How Money, Time, and Goals Shape a Good Life – Key Insights

Name: Finding and Funding a Good Life
Uploaded: 2026-05-03T10:00:00+00:00
Duration: 21 min 22 s
Channel: Ben Felix
Description: Summary and key takeaways on Finding and Funding a Good Life: Summary & Key Takeaways, covering Foundations of Well‑being Experienced happiness describes how

Ben Felix

May 03, 2026

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21 min video

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2 min read

YouTube video ID: S9InNdQhFwc

Source: YouTube video by Ben Felix — Watch original video

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Experienced happiness describes how you feel in the moment, while reflective happiness captures how you evaluate your life as a whole. The PERMA‑V model breaks well‑being into six pillars: Positive emotion, Engagement, Relationships, Meaning, Accomplishment, and Vitality. Together these concepts form a research‑backed framework for assessing a good life beyond simple wealth accumulation.

The Role of Money

Higher income correlates with greater life‑satisfaction, yet its impact on moment‑to‑moment happiness is limited. Studies show that experienced happiness plateaus around $75,000 (about $112,000 today), and life‑evaluation happiness plateaus near $105,000 (about $137,000 today). The correlation between log‑income and happiness is modest at 0.09, indicating that beyond a certain point, additional dollars add little to daily joy. Moreover, people who prioritize extrinsic goals—money, fame, image—tend to be less happy than those who focus on intrinsic objectives.

Challenges in Goal Setting

Human beings adapt quickly to life changes, which diminishes the long‑term impact of major purchases—a phenomenon known as the hedonic treadmill. The “end of history illusion” describes the mistaken belief that current personality and values will remain fixed in the future, leading to misaligned goals. Lack of perceived control and exposure to intermittent noise further erode life satisfaction, making it harder to maintain consistent well‑being.

Practical Financial Applications

Empirical evidence links prioritizing time over money to higher happiness. When controlling for other variables, homeownership does not consistently outperform renting in terms of well‑being. Spending on experiences yields greater happiness than spending on material goods because experiences resist adaptation and often involve social connection. Regrets of inaction—things not done—tend to linger longer than regrets of action, amplifying dissatisfaction. Structured goal setting, using categorical prompts such as PERMA‑V and master lists, helps translate vague aspirations (e.g., “retire”) into deeper, value‑aligned objectives.

Mechanisms Behind the Findings

Income satiation marks the point where extra income no longer produces marginal gains in experienced happiness; this threshold varies with an individual’s baseline happiness. The time‑money trade‑off describes the decision to sacrifice potential earnings for additional free time, a choice that predicts long‑term happiness more strongly than income alone. Goal elicitation employs frameworks like PERMA‑V to move from surface‑level aims to deeper, purpose‑driven goals, counteracting adaptation and the end‑of‑history illusion.

Takeaways

Well‑being splits into experienced happiness (momentary feelings) and reflective happiness (overall life evaluation), captured by the PERMA‑V model of Positive emotion, Engagement, Relationships, Meaning, Accomplishment, and Vitality.
Income raises life‑satisfaction up to a satiation point—about $75 k for experienced happiness and $105 k for life evaluation—but adds little to momentary happiness, especially for those already happy, with a weak log‑income correlation of 0.09.
Pursuing extrinsic goals such as money, fame, or image consistently lowers well‑being, while focusing on intrinsic objectives aligns better with higher happiness.
Empirical evidence shows that prioritizing time over money, renting versus owning, and spending on experiences rather than material goods all produce greater long‑term happiness, and regrets of inaction linger longer than regrets of action.
Structured goal setting using categorical prompts like PERMA‑V helps move from vague aims to value‑aligned objectives, improving satisfaction and mitigating the hedonic treadmill and end‑of‑history illusion.

Frequently Asked Questions

What is the income satiation point for experienced happiness?

The income satiation point for experienced happiness is roughly $75,000, which adjusts to about $112,000 in today’s dollars. Beyond this level, additional earnings produce minimal gains in moment‑to‑moment happiness, even though life‑satisfaction may still rise slightly.

Why do regrets of inaction last longer than regrets of action?

Regrets of inaction persist because missed opportunities are harder to rationalize and often involve imagined better outcomes, leading to lingering negative feelings. Research by Dan Pink shows these regrets dominate long‑term emotional impact compared with regrets stemming from actions taken.

