Paying for adult children

Posted on March 16, 2011 by Kim Stephenson

 

I was asked to do some radio interviews  today.  Some research funded by the Coventry Building Society showed how much money parents are actually likely to pay for children for things like a deposit on a house, university fees, weddings etc. – things that happen after the children have become adults.  Interviewers wanted to know whether it was a surprise that the amounts were incredibly high, why the parents were (in the main) surprised and unprepared for how high the costs were, and what parents could do about it. 


Here’s a summary of the main points.


  • Most parents naturally want to look after their children.  That doesn’t alter just because the children are “grown up”.   Since the last World War, the UK has gone very much towards owning property not renting it (unlike most of the rest of Europe) and a far greater proportion of people go to university.  So there tend to be greater financial demands on parents.  At the same time less people leave school, get a job and start contributing to the household at 14 (they have to stay at school and there aren’t many jobs) and the parents don’t tend to work all their lives, retire at 65 and promptly die – so there is a lot longer to provide for both parents and children, and less money coming in. 

  • For the 20 years or so up to 2008, it was thought that house prices would always go up (although that was always a questionable attitude).  It was also assumed that credit would always be easy.  So it didn’t seem to matter that parent’s weren’t prepared, if the house you’d bought for £50,000 was now worth £400,000, there was no problem borrowing £50,000 to support the children, to get them through university, to give them a hand to get on the “property ladder” themselves.

  • So that’s part of the reason for one surprise – it isn’t so easy to get the money at short notice.  And we need more than we expected. 


  • Another suprise is in the reason that we need more than we expected.  One psychological tendency of people is a difficulty with ‘deferring gratification’ – we tend to focus and spend money on what we want now, not think of future needs.  It’s the same sort of thing as sitting on the sofa, eating chips or ice cream and watching TV, instead of having a salad and going for a brisk training run.  We know that (with food) the ice cream is nice and the run unpleasant, and we know that (with money) an extra pair of shoes or a better phone is more fun than a savings account.  Of course, in twenty years, we’ll be fat, unfit, have a heart condition and diabetes, and we won’t have any money (although we will have more shoes than Imelda Marcos and will have 27 phones).  But that is 20 years away – and what we want, we want right now.

  



So what do we do about it?


  • First of all, paraphrase JFK


  • Ask not what I can do for money, ask what my money can do for me

 

In other words – stop keeping up with the Jones’s, forget about “must make money”, start thinking about your money as a tool and use it to get what you really want.


  • Secondly, remember another effect, called the ‘money illusion’ in psychology, that we’re not good at allowing for inflation or compound interest.  Small savings in early years end up being worth a lot more than big savings later on, but we don’t usually recognise it.

 

So even if you can only put away £5 a week or something, in 20 years that will be worth a lot more than saying – “it’s only £5, it isn’t much, I’ll leave it until I can save a decent amount”.  If you leave it 10 years, then even if you save masses from then on, you’ll still have more at the 20 year point if you started saving earlier and didn’t increase the amount than if you left it later to start and saved a lot more each week or month. 


  • Thirdly, we tend to keep to our status quo (which is not to do with the band!).  If we think ‘I’ll save next month’, our status quo is not being a saver, we never save.  However, if we start saving now, next month our status quo is that we are a saver, so we continue saving and are much better prepared for any future commitments.


You will have habits like that.  You will habitually put the same arm into a jacket when you put it on, you habitually put on your shoes in the same order each day.  Humans are like that, it saves a lot of effort making decisions every day.  And if your mind set is “I will save at the end of the month, if I have some money”, you won’t save, because you won’t have money left to save after you’ve spent, and you are not a saver.  If you decide, “I’ll save now” you might end the month eating beans on toast because we can always spend what we’ve got left after saving, but you will save.  And from then on, you are a saver, that is your habit, and that means you’ll put money away.

.


