Happy Friday.
Another day, another record for the Dow. If it wasn't so much fun seeing stocks rise, it would get boring.
The oil price also jumped, with West Texas Intermediate or WTI, settling at a 16-month high of $US108 a barrel… all of which could spell more good news for my speculative ASX oil explorer, already up 50% in the last 3 weeks.
More on that below…
Happy Birthday, Motley Fool
It's our birthday!
It was 20 years ago this month that two brothers not long out of university set out to produce an investing newsletter for their friends and family.
The newsletter, and the company It had a strange name — The Motley Fool.
Eschewing the accepted wisdom, the brothers didn't call the company Gardner & Gardner, Solid Rock Investments or Smart Bull Hedge Leverage Capital Inc.
Instead, from the very start, David and Tom Gardner set out to blaze a new path.
They wanted to bring something new to investors — a new way of investing, without conflicted advice, high fees or technical jargon.
This month, The Motley Fool is 20 years old.
I have been privileged and honoured to have been with the company for 16 years, first setting up the Fool UK business in 1997, and in recent years, The Motley Fool Australia.
As a company, we're proud of reaching the 20-year milestone, and (hopefully with some justification) proud of the work we're doing.
The past is just that, though — it's the future that matters to us, and readers, and our members.
We'll continue to bring you Foolish Investing ideas and advice — we aim to beat the market, help you invest better, and have a little fun along the way.
Looking ahead, through this increasingly popular free Take Stock email and our subscription-only Motley Fool Share Advisor stock-picking newsletter, whatever the market is doing, we aim to provide you with many great reasons to stick around as we embark on our next 20 years of Foolish Investing.
Up 50% in a 3 weeks — my one stock for "the next great resources boom"
I couldn't let the day go by without reminding Take Stock readers of the performance of my one stock for "the next great resources boom."
It was precisely 3 weeks ago to the day when I unveiled Buru Energy (ASX: BRU) as my latest high-risk energy stock.
Just to be clear, Buru isn't a stock we'd recommend in our 'best of the best' Motley Fool Share Advisor subscription-only service, but I enjoy a little risk and couldn't resist adding them to my diversified SMSF.
Well, knock me over with James Pattinson bouncer, but the stock has soared a whopping 50% in the last three weeks, giving my SMSF a nice pick-up, along with my ego.
I've been in this investing game far too long to get carried away with share price movements over a period as ridiculously short as three weeks.
Still, I am feeling pretty pleased with myself… a feeling I hope will be replicated cheering on the Aussie cricketers again tonight.
We're taking a day out of the Fool office today to celebrate our 20th birthday, so I'm going to hand over to colleague Morgan Housel for the rest of today's gripping Take Stock.
As ever, I'm sure you'll find his writing engaging, educational and thought provoking.
Be Happy With Your Money
by Morgan Housel
Kurt Vonnegut and novelist Joseph Heller were once allegedly at a party hosted by a billionaire hedge fund manager. Vonnegut mentioned that their wealthy host made more money in one day than Heller ever made from his novel Catch-22.
Heller responded: "Yes, but I have something he will never have: enough."
Whether it's true or not, I've always thought this to be one of the smartest finance stories ever told.
All throughout college, I had one career plan: investment banking.
The industry was attractive to me, and thousands of other students blinded by a lack of life experience, for one reason: You can make a lot of money.
Six figures right out of school, and millions later in your career.
It's a miserable life
There's just one catch. Your life becomes abjectly miserable.
One-hundred-hour work weeks, the most pressure you've ever experienced, and less exposure to sunlight than death row inmates.
They had a saying: "If you don't come to work on Saturday, don't bother coming back on Sunday."
The senior bosses were worth millions, but stressed, overweight, anxious, never saw their kids, and hadn't taken a vacation in years — I'm unfairly generalising, but only slightly.
Almost no one actually enjoys it. I quickly cried uncle, moved on, and never looked back.
In his book 30 Lessons for Living, gerontologist Karl Pillemer interviewed 1,000 elderly Americans (most in their 80s and 90s), seeking wisdom from those with the most experience. One quote from the book stuck out:
No one — not a single person out of a thousand — said that to be happy you should try to work as hard as you can to make money to buy the things you want.
No one — not a single person — said it's important to be at least as wealthy as the people around you, and if you have more than they do it's real success.
No one — not a single person — said you should choose your work based on your desired future earning power.
Money IS important, but…
The elderly didn't say that money isn't important.
They didn't even rule out that more money might have made them happier. They just seemed to understand the concept of enough.
Studies show that money does increase happiness. The latest research shows there's not even a known satiation point — a higher income makes virtually everyone happier, although each additional dollar delivers less happiness than the one before it.
But we tend to overestimate money's potential on our happiness by thinking of it out of context.
Daniel Kahneman, a psychologist who won the Nobel Prize in economics, writes in the book This Will Make You Smarter:
On average, individuals with high incomes are in a better mood than people with lower income, but the difference is about a third as large as most people expect. When you think of rich and poor people, your thoughts are inevitably focused on circumstances in which income is important. But happiness depends on other factors more than it depends on income.
Big swinging incomes
In other words, young investment bankers assume a big income will make them happier because they think about a nice house and fancy cars, not working until 4 a.m. and having no social life.
In a New York Times column three years ago, David Brooks put a twist on this thinking by analysing the life of actress Sandra Bullock. He wrote:
Two things happened to Sandra Bullock this month. First, she won an Academy Award for best actress.
Then came the news reports claiming that her husband is an adulterous jerk.
So the philosophic question of the day is: Would you take that as a deal? Would you exchange a tremendous professional triumph for a severe personal blow?
"If you had to take more than three seconds to think about this question, you are absolutely crazy." Brooks concludes.
But for the same reason investment bankers choose a miserable life while assuming money will make them happier, I'm willing to bet many otherwise happy people would have gladly changed shoes with Bullock three years ago.
Research is clear that some things completely override any happiness that can be gained from money or work success.
It's just hard to realise that because money is tangible, measurable, and universal, whereas the "other factors" Kahneman mentions that have a greater impact on our happiness are vague and nuanced.
What are those "other factors" Kahneman mentions?
Four ways to be happier than having "more money"
The field of positive psychology studies what makes people happy. It's a young and constantly changing field, but researchers broadly agree that four major points have a big impact on making people happy:
- Control over what you're doing.
- Progress in what you're pursuing.
- Connections to other people.
- Having purpose and meaning.
That's it.
You'll notice "more money" isn't on the list. But you can easily see how money ties into these points.
Money can grant you freedom from a nine-to-five job, offering control over what you're doing.
It can provide the tools necessary to achieve progress in whatever you're pursuing.
It can afford you time off to and a chance to spend time with other people.
It can give you the ability to provide for people other than yourself, bringing meaning and purpose.
Money can't buy you happiness
To the extent that money can buy happiness, most of us would do better to think of how it can help us achieve these four points.
Everyone is different, though. So I want to you to think about…
— How much is enough money?
— Are you there?
— Will you ever get there?
— Do you even want to?
Happiness is a rising stock portfolio. But there is much, much, more to life.
Everyone dies. But not everyone lives.
Live life, Fools.
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Of the companies mentioned above, Bruce Jackson has an interest in Buru Energy.