Who is Ben Felix on YouTube?

Ben Felix is a YouTube channel that publishes videos on a range of topics. Browse more summaries from this channel below.

Does this page include the full transcript of the video?

Yes, the full transcript for this video is available on this page. Click 'Show transcript' in the sidebar to read it.

Helpful resources related to this video

If you want to practice or explore the concepts discussed in the video, these commonly used tools may help.

The Power Of Regret Dan Pink Recommended

This book explores the science of regret and how to use it to make better life decisions, directly supporting the speaker's points on inaction and goal setting.

Amazon →

Hardcover Goal Setting Journal For Reflection

A physical journal provides a structured space to apply the PERMA-V model and document value-aligned objectives, helping to overcome the 'end of history' illusion.

Amazon →

Flourish Martin Seligman Book

This book details the PERMA model of well-being mentioned in the lecture, providing a deeper academic framework for building a good life.

Amazon →

Stumbling On Happiness Daniel Gilbert

This book explains the psychological biases like the hedonic treadmill and adaptation that the speaker identifies as barriers to long-term satisfaction.

Amazon →

Links may be affiliate links. We only include resources that are genuinely relevant to the topic.

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Full Transcript YouTube

This is probably the most important
video I'll ever make. I hope it will
change your life the same way that
researching it changed mine. I used to
think that working, saving, and
investing were all about getting as much
money as possible. Don't get me wrong,
money is a powerful tool. We need at
least enough money to live, and money
can solve some problems, but more money
is not in and of itself the main goal of
personal finance. Personal finance is
about funding a good life, which is
subjective, but there is a lot of
evidence about what generally speaking
constitutes a life that people will
evaluate as good. The crazy thing is
that a lot of the common perceptions
about what makes life good are at odds
with reality. I'm Ben Felix, chief
investment officer at PWL Capital, and
I'm going to tell you about the
ingredients to a good life.
This might seem like a weird topic for a
chief investment officer to cover, but
how you spend your time and money and
how you invest are informed by the life
you want to live. Think about some of
the big questions that people have to
answer every day. Is a higher paying job
with longer hours and more stress worth
it? Is yoloing on this stock trade for a
small chance of a big win worth the
risk? How should you prioritize saving
for the future against enjoying life
today? Should you rent or own your home?
Should you buy a cottage? Does it make
sense to pay for a house cleaner or meal
delivery? These are important questions
that can't be answered in a spreadsheet.
The thing is though, and this is what I
think gets missed, there is a lot more
to a good life than a higher income and
more wealth. A good life is subjective.
My good life is not necessarily your
good life, but there is lots of research
on what does and does not tend to
contribute to good lives for most
people. The research on this is positive
rather than normative. That means it
doesn't tell people specifically what to
do. It examines empirically what tends
to make people evaluate their lives as
good. It's like giving you the
ingredient but not the exact recipe to a
good life. You have to come up with your
own recipe. When we're talking about a
good life, broadly speaking, there are
two ways to measure it. Experienced or
hedonic happiness and reflective or
udemonic happiness. You know,
experienced happiness when you feel it.
It's how you'd answer the question, how
do you feel right now? Or how did you
feel yesterday? Reflective happiness is
related to how you evaluate your life.
It's how you'd answer the question, how
do you rate your current life on a scale
where zero is the worst possible life
for you and 10 is the best possible life
for you. There's a very clear
distinction between feeling good right
now and evaluating your life as good
overall when you reflect on it. But both
are important to what I would call a
good life. For example, you could have a
life that you evaluate positively when
you step back and think about it because
you have a good job, a nice house, maybe
a family, but you're stressed out
through most of the day and you're kind
of miserable. Or you could spend all day
every day drinking beer in a hot tub
having a great time but be disappointed
in your life when you step back and
reflect on your overall position. That
tension between the two types of
happiness makes defining a good life
kind of complicated. But there is a
model from the field of positive
psychology the perma V model which is a
model of human well-being that goes a
long way to organizing it. The factors
in the model don't have optimal
allocations like it's not like Marowit's
portfolio theory uh for any individual.
They just tell us what tends to
contribute to well-being. The factors
are positive emotion, engagement,
relationships, meaning, accomplishment,
and vitality, which was added later.
Positive emotion is feeling good. You
know it when you feel it, like eating a
good meal or enjoying a walk outside.