What you’ll use that money for is up to you – but if you think about your values, it will probably be on something important, like your children’s education, rather than something that is nice at the moment, like a bag of chips!

Posted in Children, Current financial events | Leave a comment

Radio times

Posted on March 16, 2011 by Kim Stephenson

 

There are some data out today about the cost to parents of their children, specifically their “adult” children. 


 I’ve been doing a few radio interviews about the psychology of this – why it comes as a shock to people that they will potentially pay so much for adult children, whether it is possible to save for it, why it is so difficult to save and, probably most important, how you can do it!


I’ll do a post about what I’ve said to summarise it, but if you’re in the appropriate regions you might catch (or might want to catch) the broadcasts.  Most were recorded for today, but some will go out this week, up to Saturday.


There are interviews with BBC Coventry and Warwickshire, Jack FM, Mercia (which I believe gets syndicated or passed on to other stations such as Gem Radio and Beacon & Wyvern) and there’s one on Radio 5 live today.


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Single sex rates and single cell brains

Posted on March 2, 2011 by Kim Stephenson


It would be nice if politicians had to have some qualifications.  It might mean they could think through problems. 


Men and women have some different attitudes in general.  It’s not that one is better than the other, it is just that they are not the same.  For example, women bear children and men don’t.  That means their biology is different and that has an impact on various things.  These are real differences – that are about fact rather than social prejudice.  Nobody can change those facts, so you have to live with them. 


However, some things are about social prejudice and threaten the concept of equality.  For example, it’s apparently OK by MPs and MEPs, if, in Europe, a senior male politician has affairs, pays prostitutes etc., but I’m not sure it would be the same if a female politician (assuming any were allowed to be in senior positions) did the same.  But that is perfectly acceptable hypocrisy, nobody in power makes any protest or says that this is unnecessary prejudice and is a clear example of inequality.  


By contrast to prejudice, it is a fact that in general, women tend to live longer than men.  Also, young women tend to have less driving accidents than young men.   Those are facts, you aren’t going to change them.  But politicians in Europe and the UK think that this is a problem they need to solve.  Since they can’t change the facts, they change their response.  


They say we must have “equality”, but they’re trying to make things “the same” that are not the same.  The latest idea is to make insurance rates “equal”.  It’s trying to change the unalterable facts, not change the alterable social prejudice. 


For example, women live longer so, because they are less likely to die in a given period, they should pay less for life assurance than a man of equivalent age, state of health etc.  With the changes, the rates for women will go up and those for men will go down.  As a retirement annuity is usually paid until death, and men tend to die earlier than a woman of equivalent age and state of health, they should get more income for a given amount.  So the rate of income will go  up for men and down for women.


The MPs and MEPs, using their single collective brain cell “think” (if you can call it that) that it will balance out.  But the insurance companies don’t know what is going to happen, and they aren’t charities, they are businesses.  They’re going to play safe.  So the rates for some will go up more than they go down for others, to give the insurer a margin of safety.


So overall, the effect will be to increase costs.  There will be the same effect on car insurance, where the saving for young men will be less than the increase in costs for young women.  And there won’t be extra profits, there will just be bigger administration expenses – not to mention the costs for the MPsand MEPs to jet around, make stupid decisions and convince themselves that they are doing something for equality.


The other problem is that things like location will still effect rates.  So if you live in some areas at the time you apply for life assurance, an annuity etc. you’ll get a worse rate than in other areas.  Once you have the policy, that’s it, that is the rate you pay, even if you subsequently move.  But unless you have your gender reassigned (and I’m not sure what the figures are for that and I doubt the insurers do either, so the uncertainty will probably cost you as well) you aren’t going to change your gender. The result is that temporary situations, like location, smoking, current level of exercise etc. have permanent effects on what you pay, but something permanent, like your gender, has no effect on what you pay.


