A Wealth of Well-Being: A Holistic Approach to Behavioral Finance
Published in 2024 by Meir Statman, from John Wiley & Sons
In A Wealth of Well-Being, Meir Statman, the Glenn Klimek Professor of Finance at Santa Clara University, delves into the connection between financial well-being and life well-being through the lens of the third generation of behavioral finance.
The first generation labeled people as “irrational,” the second as “normal,” while Statman sees people as “normal” but emphasizes the importance of viewing individuals as whole beings, encompassing various life domains such as relationships, health, work, and society.
While financial well-being is crucial, ultimately, it is life well-being that individuals seek. The book blends scholarly research in finance, economics, psychology, and more with practical stories to offer insights for financial advisors, planners, academics, and investors.
Statman highlights the correlation between financial well-being and life well-being, stressing that money is not the sole metric to evaluate individuals. Social status and other life domains play significant roles in overall satisfaction.
The book’s focus on education, health, and work resonated with me, emphasizing how these factors contribute to our overall well-being. Statman reveals how these aspects impact our lives beyond just financial considerations.
Statman’s insight on work, in particular, underscores the importance of finding fulfillment beyond financial gains, as work can enhance overall well-being, longevity, and productivity.
As wealth advisers, adopting a well-being approach can offer a competitive edge in a changing landscape where traditional financial services are becoming commoditized. By understanding their clients on a personal level, advisers can cater to their holistic well-being needs.
In conclusion, A Wealth of Well-Being presents a refreshing viewpoint on integrating finance with life well-being. It challenges us to rethink the role of finance in our lives and consider how managing our financial well-being can optimize our overall life choices.