Engagement is getting lost in a
challenging task that matches your
skills, known as a state of flow.
Relationships is having strong, reliable
relationships with friends and family.
Meaning is belonging to and serving
something bigger than yourself like
being involved with your community or
for some people a religious group.
Accomplishment is achieving hard things
that are pursued for their own sake. A
classic example is mountaineering. It
kind of sucks to do but you feel great
once you reach the summit and people do
it just to achieve it. Vitality uh which
I mentioned was added later is basically
eating well, sleeping well and
exercising. A lot of people get stuck in
the trap of thinking that if they can
just get a big promotion at work, win
big on a stock trade, or win the
lottery, that their life will just
become good. But that's not how it
typically works. And the pursuit of
money itself can actually have
unfavorable implications. There's no
doubt that we need a certain level of
income to live, but beyond that, money
and a good life have a bit of a
complicated relationship. There was an
influential 2010 study on a US sample
that found that life evaluation rises
steadily with income while experienced
happiness rises with income up to about
$75,000 and then plateaus. That would be
around $112,000
today. The authors conclude that high
income buys life satisfaction but not
happiness. So like life evaluation but
not not experienced happiness and that
low income is associated with low both
low life evaluation and low emotional
well-being. Then there was a 2018 study
that identified what they called points
of income satiation above which
experience happiness and life evaluation
stopped increasing in their sample. The
income satiation point for life
evaluation was about $105,000 for North
America in the study which is around
$137,000 today while experienced
happiness was about $65,000 or $85,000
today just based on inflation. In this
study, some parts of the world,
including North America, where I am, see
a decline in life evaluation at the
highest levels of income. The author
suggests that individuals with higher
incomes may be less happy, not due to
their higher incomes, which why would
that make you unhappy, but due to having
more demands on their time, less time
for leisure activities, an increase in
materialistic values, increased social
comparison, which I'll talk more about
later, and other life changes associated
with higher incomes, like living in a
more expensive neighborhood, which
counterintuitively is not great for
happiness. A 2021 study on a US sample
using real-time reports through a
smartphone app that asked multiple times
per day, "How do you feel right now?"
finds that both experienced and
reflective happiness do increase with
high income with no observed satiation
point. These results suggest that higher
incomes are associated with both feeling
better day-to-day and being more
satisfied with life overall. To
reconcile their findings, the authors,
this is a pretty cool thing, the the
authors of the 2010 and 2021 studies
teamed up for a 2023 paper that they
called an adver adversarial
collaboration. So they they had these
conflicting results and they actually
got together and tried to reconcile. So
they re-examined each other's results
and they worked toward an understanding
of of why there were such significant
differences. They found that happier
people experience increased well-being
at higher levels of income, but less
happy people do see that happiness
plateau at higher levels of income. So
happy people your your happiness keeps
increasing with income. People who are
not happy generally uh their income that
their happiness does increase with
income up to a point but then it
plateaus like that original study found.
Now important points to note on these
studies is that they're looking at the
relationship between log scale income
and happiness. I think this is often
missed in these discussions. That means
that each point on the income scale is a
doubling of income, not a linear
increase. So we're not talking about
getting a an inflation raise. We're
talking about doubling your income. And
even with those big jumps in income, the
relationship between income and
happiness is is weak. The correlation
between average happiness and log income
is 0.09 in the experience sampling data.
And the difference between the medians
of happiness at household incomes of
$15,000 and $250,000
is about five points on a 100 point
scale. These are small differences. The
2010 paper compares income to other
elements of of life to see how they
affect happiness relative to each other.
and finds that an approximately
four-fold difference in income is about
equal to the effect of being a caregiver
for a disabled or elderly family member.
It's about twice as large as the effect
of being married and about equal to the
effect of a weekend and less than a
third as large as the effect of a
headache. G given the small effect, it's
not surprising that people tend to
overestimate how much happier they would
be with a higher income. I think people
often get stuck in that trap if only my
income were higher. Even the wealthiest
households tend to believe that they
would need a lot more wealth in order to
be perfectly happy, which is like it's
crazy. People focused on exttrinsic
objectives like money, fame, and image
as opposed to intrinsic objectives like