In my view, men and women ought to be treated equally, in terms of things like the stigma of affairs etc.  But they aren’t, despite MPs and MEPs being in a position to do something useful about it (like all be held equally responsible for not using what little brain they have).  However, men and women are not the same, so trying to pretend that they are identical is stupid – and the fact is that it costs a lot of time and money to achieve absolutely nothing.


It would be so nice if a politician had to sit an exam to prove that they can actually think – but since they set the rules I don’t suppose it will happen, because that would be far too sensible for a group with only one brain cell between them!   



Posted in Current financial events | Comments Off on Single sex rates and single cell brains

Black swans, Libya and crude oil

Posted on February 24, 2011 by Kim Stephenson


I’ve said before that market and economic predictions are not a good move unless you want to look foolish.  But people still make them. 


The only prediction I made was that things wouldn’t stay the same – so predictions would make the predictor look silly.  And trying to base regulations and policies on the predictions, would go badly.


Still, the fact that I’m right doesn’t stop anybody predicting, even though, as with the oil price rises and the situation in Libya, nobody actually predicted what would happen. 


Except – sorry to sound boastful – me.  I said chaos meant that the “experts” would predict things, be proved wrong and then justify themselves.  And of course, it happened.  It’s happening now.  I said, in an article for a newspaper:


“Everybody thinks they can now explain the economic crash, say what caused it, what should have been done, how all the factors interacted. But a point made by Taleb in ‘The Black Swan’ is that if you ask people to describe the pool of water that will form from a melting ice-cube, they can do it, test whether they are right and most of the knowledgeable ones will give the same, single correct answer.

 

If you show them a pool of water and ask them what shape the ice-cube was, they can’t test whether they were right, don’t all give the same answer and nobody actually knows whether any of the explanations were right. In reality, markets are like that.” 

 

Nobody knows what is going to happen in Libya, or to oil prices.  Nobody knows why what has happened has happened, why it happened now not next week or last week, what its effects will be or whether the oil prices are directly related to Libya at all (so if the situation resolves, will oil prices fall to the level they were before, if it gets worse, will prices rise? etc.)  But we have quotes such as this, including:   


“The potential impact of high oil prices on economic growth meant the FTSE 100 Index continued its poor week, falling by as much as 60 points early on and later standing 30.5 points lower at 5893.3.” 


So they think they know what the effect on oil prices will be, know that it is this that has the impact on the FTSE and that nothing else is having an impact.


Of course, really, they know they don’t know, but feel they have to say something.  But all the other commentators say the same things.  They all talk about lots of guesses and assumptions as if they were facts and assume “cause-effect” links that might not exist as if they are proven.  And everybody forgets that they are guesses and assumptions.  And when the next “Black Swan” comes along, or chaos means that things don’t work out the way they predicted (oil prices fall anyway, Libya has a bloodless coup but oil prices go through the roof, Martians invade) they make another set of guesses and set out some new justifications for why their previous ones were wrong.


It’s all quite entertaining, as long as you don’t believe any of it and don’t base your own finances on it. 




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Reality and illusion

Posted on February 23, 2011 by Kim Stephenson


We think we know what “reality” is.  So people say that they “know” how to make decisions, they “know” what markets will do, they “know” what is true. 


Often they base this on the fact that they are “logical” (which they aren’t).  But sometimes they base it on what they “know” in the world.  The problem is, what we “know” isn’t always true.  That’s why things like the McGurk effect and other illusions work.  And experience doesn’t help, even if you work with that effect for 20 years and you know what you “see and hear” isn’t true, you still see and hear it.


The thing is, our brains evolved to keep us safe, to predict what was going to happen so we could act in time.  Visual illusions don’t work the way we know the world works, so we don’t see what is there, we see what we “know” ought to be there.  What we “consciously” analyse and assess (with our without “logic”) is not an objective “truth” in the world but our interpretation of it based on our evolved brains.  We think we see the world “as it is”, but we don’t. 


