues, as long as you don’t make sacrifices that take away your happiness on other levels. ” And your advice about focusing on enough is equally helpful. And you KNOW I agree with you that, “Anyone can create a lifestyle, where more is possible with less. All it takes is commitment, practice and priorities.” ~Kathy
Beth Havey says
I also like the four C’s. Money is such a complicated issue. As a child, we had little. My mother was a widow and we heard that a lot–which was okay, she worked hard to support us and the EXTRAS that we received were often gifts from our two maiden aunts and our grandmother. We learned that love and sharing means wealth, and that studying and earning scholarships can provide the tools for a COMFORTABLE life. Which I have always had, in lean years and years of plenty. I value things that some do not: books, reading, health, a quiet evening at home, the love of my family and my husband. Yes, travel is awesome, but there’s not much of it in my future, but I am okay with that. One thing my husband and I have always known: don’t spend beyond your means, ever. The fleeting enjoyment is not worth the pain of later.
Kathy Gottberg says
Hi Beth! Sounds like you learned some valuable lessons early on from your family. One thing that I really appreciated from Portnoy’s perspective is the amount of money in our lives doesn’t really matter–especially once we have the basics handled. What matters VERY MUCH is our perspective on our money. If we think we are missing out, well guess what? We feel deprived. If we, like you, recognize that those things you don’t have don’t really matter to you much, then you are content. It is only when we struggle with a comparison to others and trying to reach for more than is possible that we find ourselves depressed and/or worried about money. It is good to remember that if you can’t change your money circumstances, you might want to change your money attitude. ~Kathy
Beth Havey says
Yes, CHANGE YOUR MONEY ATTITUDE. LOVE THAT.
Joanne Sisco says
Money is a complicated topic. We all bring a lot of baggage to the discussion from watching our parent’s relationship with money and then layered with our own experiences once we became adults.
Even couples with similar socio-economic backgrounds – like my husband and I – can have very different relationships with money. Even my two sons brought up together treat money differently.
It amazes me that people who on the surface appear to have so little are so rich in love and generosity of spirit. I wish it was contagious.
Kathy Gottberg says
Hi Joanne. I personally believe it IS contagious. If science is now proving that the people we hang out with most can affect our happiness and even the biology of our bodies, then surely we have the ability to strongly influence those around us in regards to money. While I agree that we all have different personality structures that can influence how we learn and what we value, ultimately I think we can learn to adjust our behaviors (including our money lives) if we are given positive examples and pay attention. That might not work for everyone but it sure has worked in my life and many of the people we know and associate with. Of course sometimes it might take time and maturity for us to change and see the value. I am proof positive that it is possible. When I was young I thought my dad was pretty cheap. At my current age I deeply admire his frugal nature and the many lessons he taught me (in spite of myself!) I think we can change anything but we have to want to. ~Kathy
Tom Sightings says
I always tell my wife that I wish I had enough money to hire a personal assistant, you know, to take care of all my chores and personal needs.
She usually counters: What are you talking about? You HAVE a personal assistant!
Then I say: But she never does what I ask her to do.
She tells me: You don’t want that, You’d just get fat and grumpy.
So I guess he’s right. More money wouldn’t make me happier.
Kathy Gottberg says
Hi Tom! One of these days I would like to meet B. I think we would get along great. And as you might expect I agree with her on what you just said! ~Kathy
Janet Mary Cobb says
I’ve said for years that so much of the mess people get in with money comes from the secrecy that surrounds it. Years ago I wrote a piece wondering why/when our banks replaced churches – secrecy, reverence, etc. Being raised without the basic resources to survive and living 13 years with a vow of poverty has led to my frequent reflection on and discussions about my relationship with money. I have no desire for things – and live quite simply – but haven’t yet hit the point of funded-contentment. But even living in debt – I can still be content because I know life isn’t all about money. Thanks for another thought-provoking post.
Kathy Gottberg says
Hi Janet! Yes having read your memoir I can see how you have a very unusual relationship with money. That “habit” is so deeply ingrained in you that I’m sure it is second nature. On the flip side, most of us have habits in the opposite direction. And I completely agree that you can live with debt and still be content because it is balanced. Portnoy doesn’t claim that debt is a problem per se, only that it must be integrated with all our other circumstances like our income, our expenses, our plans and hopes for the future. Once we arrive at a ‘rightsized” perspective of all that we are well on our way to a “funded contentment.” ~Kathy
Janet Mary Cobb says
And then, of course, hope a recession doesn’t wipe you out! Good to know that Portnoy sees debt within context – this gives me hope given that much of our current debt is for the education of our children which seems like a necessary evil of sorts. Thanks for another positive take.
