RESEARCHERS HAVE spent decades probing the connection between money and happiness. For instance, a much-cited 2010 study by academics Daniel Kahneman and Angus Deaton found that folks tend to feel happier the more money they make—but only up to a point, which they estimated to be about $75,000 a year. But using only income to measure the link between money and happiness is incomplete. Another study, entitled “How Your Bank Balance Buys Happiness,” analyzed the connection to people’s “cash on hand.” The researchers found that having more money in checking and savings accounts was associated with higher levels of life satisfaction. But similar to the income studies, so-called liquid wealth appeared to be subject to diminishing returns, with the impact on life satisfaction tapering off as folks have more. Which brings me to tennis. We recently moved from Granada, Spain, to Alicante, which is about 220 miles to the east and right on the Mediterranean. Alicante has milder weather that’s conducive to outdoor sports all year round, so most apartment complexes have tennis courts. My husband Jim accused me of looking for our new apartment based on the condition of the tennis courts first and the apartment second. Yes, I love playing tennis. I also have a fondness for tennis analogies. I think saving money is like playing good tennis defense, while making more money is like playing offense. There are plenty of YouTube videos of the best winning shots, but relatively few that focus on the defensive skill that’s needed to keep the ball in play. Playing defense isn’t flashy. Yet Novak Djokovic, arguably the world’s top player, is renowned for his defensive play and for his ability to turn defense into offense. Along the same lines, making more money, moving up the corporate ladder and building your own business are all exciting. People love to talk about such successes and to show off what this money has bought them, whether it’s the new car or the bigger house. But they never pull out their latest portfolio statement and say, “Look at my balance.” There’s nothing showy about saving money. We often celebrate a pay raise, a promotion or a business success, but we seldom celebrate when we’ve maxed out our 401(k) plan or reached a financial milestone. [xyz-ihs snippet="Mobile-Subscribe"] In tennis, playing defense is mostly about limiting your mistakes, while waiting for the opportunity to strike. In football, it’s said that “defense wins championships.” Isn’t it the same in life? Progress—and ultimate success—are typically achieved through hundreds of smart, boring, stay-the-course decisions, rather than through flashy gambles. Indeed, for most people, financial success is more about limiting mistakes and less about striking it big. Limiting mistakes means minimizing expenses by investing in index funds, living within your means, making the most of your 401(k) and so on. Like the turtle, it’s slow and steady that wins the race. I have always been a saver. When I earned a bonus or got a raise, I saved the extra money. Even when I didn’t earn much, I still saved. I saved no matter what my circumstances were. In an earlier article, I wrote about the importance of financial literacy for women. It’s one way for women to level what’s otherwise an unequal playing field. Similarly, I’d argue that saving money is even more important for women than men. A 2018 survey found that, for 65% of women, financial anxiety is the No. 1 source of stress, while the No. 1 thing that makes women feel in charge of their future is “putting away money for financial goals.” No matter how hard I worked, I had limited control over the salary increases or bonuses awarded by my supervisors. But saving money and seeing my nest egg grow helped offset that, giving me a sense of control not only over my finances, but also over my life. It gave me confidence in my future—and that, in turn, bolstered my happiness. Jiab Wasserman's previous articles include Riding It Out, Enforcing the Rule and When You're No. 2. Jiab and her husband Jim, who also writes for HumbleDollar, currently live in Alicante, Spain. They blog about downshifting, personal finance and other aspects of retirement—as well as about their experience relocating to another country—at YourThirdLife.com. [xyz-ihs snippet="Donate"]

WHILE JIM AND I cooked dinner the other night, we talked about the old cars we drove when we were younger—and how they tended to pull to one side if we took our hands off the steering wheel. We humans have a similar tendency: We head in one direction unless we make a conscious effort to be more rational. That brings me to the coronavirus and accompanying stock market plunge. We all have gut reactions to news like this. Many of us drift toward fear and even panic. If you find that happening, try these three steps: 1. Have a roadmap. Instead of reacting to the news, each of us needs a plan that’ll keep us on course. As we go from childhood to adult life to retirement, we all have financial goals along the way, things like funding college, building an emergency fund, paying off debt, amassing wealth, starting a business and more. Once we’ve developed a financial plan to take us from here to where we want to be, we need to stick with it, no matter how great the temptation to stray. For instance, three of my top priorities were saving for my children’s college, paying off the mortgage and retirement. The 2008-09 Great Recession was perhaps the scariest financial time since the Second World War. But at that juncture, my goals were still many years away, so I stuck with my plan. I continued to fund college and retirement accounts, while also sending in extra mortgage payments as often as I could. I had to cut back on luxuries, including vacations, but I kept my priorities dead center. 