Category Archives: Mindset

Understanding the Emotions of Investing | Edward Jones

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“You get recessions, you have stock market declines. If you don’t understand that’s going to happen, then you’re not ready, you won’t do well in the markets.” – Peter Lynch

No one can control the economy, the stock market or exactly know how an investment will perform in the short term. And that lack of control and certainly can lead to making poor (and many times, emotional) investing decisions – like chasing performance, not diversifying, or trying to time the market by moving into and out of the market (often at the wrong time).

While these reactions can be triggered by a desire to avoid risks (defined for our purposes as loss of capital), the results of these behaviors can pose the greatest risk of all — not reaching your long-term goals. In fact, the biggest risk may not be market fluctuations themselves; it’s our emotional reaction to these fluctuations and market volatility. That’s why it’s so important to have a financial advisor in your corner, helping you stay committed to your long term investment strategy.

Here are some common emotional investing behaviors that may derail your journey to reaching your long-term financial goals. By understanding the pitfalls of these behaviors, you can prevent making these investing mistakes in the future.

1. Heading to (or staying on) the sidelines

We’ve all seen the headlines: the economy’s slow recovery, the government’s budget deficit, market volatility. Prompted by what they perceive as bad news, some investors may try to “time the market” or sell investments just because of what they hear in the news – to move to the sidelines (and perceived safety) and wait until things get better. But it’s nearly impossible to correctly ‘time’ the market (predict when to get out and even more difficult to decide when to get back in), which often results in missing the best days – thereby severely affecting your performance And often, waiting until things get better means selling when prices are down and then buying back in when prices are higher – not a recipe for long-term success.

Other investors hold in too much cash because they want to avoid market risk. But not investing could actually increase your risk because you may not have enough growth in your portfolio to meet your short and long term financial goals or offset inflation (and loss of purchasing power).

2. Stay in the game and stay invested

Keep your focus on your long-term financial goals rather than on the ever-changing headlines, which could focus too much on the negative for dramatic effect.

If you begin to feel overwhelmed, talk with your financial advisor about your attitude toward risk and observe how you react to specific events. That way, you can work together to refine your goals and investment strategy, if needed.

3. Chasing performance

When the media raves about the latest “hot” investment or highlights “dramatic” declines in the market, some investors are tempted to chase the winners and sell the losers. This type of emotional response could be a recipe for underperformance because it results in buying high and selling low – not the recipe for a successful investment strategy.

4. Stay diversified

Having a diversified set of investments is more important than trying to find the next “hot” investment. When you have a portfolio made up of a variety of quality asset classes and investment types, success isn’t tied to one company or one type of investment. While diversification cannot guarantee a profit or protect against loss, it can help smooth out the ups and downs of the markets, providing the potential for a better long-term experience.

Financial experts recommend reviewing your portfolio with your financial advisor at least once a year to ensure it’s adequately diversified. Your financial advisor can also help you decide if a recent major lifestyle or goal change warrants a change to your strategy.

5. Focusing on the short term

Day-to-day fluctuations in an investment’s value may tempt some investors away from their long-term strategy. For example, some investors sold out in 2008 because their portfolio had fallen from an all-time high, even though their performance may still have been on track to meet their goals and well above where they initially started.

Decisions can also be influenced by how a situation is presented.

Take this example: “The Dow plummets 150 points” OR “the Dow declines 1%.” Both could describe the same situation, but the first sounds much worse. It’s these short-term movements, and how they’re presented by the financial entertainment media, that could lead you to make emotional short-term decisions.

6. Setting realistic expectations

Realizing that market declines, while unpleasant, are normal will help you set your own realistic expectations for investment performance. After all, the stock market averages one 10% correction every year, and over a 25-year retirement, you could experience an average of six to seven bear markets.

It’s important to measure performance as progress toward your long-term goals, not in day-to-day fluctuations. Your financial advisor can help you answer the question, “How am I doing?” and help provide the discipline you’ll need to stick with your long-term strategy and ignore short-term distractions.

Source: https://www.edwardjones.com/preparing-for-your-future/financial-education-resources/investing-emotions.html

Give Every Dollar a Job

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“Controlling and managing your spending is a skill that takes practice, determination and discipline.”

