Be happy with what you’ve got

By John J. De Goey | October 27, 2010 | Last updated on October 27, 2010
3 min read

The perverse thing about living in a society that’s obsessed with keeping up with the Joneses is people are seldom satisfied. Fulfillment in life can come from any number of activities or pursuits. Many of them (watching your daughter progress as a pianist, running a marathon, staying married) relate back to things that money can’t buy. For better or worse, many people value those things that represent demonstrable wealth and/or conspicuous consumption. I seems the ethos of wanting what you have is fading quickly.

Earlier this year, there was an IPSOS Reid poll/study that showed most Canadians think the retirement of their dreams is ‘out of reach’. The research illustrated that although 90% of Canadians think they’ll have enough for necessities, only 25% think they’ll be able to fund the retirement they really want. Perhaps that’s because so many of the things that our parents and grandparents thought were extravagances are now seen as being baseline items.

Financial planning really comes down to how you keep score in terms of setting and attaining reasonable financial goals. It seems people are fairly happy if they measure backwards and compare what they have now to what they had previously. The people who are the most unhappy are those who measure forwards- by looking at how far they have to go before they can live the lifestyle they want.

In short, people who look backward tend to see the glass as being half full, while those who look forward tend to see it as being half empty. As people who give advice, it’s important that we don’t lose sight of the fact that, no matter which side you are on, it’s the same glass you’re looking at.

So much of advice-giving relies on framing and maintaining a healthy context. Perspective can be a powerful tool in moving investors toward constructive behaviour modification. For planning and lifestyle purposes, people need to be able to see the horizon getting closer due to progress in order to feel genuinely contented about the prospect of retirement. To that end, I think advisors would be well-served by boning up on the behavioural finance concepts that can help keep clients on an even keel. Some of the books I’d like to recommend are:

  • Beyond Greed and Fear by Hersh Shefrin
  • Innumeracy by John Allen Paulos
  • Fooled by Randomness by Nassim Nicholas Taleb
  • The 10 Biggest Investment Mistake Canadians Make by Ted Cadsby
  • Why Smart People Make Big Money Mistakes by Gary Belsky and Thomas Gilovich
  • Nudge by Richard Thaler and Cass R. Sunstein

I’ve read all of these and continue to marvel at the perverse way so many of us (yes, that includes me) make our financial decisions.

The fact is, we all have our demons, biases and blind spots. That said, the more we can help our clients recognize their demons, biases and blind spots, the more successful we’re likely to be in helping them achieve the retirement they dream of. So much of giving good advice is rooted in maintaining perspective, not reading a balance sheet.

John De Goey, CFP, is the vice president of Burgeonvest Bick Securities Limited (BBSL) and author of The Professional Financial Advisor II. The views expressed are not necessarily shared by BBSL. You can learn more about John at his Web site:

John J. De Goey