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2024 is now underway and all of your aspirational resolutions for this year will soon be tested. Most New Years’ resolutions fall within the broad categories of health, wealth, and happiness. But how do you really know if accomplishing these things will make you healthier, wealthier, or happier?
Let’s start with health. You can’t control every aspect of your overall health, but you can have a direct impact on many of the important components. You’ve probably noticed that gyms are packed at the start of each year with people with good intentions about achieving better health. As the weeks wane on, the crowds subside as these intentions meet reality.
Because of this high attrition rate, some personal trainers avoid accepting new clients in the beginning months of the year. Good health habits can start anytime, not just in January. Sustaining your good health habits in the months beyond January is the key.
Without a doubt, good health and overall happiness are connected. It’s nearly impossible to have one without the other.
Wealth resolutions tend to be concrete. You want to save x percent of your income or spend y toward some long-term financial goal. Just like health, wealth creation depends upon good habits that can be sustained over time.
Money has two sides: the saving side and the spending side. Without savings, you’ll likely never accumulate wealth. With too much spending, you’ll also have difficulty accumulating wealth. Be careful of the “peacock feathers” of life, those nice and costly things that no one, (but you), cares about.
In my experience, one of the most pervasive and damaging money habits is trying to “engineer” future financial outcomes. While your money and wealth are known and measurable today, what will happen in the future is impossible to forecast. Your life is dynamic and there will be many twists and turns along the way that you can’t know today. You don’t have a crystal ball (and neither does anyone else).
What’s important is to align your financial life with your happiness. A large component of happiness is related to your perspective on what you expect versus what you need. The difference between your expectations and reality is sometimes called the happiness gap.
A major reason that happiness tends to be fleeting is the psychological burden associated with ever-changing expectations. You experience money and wealth emotionally. The primary way that you emotionally measure wealth and happiness is to compare your wealth to others in your social circle. Obviously, that’s a dangerous game. Envy is a difficult emotion to control and can wreck your long-term financial plan.
The difference between your expectations and reality is sometimes referred to as “the happiness gap.” This gap can be closed by modifying your expectations if they are unrealistic.
Health, wealth, and happiness are always worthy goals. Consider focusing on how much you can change the trajectory in your areas of emphasis instead of just absolute metrics.
Related: Investors: Beware of Shiny Objects