Happiness leads to more wealth, a fact that financial advisors should be aware of, says Jean Chatzky, author and journalist on finances and behavior.
“On a happiness scale of one to 10, you want your clients to be an eight,” so they have some room to strive, says Chatzky, who is finance editor for NBC’s Today show and host of RLTV’s Money Matters with Jean Chatzky. She has written eight books, including the New York Times best-seller Money 911: Your Most Pressing Money Questions Answered.
Chatzky surveyed 500 successful people to see what they do differently from not-so-successful people and found that the successful are happier and that the happiness led to success, rather than the other way around. Right now, people should not be as unsure as they seem to be when it comes to their financial outlook.
“In September, the real median income, which is $59,039 according to the U.S. Census Bureau, finally surpassed the 2007 level,” she says. Chatzky was a keynote speaker at the Financial Planning Association annual conference in Nashville.
U.S. citizens’ savings rate, which fluctuates widely, has not reflected that happy statistic. In the mid-1980s, people were saving on average 10 percent of salary, but by 2005 people were spending more than they made. Calculated this past summer, people were saving 3 percent to 4 percent.
Read Jean Chatzky's comments on women advisors
Read Jean Chatzky's advice on female clients
Advisors can help boost that number by having clients visualize what their retirement will look like. Where do they want to live and in what kind of house? What kind of activities do they want to be able to do?
”In that way, it is easier to put money away for a future reward,” she says.
In addition to being happier, successful people are more resilient, better able to adjust to misfortune, and more passionate about their work. “It is a difference between having a job or a career or a calling.”