growth, intimacy, and community tend to
be less happy in general and tend to
overestimate the emotional benefits of
achieving their extrinsic goals. I think
we can conclude that while having more
money is good, it's not that good with
respect to well-being and happiness and
the pursuit of money for its own sake is
actually likely to be detrimental to
living a good life. Incredibly, across
all these studies, the researchers found
that the happiest participants were
subscribed to this YouTube channel. They
didn't actually find that, but you
should still subscribe to this channel.
All of this makes setting financial
goals, designing the life you want to
live a bit of a minefield, and it's
compounded by the fact that people are
really bad at predicting what will make
them happy in the future. A big reason
is adaptation. People generally adapt
quickly to changes in their life
circumstances, even to big financial
changes like winning the lottery. Big
financial goals like buying a bigger
house or moving to a more expensive
neighborhood might give you a short-term
burst of happiness, but will likely fade
quickly. This is the hedonic treadmill
we've all heard about. Another issue is
that we tend to focus on one big thing
that we imagine in the future like
buying the house or a cottage or
reaching a retirement savings goal, but
we don't think enough about how those
things, how achieving those things will
affect how we spend our time, which is
more predictive of happiness than stable
circumstances. A further complication is
that personalities, values, and
preferences change over time. But people
tend to believe that they have recently
become the person that they will remain
for the rest of their lives. This is
called the end of history illusion. It's
crazy. It's like people today imagine
that they are they're stable. This is
how they're going to be for the rest of
their lives while also acknowledging
that they have changed significantly
throughout their lives and and people of
all ages have this perception. It's a
fascinating phenomenon. Uh so that's
that's the end of history illusion.
Setting out to achieve some big future
goal that your current self sets like an
early retirement or a major purchase in
the distant future might not end up
resonating with your future self. So,
you make sacrifices and whatever you you
overcome obstacles to achieve some big
long-term goal and then you get there
and you're like, "Oh, this is maybe not
what I actually wanted or or maybe it
didn't make me make me as happy as I was
expecting." So, given the challenges and
predicting the circumstances that will
make us happy in the future and even
knowing who we will be as a person in
the future, it can be sensible to focus
on how financial decisions will affect
how we spend our time rather than
striving to achieve a perfectly imagined
future. particularly when the path to
getting there makes today unpleasant. It
is important to note that while people
generally adapt to their circumstances,
good and bad, some things are harder to
adapt to. Noise, especially variable or
intermittent noise, interferes with
concentration and increases stress even
after years of commuting. People who
commute in traffic arrive at work with
higher levels of stress hormones. This
is relevant for anyone considering a
move further away from work or family,
introducing a longer commute to which
they will not adapt in order to get a
bigger house, which they will tend to
adapt to quickly. Not being in control
of your circumstances has a large
negative impact on happiness and life
satisfaction. Maintaining a feeling of
control may be relevant in the rent
versus buy decision for housing, which
I'll talk more about in a minute, and in
achieving financial independence.
Another sneaky drain on happiness is
social comparison, which can have
immediate impacts on your finances.
While we may not like to admit it, our
well-being is affected by how we compare
to those around us. And many people
maintain a lifestyle that is outside of
their means, driving down their savings
rate and putting even the most affluent
households in precarious financial
positions driven by social comparison.
Aside from avoiding those negative
circumstances and avoiding the issues
with social comparison, remember that
the elements of a good life are positive
emotion, engagement, relationships,
meaning, and accomplishment, plus
vitality. Money buys a bit of happiness,
but not as much as people expect. And
how we spend our time has a big impact
on our well-being. Let's apply these
ideas to some major financial decisions
that affect how people spend their time
and money. Time and money are somewhat
exchangeable. We can spend time working
to earn money, and we can spend money to
save time by outsourcing tasks or buying
time-saving products. Decisions about
the time money trade-off are some of the
most impactful decisions that people can
make. Empirically, people who prioritize
time over money, meaning that they are
willing to sacrifice their money to have
more time by, for example, choosing to
work fewer hours and make less money
rather than more hours for more money,
are happier. They have greater social
connection. They have a better
relationship with their spouse. And
they're more likely to choose work that
they enjoy. Given the choice to spend
some money to save some time or work a
little less to get some time back,