One of the most important things you must learn and understand in financial planning is that every dollar must have a job, whether you intentionally give it one or not. It is best to assign a task to every dollar you earn. When every dollar has a predetermined destination and income minus spend equals zero, you have created a zero-balance budget; this is the goal.

If the idea of maintaining a budget seems unpalatable, start small. Begin by tracking your monthly expenses and spending habits.  You need to have a clear picture of where your money is going before you can change anything.

Become the boss of your paycheck and cash

Start assigning a job for every dollar you have with the intent of ensuring that money is your servant and working for you. You need to direct it to the things that move you forward, the things that allow you to live the kind of life you envision for yourself. You need to determine where your money goes, you need to take control.  Here are some examples, according to Joe Morgan, financial advisor, Best Financial Life:

  • Your home equity dollars provide a place to live and the safety that your home value won’t fall below your mortgage (assuming you have enough of them)
  • Your emergency fund sits like the fireman in the station, ready to help you through life’s next big challenge
  • Your living expenses, which are funded by your paychecks, ensure your current lifestyle is maintained throughout the year
  • Your savings cover any big purchases over the next five years that cannot be funded by your regular pay
  • Your investment portfolio takes care of expenses that are five or more years in the future, which won’t be covered by future income
  • Your “play money” investment account is for entertainment purposes, but only if you know you won’t get rich (or go broke) buying and selling individual stocks.

Give Every Dollar a Name

Intentional Mindset

Personal finance podcaster, Paula Pant, says, “You can afford anything, just not everything.” Intentional living is not about deprivation or sacrificing the things you enjoy, but investing and spending on the things that are valuable to you.

Adopting an intentional mindset around where and how you spend your money will help control cash flow and free up more money to save and invest. For example, if quality food and nice meals are where you find value, you could focus on spending in that category, but you may need to pull back in another.

It’s important to understand that building the life you deserve isn’t about owning luxury brands or having the biggest house. It’s about finding the things that aligns with your personal values and the vision for your life and that bring you purpose, fulfillment, and joy, while balancing the cost versus value in the choices you make.

Your time is ultimately one of your greatest assets. As Warren Buffett says, “If you don’t learn to make money while you sleep, you will work until you die.” A big part of your financial journey will be finding ways to make your money work for you, taking steps like investing in low-cost index funds.

When it comes to spending, being intentional by giving every dollar a job and intentionally search for the best value can make a big difference to your cash flow and personal financial bottom line.

References:

  1. https://financialaid.syr.edu/financialliteracy/financial-basics/every-dollar/
  2. https://bestfinlife.com/give-a-job-to-every-dollar-you-have/
  3. https://www.cnbc.com/2021/02/12/sisters-who-went-from-financially-insecure-to-6-figure-net-worths-top-money-tips.html
  4. http://www.orangecoastcollege.edu/student_services/financial_aid/wellness/Pages/dollarajob.aspx

Our mission is to educate and empower you with financial knowledge and skills, so you can ultimately apply to your life, create financial security, and build wealth for retirement.

Let This be the Best Year Ever by Ann Landers

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“Let this coming year be better than all the others. Vow to do some of the things you’ve always wanted to do but couldn’t find the time.” Ann Landers

Ann Landers dispensed advice to millions of Americans on everything from parental difficulties to marital relationships. Landers was one of the world’s most widely read advice columnist.

For 46 years, she offered compassionate and blunt counsel to spouses, singles in relationships and teenagers. Her columns chronicled the nation’s attitudes, preoccupations and worries for millions readers.

Her most enduring and endearing column is…”Let this coming year be better than all the others. Vow to do some of the things you’ve always wanted to do but couldn’t find the time.