It’s hard to convince people that this is what happens.  Our conscious minds are extremely good at making up plausible explanations for things that we see, do, think, believe or feel, but those explanations don’t necessarily bear any resemblance to the real reasons. 


Here’s an excerpt from some work by Michael Gazzaniga, a psychologist who did a lot of work with “split brain” patients, who had had the two hemispheres of the brain separated (a way to control severe epilepsy)


“Each hemisphere was shown four small pictures, one of which related to a larger picture also presented to that hemisphere. The patient had to choose the most appropriate small picture.  We then asked the left hemisphere – the only one that can talk – why the left hand was pointing to the object. It really did not know, because the decision to point to the card was made in the right hemisphere. Yet, quick as a flash, it made up an explanation. We dubbed this creative, narrative talent the interpreter mechanism.”

 

Gazzaniga, 2002



So we can always explain what we do, why we do it, why it is a good idea.  It’s just that the explanation bears as much relation to the “truth” as Jeffrey Archer’s autobiography does!



We don’t think the way we think we do, and we don’t know what we think we know.  So when somebody says they “know”, what you should do with your money – ask them how they know what they know and think what they think – and then ignore them!



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Taking a risk

Posted on February 21, 2011 by Kim Stephenson



I’ve been involved in a couple of interesting discussions lately.  While a lot of the advisers I’ve bounced ideas around with, speak to and link with regularly are keen to learn, there seem to be quite a number who really don’t see why they need to change what they have done for the last few years.


How about you?


Do you think you can have “a bit of a chat” to find out what people really need?  Or maybe “an in depth discussion to identify their real attitude to risk, their deepest desires and their future plans”, based on your experience of clients?


I wonder, do you think somebody could talk to you for an hour or so and find out all the things you want that you’ve never even thought about clearly for yourself, let alone told your partner?  Would you really “open up” like that to a relative stranger?


Similarly, do you know your own “attitude to risk”?  I don’t mean what you get from a standard questionnaire or in terms of software company’s risk categories (which you might have doubts about anyway).  I mean your real attitude, bearing in mind that if you were asked the questions in a different way it is about four to one on that you’d give different answers each time.


And that is you, and you’re an expert and think about this stuff all the time.  Do you think the average client has thought about, or has any real idea what their innermost dreams are and what are really scared of, and if they do, do you think they’re going to tell you relatively easily?   Finding out what people really want and what they really fear, what excites them and what bores them involves a lot of work.  It also, from 100 years or so research in coaching, psychology, counselling, teaching etc. requires some training to be added to natural skills to do it reliably and efficiently.


Similarly, I’ve found some advisors who say that they understand that the market doesn’t follow a normal distribution and is potentially chaotic, and that therefore they don’t use probability theory when they talk to clients.  Then they say “I explain the downside risk” – meaning they use probability as their method to explain risk to the client.  Similarly, they say they use volatility as a proxy for risk.  Volatility isn’t necessarily a good proxy and it also uses probability theory inappropriately to calculate the relevant details.


How about you?  Are you assuming that you can use the “probability” of potential shortfall from required return and volatility as a proxy for market risk, and therefore use two educated(?) guesses about future events and present them to the client as carefully calculated “probabilities” that are actual facts?  Even if you totally understand all the assumptions and guesswork that goes into all the figures yourself, how do you express that to the client without confusing or scaring them, or building up unjustified expectations?  Or do you just hide the truth from them, because you can’t find a way to explain to them what is really going on, working on the basis that “what they don’t know, won’t hurt them”?

It is hard to accept that the way we’ve done things in the past is good, but not good enough.  It is even harder to learn new ways to do things.  But there are better ways, both to understand the clients’ thinking, and explain concepts like market risk so people understand them.  They don’t depend on fantastic intelligence or unbelievably good interpersonal skills (although being “good with people” to start with is a big help).   They depend on proven science about people, their thinking and their behaviour, and you can learn enough to apply some of the basic principles in a couple of days.


