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Happiness Portfolio Allocation



One of the critical questions in the science of happiness field is "How to maximize long-term happiness".


Despite being a recent science, the science of happiness brought in the last two decades robust scientific evidence on what can make people happier and even live longer. There are different academic models, such as Martin Seligman's PERMA (positive emotion-engagement-relationships-meaning-achievement) and Tal Ben Shahar's SPIRE (Spiritual - Physical - Intellectual - Relationships- Emotional), but all of them circle around the same elements of long term happiness, namely: Relationships, fulfilling and meaningful work, spirituality, and mental and physical wellbeing. Let's cover each one quickly.


Relationships - Humans are ultra-social species, and our close social support network is the most critical driver of long-term happiness, especially in old age. Humans with good and strong relationships live better and longer lives. Loneliness increases stress and reduces humans' ability to deal with and overcome negative emotions. Studies have shown that being lonely in old age has the health effect equivalent to smoking 15 cigarettes a day.


Fulfilling Work - Work is where the majority of us spend the bulk of our waking hours. Work can be a source of joy and fulfillment or a source of stress and pain. Work can provide a sense of purpose, achievement, and self-worth. The Japanese make no distinction between "profession/occupation" and "life purpose." In Japan, your profession is your life purpose ("Ikigai"). Happiness at work requires purpose, engagement (flow), and autonomy. Fulfilling work needs an element of achievement (intrinsically motivated, not extrinsically) and greater good (benefit others).


Spirituality - Spirituality has been proven to be an important driver of happiness. Religious practice creates community and stronger relationships. Spirituality can manifest itself through religion but also in our relationship with something greater than ourselves (nature, soul). Studies have shown that living close to nature or exercising in nature improves happiness, health, and life span.


Mental and physical wellbeing - The balance between positive and negative emotions and our ability to deal with negative feelings impact our happiness. The practice of Mindfulness, Gratitude, kindness, compassion, and reconciliation are all proven mechanisms of improving satisfaction. Avoiding "bad" addictions such as alcohol, sex, drugs, and social media triggered by our brain's reward mechanisms that come to the detriment of relationships, work, and health is also a key component. "Mens sana in corpore sano". There is also ample proof that physical activity and nutrition significantly impact our well-being.


Social Scientist Arthur Brooks compares these components of happiness to "assets" that you need to combine to create a healthy portfolio that will "maximize" your happiness in the long term. We should approach our lives like we approach financial planning. The critical question is, "Where should I invest and when to maximize the value of my portfolio over time?".


Some people adopt "lifestyles" that maximize short-term pleasure and are skewed towards one or other element of a life well-lived. Although this could potentially maximize short-term enjoyment, it sub-optimizes long-term well-being. A well-balanced "happiness portfolio" will allow us to be whole beings and live good lives over time.


"Workaholics" might prioritize work at the expense of relationships, mental and physical health, and spirituality. At later stages in life, when "work" becomes less important, they realize they have no friends, weak family ties, health problems, and no faith and sometimes become lost, isolated, and depressed. Money and Happiness have a positive linear correlation but only until around US$75k a year on average in the US. Above that level, financial gains at the expense of relationships, fulfillment at work, and spirituality will significantly negatively impact well-being, especially later in life.


Sometimes "athletes" (professional and amateurs) prioritize physical health and their "athletic" achievements at the expense of relationships, mental health, and enjoyment. It is no surprise the current mental health pandemic we see among athletes worldwide. Self-worth and achievement are essential elements in the happiness portfolio. Still, as an athletic career ends between the 30s and 40s, it cannot come at the expense of what will be important after the sports career is over. Transitioning from "success addiction" (I am assuming a successful athlete) in sports to an entirely new life purpose is complicated. Still, it can be even more complex if the seeds of long-term happiness were not planted early on.


Going to another side of the equation, some people decide to dedicate themselves entirely to their families - for example, the dedication of full-time moms to their children. Although total commitment to the family might be one of the most altruistic, kind, and noble paths a person might decide to take, if not correctly managed might result in a problematic "empty nest" syndrome. Grief, loneliness, and depression take over when children leave the house if the caretaker hasn't invested in the relationship with their spouses or friends (the "social support network"), kept a fulfilling occupation, or hasn't dedicated enough time to their mental and physical health. Again, life is about (some) balance.


Of course, our time and resources are limited. We can't have it all. Choices will always be needed, and prioritization will be required depending on one's life stage. The question is how to be aware of the consequences of the choices being made in our "happiness portfolio allocation." We should choose a "lifestyle" that is consistent with the life we want in the future, maximizing not our short-term pleasure but our life satisfaction in the long run. No one should expect to have supportive friends in their old age if they were absent when these friends needed them the most. Nobody should wait to get sick to start having some faith.


Do you know what will be important to your life in the next 20 or 30 years? How is your happiness portfolio planning looking? Are you investing consciously and wisely to have a good life today but also tomorrow?


More on happiness portfolio allocation next week. If you think this can be useful to someone you love, share.


Happy Life,


Pedro




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