2. Know your risk tolerance. We need to be aware of how we react during times of stress and then plan for it. For example, when stressed, do you tend to overeat or skip exercise? To counteract these tendencies, you might find an exercise partner, which makes it harder to avoid workouts, while also stocking up on healthy foods, so—even if you overeat—you are at least eating healthily. Similarly, we all need a portfolio that we can live with through the ups and downs of the financial markets—especially the downs. If we’re taking the right amount of risk, and we know why we’re investing, it’s a lot easier to stay disciplined. Jim has a higher risk tolerance than me. When we were saving for retirement, his nest egg was invested entirely in stocks, while I had a more balanced portfolio. Today, now that we’re semi-retired, Jim has shifted to be more conservative, so we both own  a mix of 50% stocks and 50% bonds. 3. Adjust if necessary. While we all have a tendency to react based on gut instinct, we also have the ability to observe ourselves and correct our behavior. To that end, ponder how you’ve reacted during the current market turmoil. Do you feel panicked and want to sell? If so, ask yourself: Does your plan need to change based on what you’ve learned about your risk tolerance? If you’re young and still in the workforce, try to see this recent decline as a good time to buy into the stock market. Indeed, given the current buying opportunity, perhaps your roadmap should be modified, so you increase or even max out your contributions to your IRA or 401(k). If you’re near retirement and now feel you have too much in stocks, perhaps you need to own a more balanced portfolio. When should you change your mix of stocks and bonds? With the S&P 500 off 27% from its all-time high, this isn’t a good time to sell. Still, you might ease out of stocks over the next 18 or 24 months, unless the market comes roaring back, in which case you should probably shift to a more conservative mix right away. And if you’re already retired, hopefully you have a roadmap that anticipated a market decline. But if you didn't, this is a good time to see if your plan needs to change. For instance, should you consider immediate fixed annuities, so you can sleep better at night knowing you’ll receive regular income, no matter what happens in the stock market? In 2017, Jiab Wasserman left her job as a financial analyst at a large bank and is now semi-retired. Her previous articles include In Withdrawal, Time Well Spent and Those Millennials. Jiab and her husband Jim, who also writes for HumbleDollar, currently live in Granada, Spain. They blog about downshifting, personal finance and other aspects of retirement—as well as about their experience relocating to another country—at YourThirdLife.com. [xyz-ihs snippet="Donate"]

THE DALLAS HOUSING market has recently shown signs of slowing. In our townhome community, I’ve noticed that houses are sitting unsold for longer. Until recently, any place on the market for more than seven days was considered unusually long. Two weeks ago, we became interested in buying a two bedroom, two bath townhome on our street as a rental property. It was listed at $375,000. Upon a closer look, however, we found the following: The property hasn’t been upgraded since 1988. We also found several structural problems, including a major foundation crack that seemed to cut across the front room. The roof, heating and cooling system, and hot water heater all needed replacing. The county tax appraised value is $305,000, which is based on the assumption the house is in average condition and hence doesn’t factor in the structural problems and the lack of upkeep and updating. That $305,000 works out to $188 per square foot, significantly below the list price of $230 per square foot. Based on the condition and the expected repairs, we made an offer of $280,000, or $95,000 lower than the list price. Yes, that was a big difference. But considering all the repairs needed and the cooling housing market, we thought it fair. The seller countered with $359,000. We walked away. It struck me that this was a classic example of anchoring bias—the inordinate influence of the first piece of information encountered. With a home sale, the initial price is typically seen as an anchoring point, whether that price is reasonable or not. I suspect the owner set the selling price based on market conditions in early spring, and then failed to adjust the price despite sharply higher mortgage rates and a recent high cancellation rate for home-sale contracts. Even our own realtor thought our bid was too low. But I suspect she, too, was measuring our bid relative to the list price, not the house's actual condition and value. Anchoring bias typically occurs in situations where folks are dealing with numbers. But it can also occur with qualitative expectations. If children have good grades in elementary school, that anchors the parents’ expectations. Parents declare their child an “A student” and expect subsequent teachers to confirm. Similarly, athletes who perform well at the junior level are designated forever stars. Donald Young, a U.S. tennis player, was phenomenal in junior tournaments but ranked only as high as 38th as a professional. That’s an incredible achievement—but it’s seen as disappointing compared to our expectations of Young, which are anchored on his early success. Want to be happier with your achievements? Weigh the anchor of your expectations—and perhaps change it for another if that’s what the facts demand.