You can also learn some of those principles and try them out.  When and if you find that it helps you to build better relationships with the client, and you have a firmer base for doing business, you can decide whether to invest the time to learn more. 


But you do have a choice.


On one hand you can choose to learn how to do things better, have better client relationships, more secure business and give a much clearer picture of how you work.


On the other you can stick with something that doesn’t really allow you to understand the client or their thinking, that gives both of you a false idea of how well you really “know” what they want and that leaves you in the position of giving them a false picture of what the “risks” really are and possibly even confuses you about how scientific your “measure of risk” really is.

It is up to you.



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Glass ceiling incentives

Posted on February 15, 2011 by Kim Stephenson


One of my friends pointed out an interesting coincidence of articles in the Telegraph.  One was about the glass ceiling.  The other was about the need for more women in the boardroom. 


On a positive note, Lord Davis who is leading on this has made the link between the two  and realised that:


  1. greater diversity at the top tends to break up Groupthink (as in my suggestion in “resources” for reading “The wisdom of crowds“).
  2. putting in a “quota” of women was pointless.


It’s great news, in part because it actually accepts diversity as a positive move, rather than simply a way to avoid being accused of prejudice.  The fact that more diverse opinions make for better decisions will have a lot of airspace on my new corporate site (when it finally gets re-vamped!)  But the general point is that “cognitive diversity” is good for decision making. 


It is also great news because a senior official has actually looked at the research and realised the facts, and that, as the Telegraph article points out – “There is no point in promoting women who are “just like men” for the sake of it”, and instead of using quotas inappropriately, is using them as a threat to force companies to think about the issue.


Maybe Lord Davis (and the Telegraph writer), having realised that “man clones” are not the answer will go a bit further and look at the nature of motivation and symbols.  If they do, they may realise that women tend to have different symbols and motivations to men – not in every case, but most of the time,  in the same way that not all men are bigger than all women, but mostly they are. 


If they follow up on that, they’ll realise that the idea that women are generally going to be motivated by the same things as men is nonsense. 


Journalists ought to get this point easily.  Men’s magazines are very different in style and content to women’s magazines, because men and women are generally interested in, and motivated by, different things.  You get some women who are more interested in men’s magazines that are full of gadgets, status symbols etc. than they are in women’s magazines.  And you get some men (I’m one) who are more interested in articles about people than things and who therefore prefer women’s magazines.  But in the main, women tend to like certain stuff, and men tend to like slightly different stuff – and the magazine writers know this and provide the appropriate material for their audience.


So hopefully, Lord Davis will keep up the good work by realising that the compensation systems, rewards, motivation etc. for corporations need to cater to women as well as men.  There’s not much point saying – “you’ve got to get more women onto the Board”, and then keeping the same model of motivation (you can be owned heart and soul by the corporation, you get huge status rewards etc.) that appeal to most men (but not me, because I’m in the minority) but not to most women (except a small minority – like, say, Baroness Thatcher). 


If you keep that system, you get a few women who basically have the same sort of motivation and world view as most men (man clones), and so you don’t actually get any diversity.   If you get women onto the board who think differently to the men (and thus provide cognitive diversity), they will tend to leave because they just don’t get rewards that they feel are worthwhile.  There’s plenty of evidence for that, among other places in the book, The sexual paradox and in my brief blurb about it. 


So to get diversity, you can’t just stick different people on the board (which they’ve realised), or simply encourage them to go on the board without changing the system (which they don’t seem to have worked out yet). 


If you want a parallel example – imagine that you want to get more people from different cultures in the Cabinet.  You don’t want simply to have a quota, or employ somebody who is an Eton man (like most of them now) and who has exactly the same background, culture, world view etc. (except for a  different skin colour), because that doesn’t give you any diversity.  You want some people who do actually see the world differently, perhaps somebody from an African or Asian culture, or who comes from an Islamic or Buddhist background, because they will bring a different view and true diversity.  But then there won’t be much point in giving them the incentive that good performance will get them a case of port and a magnum of champagne (which works for the Eton set), if their culture forbids them to drink alcohol!


