Dollar bill with a happy face
Illustration: David Pohl
Long ago, so long ago that I was practically still a gill-breather, I noticed a magazine ad that claimed the average person earns $700,000 over an entire lifetime. I have no idea how they came to that number, but I never forgot the words splashed in big, bold letters across the page:

WHAT WILL YOU DO WITH YOUR $700,000?

I was lucky to encounter this question so early on, because it's lurked in my mind ever since, reminding me that I want to spend my life's earnings creating the most satisfying experiences I can. That might mean buying and using certain objects, paying someone for life-enhancing services, or donating to good causes.

This is a type of wealth management, but the wealth isn't money; it's happiness. And to reap as much of it as possible, I've come up with a little system to maximize the joy dividend in all my money decisions. This strategy may sound odd to actual financial advisers, but when I've ignored it—even to make what appear to be fiscally sound choices—my joie de vivre has declined. I've learned that sticking to my rules makes things turn out far better, and I'm hoping that if you adopt this system, it will work for you, too.

Calculating Satisfaction

My financial planning starts with temporarily ignoring the market value of an item and assessing its "psychic value." This isn't as mysterious as it sounds. Economists use the term psychic income to represent the satisfaction we get from a product or experience. To calculate the psychic value of an item, you just need to ask, "How would purchasing this thing affect my life?" The answer will vary wildly from person to person. For example, I've found that real diamonds give me not one whit more satisfaction than fake ones. If you're scandalized by this confession, real diamonds must matter to you. For you, wearing even the nicest zirconium may feel like a shameful lie. I don't understand this, but I accept it.

On the other hand, when my golden retriever's knees gave out, I paid $12,000 for their surgical repair without a second thought. Even a cursory financial assessment would reveal that this dog produces no useful goods or services whatsoever, and that instead of having him bionically enhanced, I should have whacked him over the head with a shovel. But Bjorn is to me what diamonds are to whoever wrote that song: a girl's best friend.

My point is that psychic value comes from our unique inner responses, which means you need to get in touch with your own heart's desires. You might learn that you value (or devalue) something simply because others do, but I think you'll find you already know what you consider the psychic value of everything—all the way from worthless to priceless.

Introducing the money matrix...

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