Bethany @ Happily Loco says
Kathy, this really hit close to home. After what I went through last year at work, a lot of people have told me they are sorry that happened…and yet, as nightmarish as it was, it forced me to leave a job I have not liked for 10 years. I am happy substitute teaching–very happy actually, although I have some minor trauma responses (mainly physiological) to returning to work in my field. I am overqualified, having a Master’s degree…but I am happy. I am using my support networks and limiting my time back at work.
We are “poor.” We are using assistance to bridge us through this transition, and we are grateful for it. And yet, I know the end result will be a work schedule I can deal with, without burning out, along with finanacial independence.
Kathy Gottberg says
Hi Bethany! Good for you recognizing that making more money while working at a job you dislike isn’t the answer. Far better to sit back and recognize what is REALLY important to you and then do your best to design from there. I was listening to Parker Palmer on a podcast this morning and he said that the best type of work to pursue is the one “the one you can’t not do.” If we all picked our work (or at least included that focus in our day) I can’t help that we would be better off and far happier. Good luck exploring your options and finding the perfect balance you deserve. ~Kathy
Hi, Kathy – Thank you again for another thought-provoking and timely post. Portnoy’s ‘Four C’s’ make perfect sense to me. In fact, in Middle School Education, the focus is often on helping students to feel Connected, Capable and Cared For!
I look forward to discussing Portnoy’s ideas with you IRL — starting tonight!!
Kathy Gottberg says
Hi Donna! How great to know that some middle schools are teaching a form of the four C’s. The only thing I see they could add would be “compassion” to round it out and match Portnoy’s thoughts. It’s important for us all to realize huh? And yes to seeing you and talking more tonight!!! ~Kathy
Sounds like an interesting book. I do like his 4 ‘C”s. The c of control I think money is the control over your future. Saying that I do think his other ‘C’s of charity, compassion and connection are needed for happiness with money. e
Kathy Gottberg says
Hi Haralee! Yes it is a surprisingly interesting and easy read–except for the chapter where he got REALLY technical with charts and graphs and all sorts of things. Like I said, I just skipped it 😉 and went on to where it got interesting again. And the four C’s fit brilliantly with rightsizing. ~Kathy
Diane Dahli says
I notice that you have also written “Choosing to be time-rich instead of house broke”. I missed that post, so will include that idea in my response now. For me, owning a home is the foundation of security, and answers the question, “Will I be okay?” I can’t imagine being at the mercy of landlords—in my youth, it was never a happy experience. A house, and the knowledge that I have a modest income are all that I need to make the “four cs” possible. I think I can say I’ve lived most of my life by design—having reached a mature age healthy and still interested in being creative! Thanks for a great post, Kathy!
Kathy Gottberg says
Hi Diane! Yes owning your own home (especially when it is free and clear) does help very much when it comes to a sense of wellbeing. But I did appreciate how frequently Portnoy pointed out that it doesn’t matter how much income you have (as long as you have enough to cover the basics). What matters, of course, is how you THINK about how much you have. He quotes a study they did a while back over the course of 10? or so years. They asked thousands of people how much they thought they would need for the next year to be comfortable and secure. Interestingly enough, every single year they said just a small amount more than what they had the year before. That shows that most of us think we need more even when we are doing relatively okay. Of course, as I get older, I can say that drive for more is definitely quieted down in my life and that helps tremendously. But I do continue to believe that we need to remind those younger than us (and anyone who can listen of course) that a balance of money is what is most important. That’s why I like rightsizing so much! Thanks for your thoughts on this. ~Kathy
Diane I fully understand. Being at the mercy of landlords can be an issue. But in high tax areas today, many who can’t really afford homes trade being at the mercy of landlords with being at the mercy of all of government regs, employers, banks, and the economy at the least independent times of their lives. Those and certainly the combination have the potential to be far more merciless. Pick your poison. With wealth you can be more independent of all of them, and if being independent of landlords compromises one’s future ability for independence from some or even all of the rest, it’s wise to pick the lesser of evils and that may be the landlord. I’ve never owned a home, for reasons unique to me and my location (I’m not a rent don’t own zealot), and I’ve had good relations with all my landlords over thirty years. So much so that even though I’ve had many landlords, it’s only because of relocating. I never felt the need to change landlords because of one being unreasonable. Good landlords need good tenants.
I will still own a home some day, but I won’t compromise a successful wealth building plan to do it.
The Widow Badass says
This is an important post and thank you for letting me know about this book. Yes, many people avoid the topic of money or obsess over and inflate its importance beyond what it truly is. I know a few rich people and they are not any more happy (most are less happy) than people I know with less in the bank.
Kathy Gottberg says
Hi Deb! Yes we all tend to avoid the conversation don’t we? Yet, how can it not be lurking in the background no matter where we are or what we hope to be, do or have in the future? Money is interwoven in just about every culture (at least in the west) these days so it’s so interesting that it is such a “shadow” topic. I found the approach in this book very interesting. Nothing earthshattering, but at the same time very thoughtful and important. I am doing my best not to avoid the topic now when it comes up. ~Kathy