choosing time over money is generally a
good decision. that leads to less money,
which is the fascinating thing about
this stuff. A worthwhile exercise is
asking yourself whether how you are
spending your time contributes to your
version of a good life, and if not,
whether you can trade money for time to
fix it. Housing is typically the largest
single expense for most households, and
it's a basic human need. Owning a home
can offer stability, particularly if you
want to stay in a specific area for a
long time. It does also give you more
control over your environment. I put a
full-size basketball hoop in my house,
like a glass backboard and everything.
It's kind of crazy. I would not have
done that in a rental. I'm not going to
lie. It's pretty cool. However, I have
also enjoyed all of my past rentals with
no basketball hoop. There are gyms that
I can go to to play basketball. Broadly
speaking, based on studies in Canada and
Switzerland, owning a home does not make
homeowners happier than renters when you
control for all the other stuff that
could affect happiness. In an American
sample of 600 women, homeowners were not
happier than renters and spent less time
on enjoyable activities. In a German
sample, while home ownership did elevate
life satisfaction, it did so much less
than people anticipated it would when
they made the decision to buy the house.
Owning a home also affects how you spend
your time. I can tell you this with
certainty as a homeowner. It's like
having a second job. Even if you
outsource a lot of the work, it's no
joke. Some people love that stuff, which
great for them. I I actually don't mind
house maintenance stuff, but I don't
like it when it takes away from the time
I want to use to do things that I like
more. As a renter, you just wash your
hands of that stuff. You call the
landlord and it gets fixed. For anyone
making the rent versus own decision for
housing, the notion that it will improve
your life should be approached with
caution. A common related decision is
buying a cottage. Cottages are often
viewed as a place for family to gather,
sometimes for generations, which does
hit on the relationships element of a
good life. Being outside in nature is
also related to positive emotion.
However, it's important to think about
the details. Who are you going to invite
to the cottage? What if some family
members don't get along? Who will take
care of the maintenance? How bad will
traffic be leaving the city on Friday
afternoons with two kids in the back
seat? These details will likely be more
predictive of happiness than the fact
that you own the cottage. When deciding
how to spend discretionary money, we
have a choice between, broadly speaking,
experiences and things. Spending on
experiences when they are positive is
more impactful to increasing happiness
than spending on things. Though negative
experiences have the opposite effect. If
we come back to the perma model, this
makes a lot of sense. People are happy
when they're engaged in what they're
doing. And experiences can provide that
kind of engagement. Experiences are more
likely than things to be shared with
other people. And strong relationships
are important to happiness. Reflecting
on past experiences enhances mood more
than reflecting on past material
purchases. And people tend to remember
and anticipate experiences more than
things. It's also harder to adapt to
experiences than things since each
experience is unique while things are
static. Not all things are bad to spend
money on, but I think it's worth asking
how the thing will contribute to your
good life. The biggest goals for most
people are financial independence and
financial security. This makes sense
because they put you in control, at
least as in control as we can be in
life. Still lots of unpredictable stuff,
but saving for financial independence,
which is necessary for most people. It
is the right objective to have. It's
competing with spending today. That
present versus future trade-off is
another one of the biggest decisions
that people make every day. Achieving
financial independence sooner is good
all else equal, but it has to be
balanced against living the life that
you want today. It's also worth
considering that as long as you're able
to do work that you enjoy, work has a
lot of benefits. It can contribute to
engagement, meaning, and accomplishment.
Some studies show that people who retire
lose their sense of purpose, while other
studies do show that people leaving
lower income and less satisfying jobs
gain a sense of purpose. This matters
because planning to work longer at a job
that you enjoy makes more spending
available today. I'm not saying you
should spend all your money today, but
it's important to carefully consider the
type of work that you do, how long you
plan to work, and how that will impact
your spending and saving decisions. One
of the best ways to deal with the
inability to predict what will make us
happy in the future is to make more
frequent small experiential purchases
rather than fewer large material ones,
particularly when they contribute to
positive emotion, which could be things
like savoring a coffee. Engagement,
which could be spending on a hobby,
relationships, which could be taking a
friend out to dinner. Meaning, which
could be spending on your community, and
accomplishment, which could be something
like paying for a course that you want
