That's not to suggest that living in dung huts like the Masai is necessarily a recipe for an earthier equilibrium. But financial advisors can help clients-who by the nature of the industry are far from indigent-to get a better grip on reality about their finances and the role that money can play in their lives. "I've discovered that one of the most important things clients must understand is that money is a tool and not a goal," says Michael Kresh, a fee-based planner in Islandia, N.Y. "People who don't understand that can't possibly be happy with money. If they think it's a goal, then what happens when you achieve it? You'll just want more money."

That notion plugs into hedonic treadmill theory, which basically says that things you do to make yourself happier create only a temporary buzz that wears off and then you return to your inherent base level of happiness. The implication for the relationship between money and happiness is simple: Keeping up with the Joneses is a losing proposition from a psychological and, for the acutely spendthrift, a financial standpoint.

For the record, subsequent reexaminations of the original 1971 theory leave open the possibility that people can indeed make themselves happier by changing certain things in their lives. That said, human nature suggests that pursuing wealth for wealth's sake, what could be called the hedonistic treadmill, won't create long-lasting changes to one's sense of happiness.

Money can be a very complex and emotionally charged concept. "In western society it's ingrained in our sense of identity," says Todd Kashdan, a psychology professor at George Mason University who saw the pursuit of wealth first-hand as a former specialist on the floor of the New York Stock Exchange. "Also, we're bombarded by the mass media with messages telling us what we don't have. There's no message telling us we should be more aware of and appreciative of what we have."

Notwithstanding studies suggesting that Americans' sense of well-being hasn't changed over time despite a rise in national wealth, Kashdan notes that levels of happiness are moderately high at a mean level. What interests him as a researcher is trying to explain the variability in the mean-the motives behind what makes people happy or unhappy. "That's why it's valuable for financial advisors to ask questions not necessarily geared toward acquiring wealth," he says, "but to ascertain the motives and values in a client's life. What do they want on their epitaph?"

That's similar to a question that Scott Kays poses to his clients. "We try to get across the point that you only have a certain amount of time, so what do you want to do with that?" Kays, founder of the fee-based money management firm Kays Financial Advisory Corp. in Atlanta, believes his happiest clients are those who aren't attached to their money. They have a higher purpose in mind such as philanthropy.

Kays says he doesn't practice life planning per se, but he recognizes well-being issues in certain clients, particularly among overspenders. He tells them they're going to run out of money unless they address the underlying issue. He'll broach the problem by trying to find out where they spend their money and why that's important to them. "If a client lets us dwell on the matter, they'll tell us that the spending represents security to them or maybe something else. When they themselves finally recognize the problem they'll sometimes say, 'Wow, I never thought of that.' Then they're fine."

But it's not always that easy. "You start to probe some clients and they're ice cold, so you back off," says Kays.
Kresh tries to emphasize to clients that money, when used properly to achieve a higher goal, is the path to deeper happiness than the actual money itself. He says his firm spends a lot of time counseling clients on family issues and other areas relating to the whole person. "Our job is to help clients solve problems that keep them from being happy," says Kresh, adding that he's reluctant to use the term "happy" because it's a hard concept to define. "I provide the most value and benefit by stepping outside the perceived traditional box of the financial manager and getting involved in life planning issues."

Beyond The Numbers

Bryan Lee, founder of Strategic Financial Planning in Plano, Texas, engages his clients' children in the planning process as a way to nip in the bud potential problems relating to money and well-being. "I think it's important to start early to instill good habits about money," he says.

He'll set up a meeting for the children to attend, and he likes to establish special accounts with the parents where they provide a dollar-for-dollar match for each dollar a child puts into their account. The children can follow the portfolio online, and Lee believes it teaches them the value of money and investing.