Happiness Formula

The idea would be to create a simple formula for troubleshooting your life and improving your happiness. On page one would be this top formula.

Happiness = health + money + social life + meaning

The rest of the book would be nested formulas that further explain each component of happiness. For example…

Health = sleep + diet + exercise

And then down another level…

Sleep = schedule + technique

And down another level until it starts getting practical…

Sleep Technique = consistent bedtime and waking time + no reading or TV in bed + no booze or caffeine…

And so on.

To make the Happiness Formulas extra useful, the highest priorities would appear first (leftmost) in the formula. For example, in the top Happiness Formula (Happiness = health + money + social life + meaning), health is a higher priority than money, which is a higher priority than social life, etc.

I realize you’ll argue with my ranking of priorities and point out all the exceptions. For example, if you have no money, you can’t afford to be healthy. But the formula only shows priorities, not absolutes. Obviously you always need a source of money, but the priority list shows that you shouldn’t take a job with high pay that will significantly affect your health. It makes more sense to get healthy and then leverage your health to get the best job. (Healthy looking people land better jobs and are more highly paid. Their brains work better too, and they have more energy.)

I rank money higher than social life or meaning because once you have money, those other things are easier to get. For example, you won’t have much of a social life if you can’t afford to do anything. And you can’t make money if your health is a mess.

You might wonder how something like “money” can be broken down into a formula so easily that someone could just follow it to get more. I think it can be done.

Money = Income + investments

Investments = (See my 9-point investment plan below that has been endorsed by economists.)

Scott’s 9-Point Investment Plan

Do these steps in the order shown…
1. Make a will

2. Pay off your credit cards

3. Get term life insurance if you have a family to support

4. Fund your 401k to the maximum

5. Fund your IRA to the maximum

6. Buy a house if you want to live in a house and can afford it

7. Put six months worth of expenses in a money-market account

8. Take whatever money is left over and invest 70% in a stock index fund and 30% in a bond fund through any discount broker and never touch it until retirement

9. If any of this confuses you, or you have something special going on (retirement, college planning, tax issues), hire a fee-based financial planner, not one who charges a percentage of your portfolio

Part of the reason I don’t turn The Happiness Formula into a book is that it would only be about 20 pages long. Its power is in its brevity, and brevity is not rewarded in our economy. If the best book in the world was only 20 pages long, no one would buy it. They’d stand in Borders and read it cover to cover.

So I won’t be writing that book. Maybe it needs to be a wiki project.

Happiness for Sale

If money can’t buy true love, at least it can pay for a nice dinner out. But what about happiness? In an editorial observer last month, I noted that many scholars studying happiness agree that it cannot: growing incomes don’t make happiness grow. Now there is some evidence that this time-honored conclusion could be wrong. Recent analyses of polling data on life satisfaction across the world suggest that countries may indeed become happier as they grow richer.

The economic growth-doesn’t-buy-happiness argument is also known as the Easterlin paradox for the economist Richard A. Easterlin. In 1974, he published research suggesting that despite stellar economic growth in the United States since World War II, “higher income was not systematically accompanied by greater happiness.” Mr. Easterlin later found that people were no happier in Japan in 1987 than in 1958, despite a fivefold jump in incomes. Other economists found similar patterns in other countries.

This conclusion confounds a core economic belief that underpins a lot of policy-making around the world: that economic growth is an effective way to increase well-being. Some economists and psychologists suggest this thinking, unexpected if not downright ungrateful, might be due to adaptation. As people become richer, they raise their expectations — becoming envious of a new, richer crowd.

Recent research, however, suggests there might not be a paradox after all. Using many polls that span several decades, Justin Wolfers, a professor at the Wharton School at the University of Pennsylvania, found that in many countries, growing incomes have been accompanied by increasing happiness.

This is not to say the hippies were wrong. Many other factors, including how we use our time and the quality of our relationships, affect happiness. Moreover, the correlation between rising incomes and increasing happiness is much more striking in poor countries — where even a marginal improvement in the quality of life stands out — than in rich ones.

Any challenge to the Easterlin paradox is likely to be disappointing to those of us in search of scientific backing for the urge to drop out of the rat race and play the guitar. It is reassuring to find that effective policies to improve economic growth and boost the incomes of the less fortunate would make their lives not only easier but apparently also happier.