(Dow Jones) Spencer Sherman, the co-founder of Abacus Wealth in Sebastopol, Calif., and author of the recent book "The Cure for Money Madness," has long counseled his clients to build wealth by living in the present and shedding the financial hang-ups that slow them down. His advice, which might be called Zen money maintenance, is often unconventional-though it's rooted in the sensible investment strategy of buying and holding diversified index funds.

He wasn't always that way. "I started out thinking my MBA from the Wharton School made me a genius," he says. "I thought I could pick stocks and beat the indexes, and by 'doing something' for my clients I could justify my fees. So I was constantly maneuvering."

Eventually he realized what many studies have shown: After paying broker fees, stock pickers don't consistently beat passive index funds. "I had to let go of trying to look good," he recalls. "And I'd just have to take it on the chin if my clients left me. But they haven't left me."

They stick around, presumably, because Sherman's epiphany on passive investing brought him greater clarity on how and why money makes people (and their financial advisers) so crazy. Now, instead of obsessing over price-to-earnings ratios, he helps clients feel comfortable with what they already have. "I have had so many clients tell me that if they only had more money everything would be OK," he says. "I tell them that's a fantasy."

It's not that Sherman doesn't want his clients' nest eggs to grow. Rather he believes that when people are content, they will spend less, save more, and ultimately have more.

"I start by asking clients to look at their earning potential," he says. "If you earn just $50,000 a year, over 20 years that's $1 million coming in. You're going to save some of that, maybe a lot of that. It's your choice.

"Then I help people imagine how they can have today what they think they want in 20 years. For example, I had a client who said her dream was to have a personal chef when she retired. I asked her how she could make that happen right now. Well, she found out you can hire a personal chef pretty cheaply in India. So she moved to India. Changed her life."

Another client, a single woman whose children were grown, envisioned owning several vacation homes. "She wanted a place on the coast, a place in the mountains, one in the city," says Sherman. "But she had probably $1.2 million in net worth, and she was living off the money. So it wasn't enough. Even if we could make it all happen, her entire portfolio would be in real estate, and she'd have to forage for food in her backyards. But the more I talked to her, the more she complained about all the headaches of taking care of her current house. I told her, 'You need fewer houses, not more! Instead of buying more places, why not sell your house and try out a few different rentals?'"

The client did just that-and convinced the buyer of her house to let her rent the in-law apartment in the back, so she didn't even have to move. Meanwhile, she rents two other homes for parts of the year. "It's allowed her to focus on what's really important in her life," says Sherman, noting that the woman is now working part-time as a caterer, preserving her investments, and enjoying vacation homes she doesn't have to worry about.

"If I can get clients to feel a sense of sufficiency right now, I've succeeded," says Sherman. "As financial advisors we've trained people to constantly imagine this wonderful future date. But in fact, you have the greatest opportunity for freedom and happiness in this moment."

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