  • Call up a forgotten friend. Drop an old grudge, and replace it with some pleasant memories.
  • Share a funny story with someone whose spirits are dragging. A good laugh can be very good medicine.
  • Vow not to make a promise you don’t think you can keep.
  • Pay a debt.
  • Give a soft answer.
  • Free yourself of envy and malice.
  • Encourage some youth to do his or her best. Share your experience, and offer support. Young people need role models.
  • Make a genuine effort to stay in closer touch with family and good friends.
  • Resolve to stop magnifying small problems and shooting from the lip. Words that you have to eat can be hard to digest.
  • Find the time to be kind and thoughtful. All of us have the same allotment: 24 hours a day. Give a compliment. It might give someone a badly needed lift.
  • Think things through. Forgive an injustice. Listen more. Be kind.
  • Apologize when you realize you are wrong. An apology never diminishes a person. It elevates him.
  • Don’t blow your own horn. If you’ve done something praiseworthy, someone win notice eventually.
  • Try to understand a point of view that is different from your own. Few things are 100 percent one way or another.
  • Examine the demands you make on others.
  • Lighten up. When you feel like blowing your top, ask yourself, “Will it matter a week from today?”
  • Laugh the loudest when the joke is on you.
  • The sure way to have a friend is to be one. We are all connected by our humanity, and we need each other.
  • Avoid malcontents and pessimists. They drag you down and contribute nothing.
  • Don’t discourage a beginner from trying something risky. Nothing ventured means nothing gained. Be optimistic. The can-do spirit is the fuel that makes things go.
  • Go to war against animosity and complacency.
  • Express your gratitude. Give credit when it’s due—and even when it isn’t. It will make you look good.
  • Read something uplifting. Deep-six the trash. You wouldn’t eat garbage—why put it in your head?
  • Don’t abandon your old-fashioned principles. They never go out of style.
  • When courage is needed, ask yourself, “If not me, who? If not now, when?”
  • Take better care of yourself. Remember, you’re all you’ve got. Pass up that second helping. You really don’t need it. Vow to eat more sensibly. You’ll feel better and look better, too.
  • Don’t put up with secondhand smoke. Nobody has the right to pollute your air or give you cancer. If someone says, “This is a free country,” remind him or her that the country may be free, but no person is free if he has a habit he can’t control.
  • Return those books you borrowed. Reschedule that missed dental appointment. Clean out your closet. Take those photos out of the drawer and put them in an album. If you see litter on the sidewalk, pick it up instead of walking over it.
  • Give yourself a reality check. Phoniness is transparent, and it is tiresome. Take pleasure in the beauty and the wonders of nature. A flower is God’s miracle.
  • Walk tall, and smile more. You’ll look 10 years younger.
  • Don’t be afraid to say, “I love you.” Say it again. They are the sweetest words in the world.
  • If you have love in your life, consider yourself blessed, and vow to make this the best year ever.”

References:

  1. http://www.appleseeds.org/new-year_advice.htm
  2. https://www.latimes.com/archives/la-xpm-2002-jun-23-me-ann23-story.html

Quote of the Week

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“It is said an Eastern monarch once charged his wise men to invent him a sentence, to be ever in view, and which should be true and appropriate in all times and situations. They presented him the words: “And this, too, shall pass away.” How much it expresses! How chastening in the hour of pride! How consoling in the depths of affliction! “And this, too, shall pass away.’’ ~ Abraham Lincoln, 16th POTUS in remarks before the Wisconsin State Agricultural Society in Milwaukee, Wisconsin, September 30, 1859.

In today’s unpredictable world, this quote of Abraham Lincoln is very relevant.

“This too shall pass away” are good words to remember when you encounter an unexpected challenge. They are also good words to remember when you have just experienced an unexpected success.

Basically, nothing is permanent. “This too shall pass away” is a phrase that is often used as encouragement to remind someone that a bad or unpleasant situation will eventually end.

“Expect trouble as an inevitable part of life and repeat to yourself, the most comforting words of all; this, too, shall pass.” Ann Landers

References:

  1. https://www.nps.gov/liho/learn/historyculture/amerfuture.htm
  2. https://leadershipwatch-aadboot.com/2019/09/21/this-too-shall-pass-said-lincoln-and-what-it-means-for-leadership-today/

Mindset: Two Wolves – A Cherokee Parable

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“Feed your faith and your fears will starve. Feed your fears and your faith will starve.” Pastor Max Lucado

An old Cherokee chief was teaching his grandson about life…

“A fight is going on inside me,” he said to the boy.

“It is a terrible fight and it is between two wolves.

“One is evil – he is anger, envy, sorrow, regret, greed, arrogance, self-pity, guilt, resentment, inferiority, lies, false pride, superiority, self-doubt, and ego.

“The other is good – he is joy, peace, love, hope, serenity, humility, kindness, benevolence, empathy, generosity, truth, compassion, and faith.

“This same fight is going on inside you – and inside every other person, too.”

