Dateline: Guangzhou, China
What’s a better investment, precious metals or blue chip stocks? Commodities, or rental property in Panama? Farmland, or collectable art?
Many millions of words have already, and are yet to be, written on the analysis of those investments and hundreds of others. Of course, there is rarely a definitive answer to what is “best” because there are many variables and inherent assumptions, and also personal preferences and priorities of the individual investors.
But there’s another form of investment that pays an intangible dividend and could be argued is the greatest investment possible: An investment in your personal happiness.
Several studies have examined the so-called Easterlin Paradox which basically argues that the things purchased with a rising income deliver disproportionately less happiness. Stated another way, one automobile might bring you considerable happiness, but a ninth car in your garage will bring less.
Having $100,000 liquid cash in a safe place will make you happy, but having $150,000 won’t make you 50% more happy.
A corollary of this phenomenon is that if, instead of buying a ninth automobile, we use that same amount of money to purchase an intangible experience we ultimately rank that experience as far more valuable and for a longer period of time.
According to research, learning a new skill, like sailing, a foreign language, pottery making, becoming a pilot, traveling, or composing music will deliver more happiness than physical possessions will.
Being an expat is an investment in yourself.
This is a phenomenon that many expats have discovered empirically, without the academic investigation and rigor. Expats automatically make an investment in their own happiness.
I don’t mean because they move their income and assets to safer places, although that’s also something that increases their peace of mind and therefore their happiness. I mean that they thrust themselves into a higher level of adventure.
Expats see more interesting places, have conversations with more interesting people, try more new things, and have more new experiences.
The truth is, not every new thing is enjoyable. But psychologists have noted that we tend to value even our negative experiences as time goes by. That scary experience turns into a great story to tell, or a reassuring mile marker of when our character was built up another notch because of the trial. So virtually every adventure ultimately delivers a profit.
Many happy memories have the characteristic of becoming even more cherished and valuable to us over time. Every traveler has experienced returning to some location from a previous visit only to find that things have changed. Hotels are different, restaurants are gone, opportunities are no longer available and suddenly our old experience takes on increased value.
Moreover, most experiences involve interaction with new people, which means expats increase their connections with others. Some of these connections evolve into valuable friendships that further increase our happiness. Since many of these new friends come from different countries and cultures, we receive an enrichment in our perspective that isn’t as likely to happen when we make a new friend in our hometown.
It’s virtually impossible to find a person who says, “I spent many years traveling the world and living in several countries but I really wish I hadn’t.” It’s well established that people who travel and live abroad value the experiences enormously and for the rest of their lives. There are thousands of “things” you can invest in. There are many thousands more you can buy just to make yourself happy.
But very few have the long-term track record of delivering returns of maximum happiness and satisfaction that carefully selected personal experiences can deliver.
A satisfying personal experience and the enduring happiness it creates can’t be taxed. It can’t be regulated. And it can’t be confiscated. That’s what I call a good investment.