THERE’S TRADITIONAL career advice, such as clarify your goals, master essential skills, promote yourself, network and work smarter, not harder—whatever that means. While this general advice is great, it’s no sure-fire formula. There’s no guarantee that if you work hard and smart, you’ll get a promotion and a pay raise. Traditional career advice tends to assume that you, your boss and the company are all behaving logically, and that the system reflects that logic. What if they aren’t? Believe me, I’ve been there. I had to advocate for myself and, after some struggle, I succeeded. New job entrants, including my sons, their peers and some friends, have asked me for career advice. Looking back over my work life, here are my top three recommendations: 1. Know what kind of manager you really have. Your manager is the person who can make or break your career. I am not talking about a bad boss who creates an overtly unhealthy or even toxic work environment. If you’re working for one of those, leave as soon as possible. No, I’m referring to the sneakier kind of boss. They’re nice people. Everyone likes them. They talk in terms of the team and compliment you in their evaluations. Despite the pats on the back, however, they just never seem to promote you, no matter how hard you work or how good your work is. I had my fair share of managers like this. Several years ago, one of these nice managers gave me excellent reviews. I asked him for a promotion to senior analyst because, for more than a year, I’d taken on senior-level responsibility. He told me that I needed to continue doing senior-level work at my lower pay level to prove myself for “a few more years.” When I asked him if he would follow his own advice and do higher-level work at lower-level pay, he refused to answer. I knew then that, to move ahead, I needed to leave. If you’re lucky and you have a good boss, be grateful. Work diligently to support him or her, as well as the rest of the team. I had several good bosses who coached, mentored and guided me. They advocated for me even when I wasn’t in the room. One boss put in the paperwork to move me up even though he knew he was on the way out. His position was eliminated, and yet he made sure my promotion would be approved before he left. Another boss selected me to join a leadership pipeline program, even though the program’s workshops and training would mean less time for my work. He gladly filled in for me at meetings and delegated some of my work, so I could advance. You can’t choose your manager, of course. Still, just being aware of which kind you’ve got can help you know whether it’s better to look elsewhere or stay put. 2. Pursue what interests you. I know this one sounds like typical advice. From my perspective, however, being actively involved and learning in areas that interest you will keep you engaged and inspire you to do better. Even if it’s not obviously beneficial to your current job, and even if your manager discourages it, pursuing your interests will help you stay in the game longer—and make work more fulfilling. And you never know when you might get a job in that new field you’re learning about. [xyz-ihs snippet="Mobile-Subscribe"] When I was an analyst back in 2002, I was interested in structured query language (SQL). I asked a colleague in the IT department to teach me basic SQL. My then-manager discouraged me from learning it, calling it an IT job, not mine. But I enjoyed SQL and continued to learn it on my own. About a year later, I was approached about an internal transfer to a new job with a substantial pay increase because the hiring manager was looking for an analyst with SQL skills. After my transfer, I continued to improve my SQL skills, which opened up more opportunities for me. I built on my SQL skills and learned the statistical analysis system (SAS) software to further develop my analytical skills for credit risk management. Although I couldn’t have predicted it back in 2002, pursuing my interests—even against my manager’s advice—helped my career years later. 3. Don’t ignore non-monetary benefits. Sometimes, the intangibles are as important as money and—in some cases—more important. As a single mom, I burned out early in my career, putting in many hours at work to climb the corporate ladder. While my career took off, it came at a cost—my time with my toddler son. After that, I left the company and vowed never again to work that much. At my new bank, I took a pay cut for a job that was less demanding, so I could have more time at home. Later in my career, I learned to value other, non-monetary benefits that gave me greater flexibility and a positive work-life balance. For example, I stuck with my employer because I was allowed to telecommute for the last seven years of my