The grandson thought about it for a minute and then asked his grandfather,

“Which wolf will win?”

The old chief simply replied,

“The one you feed.”

Takeaway

Your thoughts can be your best friend or worst enemy. That is, if you let them.

Think about how you may be “feeding” your positive or negative thoughts, and allowing them to control your prevailing mood, attitude and behavior.

You have the ability to change anything in your life that no longer serves a purpose. Start today by believing that there is nothing in life that you can’t achieve. It is vital that you maintain a positive mindset and focus on what’s positive in your life. Dreams and goals cannot come to pass with a negative mindset.

References:

  1. https://www.virtuesforlife.com/two-wolves/
  2. https://m.huffpost.com/us/entry/us_580fda27e4b06e45c5c6ffd6

Sir Christopher Wren and The Story of Three Bricklayers

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Mindset affects just about everything–including your attitude. Your attitude is based upon your beliefs. Beliefs affect your decisions. Decisions affect your behavior, behavior affect your actions, actions affect your results.

After the Great Fire of London destroyed much of the medieval city of London in 1666, Sir Christopher Wren designed new churches and supervised the reconstruction of some of London’s most important buildings. His name is synonymous with London architecture.

He produced ambitious plans for rebuilding the whole area but they were rejected, partly because property owners insisted on keeping the sites of their destroyed buildings.

Wren did design fifty-one (51) new city churches, as well as the new St Paul’s Cathedral. In 1669, he was appointed surveyor of the royal works which effectively gave him control of all government building in the country. He was knighted in 1673.

Story of Three Bricklayers

We see things as we are; not as they are

The story of three bricklayers is a true story. After the great fire of 1666 that leveled London, the world’s most famous architect, Sir Christopher Wren, was commissioned to rebuild St Paul’s Cathedral.

One day in 1671, Sir Wren observed three bricklayers on a scaffold, one crouched, one half-standing and one standing tall, working very hard and fast.

  • To the first bricklayer, Christopher Wren asked the question, “What are you doing?” to which the bricklayer replied, “I’m a bricklayer. I am cutting this stone to a certain size and shape.” He was just doing a task
  • The second bricklayer, responded, “I’m a builder. I’m building a wall. I’m working hard laying bricks to feed my family.” He was just earning a living
  • But the third brick layer, the most productive of the three, when asked the question, “What are you doing?” replied with a gleam in his eye, “I’m a cathedral builder. I am helping Sir Christopher Wren build St. Paul’s Cathedral for The Almighty.” He was doing his small part of building a great cathedral.

The lessons from the story of three bricklayers:

  • Big Picture Thinking – Being able to see the end result and how your work contributes to that end.
  • Attitude – A positive attitude and pride in what you are doing will show up in your work and your motivation.
  • Connection to the Organization’s Mission – Employees who are rightly connected to the organization’s mission, vision, values, and goals are happier, more engaged, and more productive employees.

The Power of Purpose and Calling

The story of the three bricklayers is also a metaphor on the power of purpose, where the “cathedral builder,” demonstrates a personal expression of purpose that transforms his attitude and gives a higher meaning to his work. Another term for purpose is “calling.” For the first bricklayer, building the wall was a job. For the second bricklayer it was an occupation. For the third bricklayer, it was a calling.

A calling reflects our universal need to matter, to influence, and make a difference in the world around us.  Victor Frankel made this clear in his book, The Meaning of Life.  He wrote about how some people survived the holocaust, but so many didn’t.  One of the things he identified was those who had a purpose or reason to continue to live that was beyond themselves tended to survive, while those who were focused primarily on themselves did not.  Those who survived found some meaning in their painful circumstances.  The meaning they found was in caring for and helping others in this horrible experience.

References:

  1. https://www.thoughtco.com/sir-christopher-wren-rebuilder-of-london-177429
  2. http://www.bbc.co.uk/history/historic_figures/wren_christopher.shtml
  3. https://sacredstructures.org/mission/the-story-of-three-bricklayers-a-parable-about-the-power-of-purpose

Financial Literacy: Six Principles of Personal Finance | TD Ameritrade

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Imagine operating a boat without the basic understanding of nautical rules of the road or even how to operate a boat. Scary thought.

