Where are we headed? Hopefully, toward happiness!

Have you ever wondered where we came from? Where we’re headed? How to find meaning and happiness? All of the above? While it certainly doesn’t hold all the answers,?Sapiens: A Brief History of Humankind ?does a pretty amazing job at exploring the possibilities!?

I was intrigued by?Sapiens?before I downloaded it onto my Kindle. A New York Times Bestseller, I’d heard about it from other readers, read the reviews, and knew Bill Gates, Mark Zuckerberg, and Barack Obama all name it among their favorites. Even so, as soon as I began reading Yuval Noah Harari’s words, I knew I had entered into something unexpected, refreshing, and wildly enlightening. A brief synopsis can't do?Sapiens?justice, but what I can do is share a few takeaways related to financial planning and living a life filled with meaning and happiness. (A lofty but worthy goal!) Here goes…

‘Shared fictions’ and why they matter. Harari believes almost everything that drives how society thinks and acts is based on fiction. It sounds nonsensical—until he explains it in simple terms. His premise is that most of the tenets that are the basis of society don’t exist in nature. And because of that surprising truth, a successful society relies on our ability to create what he calls ‘shared fictions’—commonly held beliefs in fictional entities, including individual rights and this biggie: the power of money.

Most of us understand the concept that money is a human creation. We know that the money in our wallets, in our bank accounts, and in our portfolios is, at least at some level, completely fictional. We also know that unless banks and retailers and society as a whole agree that our money represents value, our dollar bills are just meaningless pieces of paper. We can agree that money is a ‘shared fiction’ that establishes trust. And yet, as governments continue to print money at a frenzied pace, the idea that we are simply ‘printing wealth’ can send our human brains spinning.

Harari points out that our ‘shared fiction’ of money is no different than our ‘shared fiction’ of the existence of a God and a promised afterlife, which has driven our moral code for centuries. While religion certainly remains a strong force in today’s society, Harari argues that some of the most important ‘shared fictions’ in modern society include our morals, our political systems, and our overwhelming belief in the free market—all of which are vital for homo sapiens’ continued success.

The takeaway: While the idea of ‘shared fictions’ may sound like we’re all living in a fantasyland, it is these fictional creations that form the basis for society as we know it—and make it possible for our species to operate efficiently.

The happiness equation

One of our biggest ‘shared fictions’ of all, says Harari, is the idea that money equals happiness. From what he writes, I see the real happiness equation not as?Money = Happiness, but instead:

Happiness = Reality ÷ Expectations + Meaning

As a financial advisor, this one hit home. While it’s easy to believe that happiness is something we achieve when we have?things?we value—a gorgeous home, a luxury car, or accumulated wealth—that is only true if our expectations align with our reality. What if our expectations were completely different? What if living in a safe neighborhood and having food and water every day were our key expectations? What if being healthy was at the top of the list? Suddenly our level of happiness would look very different.?(My blog post?Money really can buy happiness ?sounds like a contradiction to this idea, but it isn’t!)?

Harari goes on to talk about the connection between happiness and meaning. He writes,?“The scientist who says her life is meaningful because she increases the store of human knowledge, the soldier who declares that his life is meaningful because he fights to defend his homeland, and the entrepreneur who finds meaning in building a new company are no less delusional than their medieval counterparts who found meaning in reading scriptures, going on a crusade or building a new cathedral.” Nietzsche would certainly agree. His famous words: “He who has a why to live for can bear almost any how,” make it clear that our ‘why’ is part of the happiness equation. Our ‘why’ gives us meaning, and only when our ‘why’ and our ‘how’ enable us to meet our expectations can we be truly happy.

The takeaway:?While some ‘shared fictions’ do help us succeed, the myth that money equals happiness does not. We achieve happiness when expectations and reality are aligned, and when our ‘why’ gives life meaning. When these factors aren’t in place, we are more likely to be miserable—no matter how much money we may have.?

The risk of redefining of luxury

What is a luxury? What is a necessity? Throughout the book, Harari discusses how, time and time again, we homo sapiens transform our luxuries into necessities. We began farming wheat so we could stop living as nomads, but this ‘luxury’ became a necessity to maintain our new lifestyle. We began writing to share stories and information from generation to generation, but this ‘luxury’ became a necessity for nearly everything, and, Harari posits, has changed the way we think. A similar transition is taking place today as we watch ‘luxuries’ like smartphones, computers, and AI-enabled devices change how we live, work, play—and think.

In the world of financial planning, I talk to so many people who risk their financial health because they redefine ‘luxuries’ as necessities. Parents risk their retirement savings because they see sending their kids to expensive, private schools as a ‘necessity.’ Couples risk depleting their savings because they believe buying a better house in the most affluent community is a ‘necessity.’ Retirees put their nest egg at risk because they’ve bought into the idea that taking their kids and grandkids on a ‘once-in-a-lifetime’ vacation is a necessity.

The takeaway: We homo sapiens are incredibly skilled at turning?‘luxuries’ into ‘necessities.’ When this shift is the result of major changes like the agricultural and scientific revolutions, it may be beneficial. But when this shift is personal—driving people to acquire luxuries that they can ill afford—it threatens their financial wellbeing.

Of course,?Sapiens?covers so much more. (It is “A Brief History of Humankind” after all!) If you want to take a fresh look at where we came from, how we got where we are today, and where we’re heading tomorrow, it’s a wonderful, insightful read. And if you need a helping hand figuring out your own happiness equation, I’m happy to help!