career. During that time, I got to see more of my sons during their high school and college years. That reward was worth far more to me than any title or raise that I might have received. Jiab Wasserman, MBA, RICP®, has lived in Thailand, the U.S. and Spain. She spent the bulk of her career with financial services companies, eventually becoming vice president of credit risk management at Bank of America, before retiring in 2018. Jiab lives in Texas with her husband Jim, who also writes for HumbleDollar. She's an advocate for addressing the issue of gender inequality. In addition to writing and playing tennis, Jiab creates and sells art, which is available through her online shops. She and Jim are working on a new book, due out in 2023, that examines the impact of social media influencers on youth consumerism and identity development. Head to Linktree to learn more about Jiab, and also check out her earlier articles. [xyz-ihs snippet="Donate"]

RETIREMENT IN AMERICA can be like plodding through a long, dark tunnel, with seemingly no light at the other end. I found, however, that if one looks sideways, there’s an escape hatch: retiring abroad. For my husband and me, our search led us to Spain, having heard it had a low cost of living, excellent health care and a good climate. We visited a few times and fell in love, particularly with the city of Granada. The next logical step: determining if we could swing it financially. I used Numbeo.com to compare the cost of living in the U.S. and abroad. It’s the world’s largest database of user-contributed data about cities and countries, and it provides timely information on general cost of living, housing, health care, traffic, crime and pollution. Numbeo provides six indices: cost of living (excluding rent), rent, cost of living plus rent, groceries, restaurants and local purchasing power. The overall index is relative to New York City, which is set at 100. If another city has a rent index of 120, it means that city’s rents are an average 20% more expensive than New York’s. Conversely, if a city’s rent index is 70, that means the city’s rents are an average 30% lower than New York’s. I was particularly interested in the cost of living plus rent index—not counting health care—using our then-resident city of Dallas as a comparison point. The Numbeo indexes showed New York at 100, Dallas at 55 and Granada at 33. Granada was thus 67% cheaper than New York. Even comparing Granada and Dallas was astounding. Consumer prices including rent in Dallas were 67% higher than in Granada, even before factoring in health care. I dove further into the details and used Numbeo's cost-of-living estimator for Granada. There are quite a few detailed questions one has to answer, including about one’s household (rent/purchase, members), spending habits (clothes, gym, cars and travel) and entertainment spending (movies, clubbing and alcohol consumption). My results showed that we would spend $2,100 per month living in Granada—and that included the traditional tapas bar hopping. Next, we had to figure out health care. Spain has one of the best health care systems in the world. It’s ranked No. 7 by the World Health Organization. By comparison, the U.S. comes in at No. 37.  We would have to shop for private insurance for our first year. But after that, we could sign up for public health insurance, which would cost us—wait for it—zero. Thanks to a recent change in Spanish law, all residents receive free health care. We decided to go with one of the most highly recommended health insurance companies in Spain for expats. The plan is $193 per month for both of us. This is a comprehensive plan, even considered an expensive one, with no copay, no deductible and includes basic dental services. The plan also includes worldwide emergency coverage of up to $14,000. We pay an extra $1.75 a month to increase emergency coverage in the U.S. to just over $35,000. Putting it all together, using a combination of our actual numbers and Numbeo's estimates, I calculated that it would cost just over $30,000 per year for us to live comfortably in Granada. Bottom line: The numbers said we could potentially retire immediately, in our early to mid-50s, and live very well. We didn’t want to spend our healthiest years planning for the future, always saying “someday,” while our lives passed us by. We would have to give up things, like cars and a large house. But we would gain so much more: walks in the mountains, fresh Mediterranean food, siestas. So we packed our bags and went for it. Jiab Wasserman recently retired at age 53 from her job as a financial analyst at a large bank. She and her husband, a retired high school teacher, currently live in Granada, Spain, and blog about financial and other aspects of retirement—as well as about relocating to another country—at YourThirdLife.com. [xyz-ihs snippet="Donate"]