Here’s another scary circumstance – one that is all too real. Many Americans are making financial decisions with minimal financial knowledge of investing, budgeting, and credit. The TIAA Institute conducted a survey on U.S. financial literacy, asking 28 basic questions about retirement saving, debt management, budgeting, and other financial matters. The average respondent answered only about half of the questions correctly.

Another study, conducted by Pew Research, found that one in four Americans say that they won’t be able to pay their bills on time this month.

It has been said that knowledge is power, and if that’s true, then too many Americans lack the power to control their financial futures. Financial success rarely happens by accident; it is typically the outcome of a journey that starts with education.

Talking about money is one of the most important skills to being a fiscally responsible and a financially literate person. However, 44% of Americans surveyed would rather discuss death, religion or politics than talk about personal finance with a loved one, according to CNBC.

Why? Two major reasons are embarrassment and fear of conflict, even though the consequences can be grave: 50% of first marriages end in divorce, and financial conflict is often a key contributor. Additionally, it is considered rude to discuss money and wealth.

The missing component is financial literacy education and training.

Mastering personal finance requires you to look at your financial situation holistically and come up with a plan for how to manage your money. In this TD Ameritrade video, we’ll look at helpful principles for six personal finance topics:

  1. Budgeting – focus on the big ticket items by cutting cost on the expensive costs such as cars and homes
  2. Saving and investing – be specific about your destination and your plan on achieving your goal and reaching your destination
  3. Debt and Credit – avoid high interest debt and loans on items that will quickly lose value
  4. Reduce taxes – find ways to legally pay less taxes on the income you earn,
  5. Avoid insurance for expenses you can pay out of pocket – purpose of insurance is to protect you in unfortunate scenarios.  60% of all bankruptcy is related to medical expenses
  6. Investing for retirement. – don’t just save for retirement, invest for retirement.

Make high impact adjustments to your finances to improve your financial future.

References:

  1. https://www.cnbc.com/2019/04/30/the-us-is-in-a-financial-literacy-crisis-advisors-can-fix-the-problem.html
  2. https://www.tiaainstitute.org/publication/financial-well-being-and-literacy-midst-pandemic
  3. https://www.pewtrusts.org/en/research-and-analysis/articles/2017/04/06/can-economically-vulnerable-americans-benefit-from-financial-capability-services

Change Your Perspective, Change Your Life

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“It’s never the situation that’s at fault. It’s the way we choose to view it. How we see our lives is how we live our lives.” Nicolas Cole

Many people, after experiencing setbacks and failures, emotionally give up and stop trying. They believe that because they were unsuccessful in the past, they will always be unsuccessful going forward. In other words, they continue to see a barrier or obstacle to their success in their heads, even when no barrier or obstacle exists between where they are in their life and where they want to go.

Yet, no matter how hard the world tries to hold you back and convince you that you’re not worthy of achieving the life you desire, it’s imperative that you always continue to believe that your goals and what you want to achieve in life are possible. Believing you can become successful and you can achieve your wildest dreams and goals are the most important and critical steps in actually achieving them.

Taking accountability.

The reason why so many people struggle and fail at achieving their wildest dreams and goals is that they take the easy path and blame others for how they feel, for their current life, or for their personal issues.

Instead of “manning (or womanning)-up”, they default to blaming their parents, their childhood, or their bad luck for the reality they find themselves.

The key to achieve success and accomplish your goals is to take accountability. To shift your perspective from “blame” to “ownership.” By taking ownership and accepting accountability, you are allowing yourself to open up and to see opportunities to learn and grow.

Focus On The Lesson, Not The Problem

Many people fail to realize that it’s the journey that’s most important, not the end of the journey or reaching the destination. You are “successful” when you are walking your path, always learning, always growing. You are “doing what you love” when you see every moment as an opportunity.

It’s on you to discover the opportunities to grow and learn, and to embrace every moment as an opportunity.  Regardless of where you are in life, or what you’re doing, there are lessons to be learned. And unless you can discover those lessons and embrace your own journey, you will never actually reach the state of feeling “successful”–in the sense that you are learning and growing and effortlessly becoming a better version of yourself.

Lessons Are Everywhere. It’s On You To Find Them.

It is important to train and to condition yourself to always find the positive. Create moments of growth and opportunity. Growth is the result of how you utilize your environment and the people around you, and create opportunities for yourself.