Diversity is useful, but it only gets sustained with the right motivation.  People are complicated, their motivation is an individual thing and if you want diversity, you have to have diversity of incentive as well. 



Posted in Couples, Current financial events | Leave a comment

Save the children

Posted on February 12, 2011 by Kim Stephenson

 

Obviously, there is a lot said about money at the moment, with the economic situation. 

 

So, equally obviously, we teach children about it so they can function in the world – that being one of the points of education, being able to be a useful, productive member of society.  Don’t we?

 

Well no, not really.  I mentioned before that there is an idea of teaching financial capacity that is OK in theory, but that actually misses the main point.   What teaching is done tends to be about economics, which, as I’ve also said before is about national rather than personal finance and doesn’t deal with individual differences.  But at least it is a start.

 

I’ve met with the Personal Finance Education Group (PFEG) a couple of times in the last year or so. They are, as you can infer from the name, a charity that promotes (and provides materials for) the teaching of personal finance.  They explained that it is very difficult to get personal finance included in the school day.  There is lots of demand for time – there are basic things like reading and writing, and any number of other competing subjects from the essential to the frankly bonkers, all supposed to be included.  So the poor old teacher is subject to the whim of political masters who are (with apologies to the minority who aren’t) mainly influenced by what they think will win them votes rather than what is actually most useful for children to learn.

 

Then there’s the funding.  The PFEG is a charity.  The Government has enough money to pay 650 or so MPs their salary, expenses (obviously) office costs, researchers, cars, houses and so on.  Naturally, they are short of a few bob to fund education in something as important as personal finance.  This could be because if people understood personal finance, they might work out what the politicians were up to (to quote Ben Elton, “bit of political satire there”!)  Maybe, since the Belgians have managed without a Government for eight months or so and the sky hasn’t fallen in, we could suspend our Parliament for a year and put the billion pounds or so that we’d save into education.  It would at least improve the prospects of the next generation, and would temporarily stop the current generation causing any more damage!

 

 But the fact remains that the PFEG do pretty well to provide any materials to teach children some basic finance, even though I think (and they broadly agree) that it would be much better if we could also teach children “why” they are handling money, rather than only “how” to handle it. 

 

Part of the “time” problem would be solved by integrating financial teaching into other fields.  There are areas such as maths, history, citizenship etc. where means of working financial calculations or discussions into the main subject are relatively obvious.  Most other subjects, geography, science, ICT, art & design, can include financial aspects, projects and debates, with a bit of thought.  That means you don’t need “extra” lessons on finance, you just make the lessons you have more efficient.  But planning that takes professional time, and that time costs money, and that money isn’t available. 

 

So perhaps you’d like to help.  There are some people trying to get some decent financial education into schools.  There are a number of IFAs who give up time free (via the PFEG) to help with practical lessons.  There are also a small number of individuals who, instead of saying “isn’t it awful, they ought to do something” (without specifying what ought to be done, or who “they” are who ought to do it) take the intiative.  One of those is Julie Bayley, an IFA in the North of England who has started an SOS (Sponsor Our Schools) campaign.

 

I’m hoping to work with Julie and her colleagues to help include more about the “why” of money, and also integrate the “happiness agenda” as some enlightened schools are already doing. 

 

But you can help too, by offering time, expertise and/or money.  You can contact Julie or the PFEG (via the links above), you can contact me, you can start something yourself locally (but please link in to the others, since we’ll be more effective if we don’t all re-invent the wheel).   But whatever you do, either help, or never complain again about shop assistants, people in call centres, etc. who “don’t seem to understand maths or have any common sense, I don’t know what they teach them in schools these days!”

