I’ve known many financially successful individuals throughout my lifetime. It’s incredibly easy to get caught up in the idea that more money will make you happier. After all, more is better than less isn’t it? The irony of life, is the harsh reality of it. Money can remove unhappiness and relieve stress but overall does not have a large impact on day-to-day happiness. If it did, you would think that the celebrities you read about who blew up their lives and are living in misery would be happier than us. But the law of diminishing returns and hedonic adaptation can be easy to understand but hard to accept. 

The most dangerous assumption to carry, in my opinion, is the idea that more money = more happiness. It certainly doesn’t hurt to have a larger nest egg, but I’ve seen money come with a range of problems. 

One individual I met (we will call them Jane) was an extremely intelligent lawyer who was a partner at a small firm. Jane made very good money. However, in her mind it wasn’t a lot. She knew people she worked with who were far wealthier. This became a big source of misery for her. She ended up taking it out on her family and friends and burning bridges in her personal life. Behaviorally, we can see that although reality shows she is by all metrics (successful) in her career, due to social comparison and an inflated sense of self, she robbed herself of enjoying the fruits of her labor. In this situation I would define a loose equation for happiness as:

**Happiness = Income - expectations**

_by inputting your numbers you can see where you fall on the happiness spectrum._


**Jane’s Happiness**

>$150,000 (income) - $170,000 (expectations) = negative (happiness)

One other individual I met (we will call him Steve) was Jane’s boyfriend and an extremely content individual. He loved his office job. He was less financially successful than Jane, but much happier. He always underspent his income, had low expectations, and was intrinsically motivated to work hard for himself and his team. His hobbies were inexpensive and valued relationships over material goods. They were financially incompatible individuals which later showed when they broke up. 


**Steve’s Happiness**

>$90,000 (income) - $60,000 (expectations) = positive (happiness)

It is extremely easy for an individual to attribute their financial success solely to their skill or intellect and ignore or dismiss any factors that were outside of their control. Some factors being: who they were born to, the people they met in their career, their ability to pay for expensive schooling, etc. Successful individuals can quickly fall into the trap of falsely assuming that their financial success was solely due to their abilities. This is a prime example of survivorship bias and overconfidence and can lead to successful individuals perceiving themselves as subsequently better than less successful individuals and inadequate in respect to their peers.

Money as financial writer Morgan Housel put it is “[The Greatest Show on Earth](https://collabfund.com/blog/investing-the-greatest-show-on-earth/)” and reveals a lot about human nature and behavior. Re-examining your beliefs around money is incredibly important. There are so many ways to view it. Some people view money as a tool to build and live a better life, while as others use it as a benchmark of success to compare themselves against others. Your relationship with money will have a huge impact on your day to day happiness. 

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Exploring the relationship between money and happiness.

Money and Happiness

While many view patience as "taking things slow", the truth is that patience has nothing to do with speed and everything to do with mindset. Practicing patience as an investor is vital for long term financial health and well being. Here is how we can all be The Patient Investor.

>Investant Definition of Patience: "The ability to endure stressful and uncomfortable circumstances **with calmness**."

### Market In Distress

Whether the market is trending up or down, the patient investor will make consistent contributions and trust the process.

It can be difficult to keep calm in turbulent markets - especially when the majority of our wealth is held in securities and instruments directly tied to market performance. This is why our recommended approach to personal finance management - including holding 3 to 6 months of expenses in a high yield savings account ([HYSA](https://investant.net/blog/TheHighYieldSavingsAccountIn2024)) - is intended to help alleviate any stress from investments. The patient investor is not worried about short term market movement as they can be confident they are properly positioned for long term financial health.

[Read More](https://investant.net/blog/CreatingaFinancialSystemforyourMoney) About The Investant Approach To Personal Finance Management

### Set Up For Success

As mentioned earlier, the patient investor is setup with a financial system that promotes long term confidence. While those with strong patience can maintain the calm in any environment, it helps to create an environment with peace in mind. In our day to day lives, this might mean choosing to take the back roads instead of the highway every now and then or staying in on a Friday night. In personal finance, this can be created by having a healthy savings and refraining from keeping all your eggs in one basket.

When you have a healthy savings, it's not worrisome when the car needs to be repaired or the hot water heater needs to be replaced. If you lose your job, you're prepared! The day to day stress of these life events don't weigh over you because your financial system accounts for the bad just as much as it does the good.

### Investant Can Help

At Investant, we're committed to shedding light on the best practices for new professionals to find long term financial success! Join our newsletter and follow us on [Twitter/X](https://twitter.com/InvestantGroup) for more!

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Practicing patience as an investor is vital for long term financial health and well being.

The Patient Investor

Worrying about finances can be mentally taxing. More people spend hours micromanaging their finances than they do enjoying the things they love. In this blog post, we will be walking through how to set up a system that works for you so you can spend less time focusing on money management, and more time on the things you love. Here is a personal finance waterfall that you can implement into your financial system.

### 401k
If you have a 401k through your company, the money contributed to this account will be taken out of your paycheck before the money hits your checking account. It is recommended that you contribute up to the employer match if your employer offers one (more if you're able). Check with your HR department to get this set up. 

### Checking Account
The first account we will start with is a Checking account. This will be your financial “home base.” On payday, your salary will be deposited into your checking account, and from there we will tell our money where to go. You can use any traditional or online bank for this account.

### High-Yield Savings Account
The next account type that we want is a “high-yield savings account.” This account will be your emergency fund. It is recommended that you keep 3-6 months of living expenses in this account in case you lose your job or your car breaks down. You can also save up for big purchases here, as this account will earn more interest than your checking account. You will set up a recurring transfer to this account and fund this first before moving on to investments. I personally use Wealthfront for my HYSA (high-yield savings account). 

### ROTH or Traditional IRA
If you are in a low tax bracket, a ROTH IRA will be the next account you’ll want to contribute to. Contribute as much as you can afford, the goal is to have monthly transfers going into this account. You can later up the amount you contribute as you earn more money later in your career. I personally use Vanguard for my ROTH IRA. You'll need to set up recurring transfers on the platform your ROTH is on and link your checking account to the platform. 

### HSA
If you are young and healthy you may want to consider sending money to a HSA. This account requires you to have a high deductible health plan but is triple tax-advantaged. You can contribute extra money here for medical expenses and some HSAs allow you to invest and grow your money tax-free. This can be used as an additional retirement account as well. Talk to your HR department to see if your company offers an HSA and ask them how to enroll. 

> Here is an example of the financial system I use for my own money.

![Personal Finance Waterfall](https://res.cloudinary.com/dnmr13rcg/image/upload/v1725229248/Artboard_1_78986396c8.png)

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Create a financial system and automate your money.