to complete. Knowing that how we spend
our time is more predictive of happiness
than how we spend our money. A simple
test for expenses is to think about how
it will affect how you spend your time
and whether that relates to your
definition of a good life. Another
longer term lens that can help us
understand what tends to constitute a
good life is regret. People like to say
they they live with no regrets, but
regret is powerful. Unlike other
negative emotions, regret cannot be
experienced without having made a
choice. In research for his book on
regret, Dan Pink found in a large US
sample that people's regrets most
commonly involve family, romantic
partners, education, career, finances,
and health. And most people regret their
inactions more than their actions. In an
academic paper on regret, the authors
find in a representative US sample that
regrets involving romance are the most
common, followed by family, education,
career, finances, and parenting. Over
time, regrets about action tend to
dissipate. Doing something, oh, I did a
thing and I regret it. that tends to go
away. Regrets about inaction that
something that you did not do that you
wish you had done, those tend to linger.
They don't tend to go away. That can be
relevant for financial decisions where
playing it safe today on things like
starting a business or declining an
exciting job offer lead to missed
opportunities. Those types of inactions
can feel kind of painless in the short
run, like I'm not going to take the job.
Uh no, I'm not going to start the
business. But those are the types of
regrets that lead to more long-term pain
that it's harder to recover from. you
look back and think, "Ah, if only I had
done that, things would have been
different." A lot of regret comes back
to compounding. Small decisions
day-to-day that lead to a state that is
hard to reverse in the future. Eating
poorly and not saving enough are
examples where the immediate effect is
minimal. You eat a burger instead of a
salad, whatever. Uh or you you spend
your money instead of saving it today.
So, it's not a big deal dayto day, but
eventually it's too late to reverse
heart disease or build up your
retirement savings when you're 60 years
old. Part of the problem here is that
the human brain is not wired to think
about the effects of compounding, making
the long-term effects of those daily
small decisions really hard for us to
process. We don't realize how impactful
those small decisions are going to be
until it's too late to do something
about it. Okay, with all that background
on what contributes to a good life, the
last thing I need to talk about is
setting goals. If I ask you what your
goals are, you probably won't be able to
tell me, even if you think you can. You
might tell me your goals. Uh, but when
prompted properly, people often realize
that their goals, the ones that they
state when I ask you the question, fall
short of what they actually care about.
There are a couple ways to elicit more
meaningful goals. A big one is using
categorical prompts, showing people
categories that financial goals might
fit into. Another is the use of a master
list, a comprehensive list of goals
collected from many other people who
have set their own goals. In 2022, I
conducted a study where I asked 310
people, largely listeners of of my
podcast, to write down their goals. They
were then asked to double the list of
goals after the first pass. And they
were then presented with the Permav
model of well-being as potential goal
categories. Again, Permav stands for
positive emotion, engagement,
relationships, meaning, and
accomplishment. When you ask someone
what their goals are, they might say, "I
want to retire." But when you say goals
might fit into these six categories,
they tend to come up with more
meaningful goals. they get closer to
what really matters. Using the data from
my study, Morning Star's behavioral
research team found using natural
language processing that after being
introduced to the permavv model, people
tended to list deeper goals that
reflected their values rather than more
surface level goals like wanting to
retire. My study also resulted in a
master list of goals that people can
still find on the PWL Capital website.
This master list can be used in addition
to the permmaave categorical prompts as
part of a structured goal setting
process. Understanding your true goals
is important because the path to getting
there might be very different from the
path to achieving some other surface
level goal or the uncharted path of
doing whatever feels right in the
moment. People are responsible for
making financial decisions which
typically involve time and money
multiple times each day. This is not an
easy task since we are wired to make
quick decisions that result in
short-term pleasure and improve our
status relative to those around us. Even
the noble objective of setting long-term
financial goals is easily sabotaged by
our inability to identify a complete set
of personally important objectives. And
our weak ability to know what will make
us happy in the future. Stepping back to
reflect on how our decisions will affect
life satisfaction and happiness requires
more effortful thought, a model to
understand what a good life looks like,
the perma model that I've talked about,
and a plan to achieve it. The first step
in finding a good life is finding a good
life. I hope this video is a starting
point.