The key to shifting your perspective is to remember what you’re aiming for. For example: A job where you perform mundane tasks is going to continue being mundane if you just see it as “just a job.” But a job where you perform mundane tasks that could be seen as a way to learn skills you need in order to one day do what it is you truly want to do, is no longer “just a job.” It’s an opportunity to learn.

You should recognize that what you look for is what you tend to see. So, instead of looking for an outcome that is negative or some flaw, look for something positive that can be beneficial or add to your. Shift your search for happiness and you can help create what you most desire.

Replace negative thoughts with something more positive. Practice focusing on the positive thoughts. The more you practice, the easier it will be for these thoughts to become second nature. Strive to say at least three positive thoughts about yourself each day, as it can make you feel happier and more confident during the day and help banish negative thoughts. Remember that perspectives can change, so work towards striving for positivity.

In the story above, nothing physical or tangible changed with your circumstances. The only thing that changed was your perspective.  And that makes all the difference.

So, when you’re looking at what’s going on around you and wonder how to escape the negativity and dark feelings. Maybe it’s not your circumstances that need to change—it’s your perspective and mindset.

References:

  1. https://www.marcandangel.com/2013/05/21/4-short-stories-change-the-way-you-think/
  2. https://www.inc.com/nicolas-cole/change-your-perspective-change-your-life.html

GET YOUR “MINDSET RIGHT”

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“Change your thinking, change your life.” Frank Sonnenberg

If you want to be successful – in both your personal and financial life – you must have the right mindset. Essentially, your mindset represents the way you approach the world and what you believe to be true.  When it comes to success, your mindset is the most important predictor of your future success in personal finance and life. Everything in life begins with your mindset, thoughts, attitude and habits.  

Think of mindset as a set of attitudes, beliefs or ideas each person possesses. These attitudes, positive or negative, may come from your environment, home life and your personal experiences, or they might have been learned while at school. No matter their source, what you do to foster a positive growth mindset really does matter.

A growth mindset helps foster more positive thinking and a belief that intelligence can change, develop and grow. It is the belief that people can learn from their mistakes and that the brain is like a plant, always ready to soak up new information and knowledge. A student with a growth mindset might say: “I’m not going to give up,” “I’m going to keep trying,” or “I can do this.”

“Whether you think you can, or you think you can’t – you’re right.” Henry Ford

Success and financial security begins with your mindset. If you are determined to do something, and believe that you can achieve it, then you will find ways to succeed. Your determination to develop good financial habits and manage your money better are key to realizing your financial goals and achieving financial security.

Anyone can make a budget and have a financial plan to save for the future, spend less, and invest for the long term. But that is only 10% of the financial equation. The other 90% is how you think, how you behave and what you believe about money.

Your mindset is key to creating the life you desire and deserve. Your beliefs drive your habits and emotions, and in turn, these determine your behavior. If you believe you can, you will. You must believe that, “You are good enough. You are smart enough. You have unique and valuable gifts to offer the world and people notice and respect you for it.”

Studies have shown that allowing stress to overtake you can often have lasting negative effects on more than your mindset. Your health can be affected, your careers can be affected, and your entire lives can be affected!

David Bach, author of the best-selling book, The Latte Factor: Why You Don’t Have to Be Rich to Live Rich, says. “I’m super positive about things [long-term], but I think people need to be preparing themselves for volatility and rockiness.”

But there’s a silver lining to the downturn, Bach says: “Recessions create millionaires.”

If you believe that there is never ending potential to learn new things and grow in your talents, not only will you put yourself in new situations that could help you grow, you will embrace them with eagerness.  Negative feedback is more fuel for growth, not something to be dreaded.

Or, according to Carol Dweck, a professor at Stanford and the author of Mindset, a classic work on motivation and “growth mindset”: “People with a growth mindset believe that a person’s true potential is unknown (and unknowable); that it’s impossible to foresee what can be accomplished with years of passion, toll, and training… Why waste time proving over and over how great you are, when you could be getting better?  Why hide deficiencies instead of overcoming them?  Why look for friends or partners who will just shore up your self-esteem instead of ones who will challenge you to grow?  And why seek out the tried and true instead of experiences that will stretch you?”