 

 

 

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Just be rational

Posted on February 7, 2011 by Kim Stephenson


The common them of a lot of “experts” about money is that you should be logical, rational, unemotional.  You should rely entirely on your “thinking” and eliminate emotion.   The theory is that this will avoid “emotional errors” and lead to better decisions.


I’ve said before that it isn’t possible, humans didn’t evolve to do it, we don’t really know what “reality” is we only know the “reality” that our brains tell us is there and that logic without intuition and emotion is not particularly useful. 


In a great series, Dr Michael Mosley looked at how psychology has begun to understand the brain. Unfortunately, they haven’t made the whole series of three programmes available to view again.  They haven’t even made the whole of the second programme, on emotions, available – but there are some clips including this one.   


If you can get a copy of the programme, if you watch nothing else, look at the last 15 or 20 minutes.  I’ve referred in resources to the book Descartes’ Error, by Damasio.  In the programme, Dr Mosley shows the consequences of a “totally logical” brain, one that has lost its capacity for emotion – in an interview with a former student of Damasio who is continuing with experiments to try to understand how we really think. 


We don’t know all the answers, maybe we never will.  But what is absolutely certain is that trying to think “logically” about money and ignoring your human emotions, intuitions, feelings etc. is impossible, if you could do it, it would not be an effective way to think and if you did do it would mean that you cease to function as a human being. 


Work with your brain, not against it.


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The pursuit of happiness

Posted on February 5, 2011 by Kim Stephenson


Simply the best programme on happiness !   I’ve been critical of the BBC for apparently ignoring all the good research so far, so well done the BBC for a really balanced programme!


It’s a half hour radio show, not sure how long it will stay available so, to summarise:


It talked a lot to Martin Seligman, who is effectively the father of positive psychology (a couple of whose books are mentioned in resources) and also Felicia Huppert (who is on the Government advisor panel on happiness – hooray, a real expert involved in policy!). 


There were demonstrations of the effectiveness of training in this area, such as provided by Anthony Seldon of Wellington (as a former public schoolboy, I can vouch for the fact that if you can get adolescent boys to take something “touchy feely” like “happiness” seriously, you’re doing something right). 


Incredibly, to me, anyway, they also had evidence from the US army on the use of lessons in “resilience”, showing that the US military can see the value of this.  In fact, they’ve worked out the important point that prevention is better than cure.  They focus on people being psychologically healthy, rather than waiting until they are mentally ill, depressed etc. before trying to “fix” people.  Maybe the UK could benefit from that – in the NHS for a start, and try to focus on keeping people mentally and physically healthy, instead of waiting until they are sick and then reacting to that.


But it didn’t just accept that it is all wonderful, opposite points of view were given, including the very valid point (that I hadn’t really considered) that even if you can help people to be resilient, at job losses for example, should you do that or should they be angry and work for a better system?  Even though, as Martin Seligman pointed out, the evidence is that people are more generous, more empathic and more altruistic when they are happy/optimistic, there still has to be a question about the relative power of positive emotion and justifiable anger as ways to make things better in society in general.


However, that is for the Government to work out.  From your own point of view, it looks like the evidence is increasing that happiness, life purpose or whatever you call it, is a helpful thing to focus on.


As a final point, Seligman was asked for his definition of happiness.  He pointed out that it is more than just – feeling good.


His five points (they are in his books, and I’m glad to say do feature in my points about happiness being important – e.g. in financial planning)


* Positive emotions – life satisfaction, etc. – the usual meaning.


* Engagement – (which is very like Flow – which you can look up in resources)


* Relationships – (which are mentioned in resources, but also in my radio interview earlier this week – which was before the BBC programme, so I didn’t crib what they said!)


* Meaning and purpose – (which comes up as a big feature of Man’s search for meaning in resources)


* Accomplishments – (which includes things like progress towards goals, which is another reason why I don’t think SMART is an adequate goal setting method).




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