I CONSIDER MYSELF a retirement newbie. I only quit fulltime work in May 2018. Still, it doesn’t take long to pick up a few things about life in retirement. Here are four insights I’ve gained over the past year and a half: 1. It’s important to have a plan. I have witnessed how some retirees, without a plan or direction, struggle to fill the empty time. Here in Spain, for some retirees it can become an endless Groundhog Day cycle of daily drinking and tapas hopping. The only sign of creativity is, “Which bar today?” One study linked retirement to a 40% greater probability of suffering from clinical depression, especially among men. When your day is no longer occupied with work, meetings, projects and commutes, how do you fill the time? Retirement is like a blank canvas. You’re free to paint, draw or make of it anything you want. That can be liberating, but it’s also quite daunting when you first confront the canvas. Indeed, many retirees are uncomfortable with the prospect, especially if they step in front of the blank canvas with just the vague notion that they want to create “something.” In retirement, we not only have to continue to do things on purpose, but also we need a sense of purpose. 2. Old habits die hard. It’s hard to switch off “working mode” right after retirement. I admit I still tackle tasks furiously, with an imaginary deadline-meeting determination that causes my husband Jim to joke, “Don’t get in Jiab’s way, because she’s on a mission.” It’s a lifelong habit that I developed from a young age. No doubt this focus helped me to succeed in graduate school and in my career. But in retirement, it can also bring self-imposed stress. Every day, I work to tame my relentlessness—but at least I haven’t set a deadline to achieve this particular goal. Similarly, I’ve noticed that how others deal with retirement isn’t so different from how they approached life before retirement. Passive people tend to stay passive, proactive people stay proactive and busy people find things to keep themselves busy. If you’ve been pushing off exercise your whole life and think you’ll get fit after you retire, you will find plenty of excuses to not exercise, even after you quit the workforce. It is easier to remain the same—unless you make a conscious effort to change. 3. It’s better with a partner. While change is hard to both initiate and adjust to, it is easier if you have a partner—one who’s on the same page as you. Jim and I retired at the same time with similar outlooks on retirement. Not only do we share goals, like traveling, but also we support each other’s individual passions, from Jim’s book writing to my learning guitar. We also push each other to be better. That’s our competitive nature. Our Spanish has improved significantly over the past year, because we see each other practicing and neither wants to be left behind. When you live alone, it’s easy to take the path of least resistance and binge watch Netflix in English for three days, instead of getting out. This is why many improvement programs have a buddy or sponsor system. Being accountable to another person makes you, well, accountable. 4. Learning gets harder as we age. After my retirement, I took up designing, building and maintaining a blog. Along with the blog, I started to write, both for our blog and for financial websites. I found that writing is a process that can’t be rushed. For every piece I draft, I have to edit it multiple times more. I now call writing “rewriting.” The process takes many weeks, because I need to let the ideas and phrasing flow and gel in my mind. As a lifelong numbers person, writing is definitely using a weaker muscle. It’s what makes it hard, but also rewarding. Because I’m already fluent in Thai and English, learning another language—Spanish—should be easy, right? Not quite. It’s much tougher to learn a new language in my 50s than when I began learning English at age 10. I don’t retain words as well as I used to and the rules don’t click quite as easily. While it’s true that you’re never too old to learn something new, the older you are, the steeper the learning curve. Still, there’s one Spanish phrase I’ve learned that gives me heart: poco a poco—little by little. Last year, Jiab Wasserman left her job as a financial analyst at a large bank and is now semi-retired. Her previous articles include Those Millennials, Cutting Corners and Fast Forward. Jiab and her husband Jim, who also writes for HumbleDollar, currently live in Granada, Spain. They blog about downshifting, personal finance and other aspects of retirement—as well as about their experience relocating to another country—at YourThirdLife.com. [xyz-ihs snippet="Donate"]