References:

  1. https://www.dollarbreak.com/wealth-creation-mindset/
  2. https://justmind.org/mindset-matters-most/

No. 1 Secret to Success, Wealth and Happiness in Life

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“Kindness and generosity are the keys to happiness and prosperity.”Wahei Takeda, president and founder of Takeda Confectionery Co.

Wahei Takeda, president and founder of Takeda Confectionery Co., was considered a truly happy man, and lived by example a life that demonstrated to others what it really meant to live a successful and meaningful life. Often called the “Warren Buffet of Japan”, Takeda was one of the country’s most successful and well-known investors.

The key to a happy and abundant life

Takeda’s philosophy of “maro,” which in Japanese means ‘a sincere heart’, “inner contentment and gratitude are the keys to a happy and abundant life”.

The secret to a happy life isn’t an abundance of wealth, since rarely does anyone says they have too much, or just enough. “Winning a $20 million lottery ticket won’t make you happier,” said Dr. Sanjiv Chopra, a professor of medicine at Harvard Medical School. “Research has shown that after one year, lottery winners go back to their baseline. Some are even less happy.”

Chopra explains the four things that have been scientifically linked to happiness:

1. Relationship with Friends and family

Developing a close bond with people we trust and confide in is essential to our overall well-being. “Choose your friends wisely and celebrate everything small and good with them,” Chopra says.

Researchers have also warned that “loneliness and social isolation can be as damaging to health as smoking 15 cigarettes a day,” whereas friendships can “reduce the risk of mortality or developing certain diseases and can speed recovery in those who fall ill.”

2. Forgiveness

“The ability to forgive frees you from the burdens of hate and other unhealthy emotions that can negatively impact your happiness quotient,” says Chopra.

He cites Nelson Mandela as a hero who truly mastered the art of forgiveness. In 1990, when the legendary freedom fighter emerged from his 27 years of prison, he was asked whether he had any resentment toward his captors.

“I have no bitterness, I have no resentment. Resentment is like drinking poison and then hoping it will kill your enemies,” Mandela responded.

“Resentment is like drinking poison and then hoping it will kill your enemies.”  Nelson Mandela

3. Giving

Chopra says that getting involved with charities and donating money to help others is one of the most fulfilling ways to spend your time and money.  Researchers have suggested that people who volunteer experience greater happiness, higher self-esteem and a lower mortality rate.

A study from the University of Chicago and Northwestern University found that giving, rather than receiving, leads to long-term happiness. In one experiment, 96 participants were given $5 every day for five days — with the option to either spend it on themselves or on others.

“Everyone started off with similar levels of self-reported happiness,” the researchers wrote. “Those who spent money on themselves reported a steady decline in happiness over the five-day period. But happiness didn’t seem to fade for those who gave their money to someone else.”

4. Gratitude

“Gratitude is not only the greatest of virtues, but the parent of all the others.” Roman Orator Marcus Tullius Cicero once

“There’s a wonderful anonymous quote that goes, ‘If you don’t know the language of gratitude, you’ll never be on speaking terms with happiness,’” Chopra says.

Practicing gratitude can be as simple as saying “I’m grateful” at least once a day. In fact, one study from the American Psychological Association found that doing so can help people savor positive experiences, cope with stressful circumstances and strengthen relationships. It will also measurably improve your own overall satisfaction and happiness in your relationships and life.

“Happiness flows not from physical or external conditions, such as bodily pleasures or wealth and power, but from living a life that’s right for your soul, your deepest good.” Socrates

“Taking time to think about what you’re grateful for makes you more aware of the positive things in your life,” says Chopra. As a result, “it makes you less biased by the fewer negative things in your life.”

In a money-obsessed capitalist society, the simplest way to reach a state of happiness, contentment and abundant life is to express gratitude and give to others, instead of always wanting or asking for more. Bottomline, “gratitude is a key to wealth, health, and happiness”.

References:

  1. https://www.cnbc.com/2021/01/25/warren-buffett-of-japan-secret-to-success-happiness-and-wealth-in-life.html
  2. https://www.cnbc.com/2019/05/31/harvard-professor-says-winning-20-million-lottery-wont-make-you-happy-but-heres-what-will.html?updated
  3. https://www.cnbc.com/2019/01/24/saying-this-powerful-phrase-is-the-science-backed-secret-to-a-happy-relationship.html?__source=iosappshare%7Ccom.microsoft.msedge.EMMXShareExtension