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What are the components that go into living a good life? Modern self-help books along with philosophy, religion, and economics all grapple with this age-old query.
If more money always made you happier, there would be no need to look more carefully at this question. In reality, living a good life starts with your life choices. Making good choices means acknowledging how these choices impact not just you, but others around you.
When you make choices that are in your best interest, that doesn’t mean those choices necessarily are selfish. Author Nick Murray says the key to a good life is “to do good; to do well by doing good; to be happy doing well by doing good.”
WHY YOUR CHOICES MATTER
Your life, good or not so good, is the sum total of all the small decisions that you make. Not every small decision contributes to your happiness, but you usually think it does. It’s easy to let short-term urges overwhelm your core values and long-term aspirations.
Think about the choices that you make every day. Perhaps you need to sell something and decide to price the item above the market price. Someone offers you full price for the item. You certainly acted in your best interest, but the purchaser also received something they valued at a price that they deemed fair. Houses, cars, boats, antiques, and other items are sold every day in this format. Were you selfish? Did you act morally?
18th-century economist Adam Smith described how to reconcile feelings and actions in his first book, The Theory of Moral Sentiments. Smith describes an imaginary figure he calls the impartial spectator who helps you consider the morality of your decisions. In the broadest sense, the impartial spectator is a proxy for your conscience.
The impartial spectator reminds you that your decisions impact others; you aren’t the center of the universe.
The impartial spectator also helps you pay attention to what matters most in your life. You get better at life and start living a good life when you focus on things that actually matter instead of all the errant noise.
Adam Smith has a few words about happiness as well. In his 18th-century prose, he writes, “Man naturally desires, not only to be loved, but to be lovely. “In Smith’s era, lovely meant worthy of love…loveable.
Happiness is derived directly from being loved and loveable. Being loveable requires you to be true, to be authentic. You attract love by being you, not by pretending to be someone else.
HOW FINANCIAL PLANNING HELPS
Living a good and happy life is a central theme of personal financial planning. Your lifetime financial goals should fully integrate with your values. What matters most to you likely differs substantially from your neighbors, friends, and colleagues. The financial planning process helps you reaffirm your aspirations. You usually can’t muster the motivation to make needed tradeoffs unless the goals are your own.
The modern economic world involves interactions with hundreds of people each day that you don’t know and will never meet. From the electricity in your home to the roads you drive on to the internet communications, your social circle is larger and more impersonal than in earlier generations.
Living a good life means caring most for the people that are most important to you. By doing good to those closest to you, you open up the possibility of doing good to those farther away. Start there. Ready for a real conversation?
Related: Financial Decisions: Do Your Expectations Mesh With Reality?