Happiness: The Most Overlooked Part of a Financial Plan

Happiness: The Most Overlooked Part of a Financial Plan

When people think about financial planning, they usually think about investments, retirement accounts, tax strategies, insurance, and estate planning. All of those things matter. But there is one element that often gets overlooked despite being the entire reason we pursue financial success in the first place: happiness.

Most people don’t actually want more money. They want what they believe more money will provide. Freedom. Security. Experiences. Time with family. Less stress. More choices. In other words, they want a better life.

The problem is that many people spend decades chasing financial goals without ever defining what success actually looks like for them. They focus on accumulating wealth while postponing happiness for some future date that may never arrive.

I’ve worked with individuals across all income levels, and one thing becomes clear very quickly: money and happiness are related, but they are not the same thing. Some of the wealthiest people I’ve met are constantly stressed, while some people with far less money seem genuinely fulfilled.

The difference often comes down to intentionality.

A good financial plan should help you answer questions that go beyond rates of return and portfolio allocations. What do you enjoy doing? Who do you want to spend your time with? What experiences matter most to you? What kind of legacy do you want to leave behind?

Money is simply a tool. Like any tool, its value depends on how it’s used.

One of the greatest risks in life is reaching your financial destination only to discover you sacrificed too much to get there. Relationships were neglected. Health deteriorated. Experiences were postponed. Time passed.

This doesn’t mean spending recklessly or ignoring long-term goals. It means finding balance between enjoying life today and preparing for tomorrow. The best financial plans create room for both.

I’ve often said that the purpose of wealth is not to impress people. It’s to increase your options. Wealth gives you the ability to choose how you spend your time, where you work, who you work with, and how you live. Those choices are often far more valuable than the dollars themselves.

Research consistently shows that experiences tend to create longer-lasting happiness than material possessions. Family vacations, shared memories, hobbies, personal growth, and meaningful relationships often provide a much greater return on life than the next luxury purchase.

As you review your financial goals, ask yourself a simple question:

“Am I building a life that I actually enjoy, or am I simply building a larger account balance?”

The answer may change the way you think about money.

At the end of the day, financial planning is not about spreadsheets. It is not about benchmarks. It is not about beating an index.

It’s about helping people live the lives they want to live.

Because the ultimate measure of wealth isn’t what appears on a statement. It’s whether your money is helping you create a life filled with purpose, freedom, meaningful relationships, and happiness.

Click here to schedule a meeting — I’m here to help you take the next step toward financial freedom.

Colin Symons, CIO Lloyd Financial Group

Interest rates went bad on Friday, following the strong jobs report. What happened, exactly? The very strong jobs report sent the message that rate cuts are far away. In fact, now we’re starting to price in a likely rate hike by the end of the year, and a total of two for next year (chart below.) Growth stocks took one look at that and ran screaming for the hills.

So, are we all set to get rate hikes? Well, that’s what the market says. My attitude is the odds of Warsh coming in and hiking rates is vanishingly low, unless something remarkable happens. Thus, I’d expect rate hike odds to fade and that stressor to lessen.

Realistically, what would get Warsh to hike? We’d need to see a sustained burst of inflation. While the months of higher oil may well keep inflation higher for longer, oil has also been coming down from highs. Warsh has said before that he wants to be more forward looking than earlier Fed Presidents, so he would likely call that inflation transitory.

In addition, the market is pricing in rate hikes because of a strong jobs print. That’s something Warsh would more likely cheer. My interpretation of his whole plan is to cut rates to ease financing costs for the bottom of our K-shaped economy and effectively pay for it by shrinking the Fed balance sheet, which only hits the top part of the K. Strong jobs aren’t going to make him hike rates.

So, I disagree with the market on the short end of the yield curve. It thinks rate cuts are likely and I don’t. What about the long end of the curve? I admit, that’s a harder bet. To a large extent, you can think of longer rates as pricing on nominal GDP expectations, or real GDP plus inflation expectations. Is inflation and a run-it-hot attitude going to be with us for a while? While I wouldn’t expect something like 10-year Treasury yields to go a lot higher, it’s reasonable to think they could go somewhat higher, or stay elevated.

Where does that put risk assets in general? It seems to me the big stressor right now is expectations of a rate hike coming. I’d expect that gets priced out, and particularly at the next FOMC meeting on the 17th. That will be Warsh’s first meeting as President, and I’d think he would strenuously put to bed ideas of a rate hike.

This article is about rates. There’s more going on in markets, particularly semiconductor stress, which I’ll talk about tomorrow. However, plenty are nervous about markets after the Friday crash. Just to put people’s minds at ease, I don’t see substantive problems here. Overleveraged traders got hurt. I tend to think this is like forest fire management, where a small burn now helps prevent a bigger burn later.

Rates are causing problems but seem unlikely to be a lasting error. Again, eventually we will have problems, and it may even be soon. Right now, though, the conditions that have kept markets elevated still seem in place. At least for now, I’d remain constructive on markets, as we haven’t broken out of any range that would indicate reason to worry.

NFP was 172K vs. exp. 88K, with the unemployment rate unchanged at 4.3%. Jobs continue to look fine. The prior month was also revised up.

Strong jobs made the yield curve soar, particularly on the short end. The market is now starting to price in a rate hike by the end of this year. I’ll take the under on that one.

Iran and Israel spent the weekend lobbing missiles at each other, sending oil up 4% and Treasuries down some. Trump said a deal was supposed to be signed this week, until this happened.

Between semi weakness and rate stress, Friday was a tough day. In particular, the semiconductor index (SMH) was down over -9%, though still up 58% on the year.

Along those same lines, SPX was down 2.5% on Friday but still up 13.2% in Q2.

The Korean KOSPI index had a volatile night, including getting halted, but ended -8%, catching up to Friday’s US losses. The US semiconductor index is up 2% this morning.

Eli Lilly (LLY) was up 4% after their new weight loss drug showed promise.

Empire Fed inflation today.

Bottom line: More pain in oil and rates, but stocks are hanging in.

Click here to schedule a meeting — I’m here to help you take the next step toward financial freedom.

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