05/17/2012 01:00 pm ET Updated Jul 17, 2012

Richer, But Not Happier: America's Financial Conundrum

Back in the 1950's, my father was a home builder. The first house he ever built was less than 900 square feet and sold for under $10,000. The man who bought the house from my dad couldn't have been happier. It was his first home -- and he went on to live there for 20 years.

Today, I dare say, there are closets in some homes larger than 900 square feet. And certainly garages that are much bigger. We drive fancier cars, take grander vacations and send our children to private schools. But with all these economic advantages, are we Americans in general any happier? Sadly, recent studies reveal that the answer is a resounding no.

What gives?

Simply put, America is "house rich" and "happiness poor." In many cases, we spend enormous amounts of time working jobs we dislike trying to keep up with the Jones' lifestyle. We accumulate items that convey money and success only to find out -- sometimes very late in life -- that all our money and all our things don't make us happier. Instead, we could focus on understanding the true meaning of wealth and happiness and on creating our own definitions of success.

Many Americans have a fundamental misunderstanding of money that contributes to our unhappiness. The purpose of wealth -- indeed, the only purpose of wealth -- is to help you create the life you desire. I have been a financial adviser for 25 years. In that time, I have come to realize that many people mistakenly equate money with happiness and wealth. What they fail to realize is that true wealth isn't measured in money; it's measured in moments, like the time we spend with family and friends and giving back to our community.

Others use money as a way to keep score. Keeping score implies we are in a game or a race with a finish line. Imagine the finish line as the end of your life. Picture being in heaven and looking down on your own funeral. Listen as the minister welcomes guests and lets everyone know how much the family appreciates their support. She then tells the mourners that you died in the top one percent of all Americans in terms of net worth, that your investment portfolio beat the S&P 500 by three points every year, and that you owned the largest home in the neighborhood. She thanks everyone for coming and ends the service. How does that sound? Is that the legacy you want to leave?

There are a number of fundamental truths about money that I believe everyone needs to understand to maximize happiness in their lives. Let's look at two of the most important:

1. Money is a tool.
Money is a tool to help you live the life you desire -- nothing more, but nothing less either. You can only do four things with your money. First, you can save it or invest it in the hopes of creating a more powerful tool. Second, you can use it to help create the life you desire. Third, you can use it to enhance the lives of the people you care about. Fourth, you can use it to make a positive difference in the lives of others, creating a living legacy that represents your passions and values. When you embrace the concept that money is a tool, you can use this perspective as a filter to make sure you are not confusing money with success or wealth.

2. We only have temporary custody over our money.
Many of my clients have lived most of their lives under the faulty premise that they can keep and control their wealth forever. The immutable reality is that we only have temporary custody over our money. Unlike an Egyptian pharaoh, we won't be buried with it and we can't take it with us. Once you accept this truth, you quickly can grasp that the goal of having money is never to die with the most, and you can choose to make the best use of our money while we have control over it. After all, as my dad knew long ago, even the most expensive carpentry tools aren't worth much if you never put them to good use.

Think about it for a minute. We all remember the firsts in our lives: Our first love, first car, first home, first dog, etc. And why do we remember these firsts? Because they were special and we were content. We were happy with what we had. We were not yet distracted by the desire for more, bigger and better; we simply enjoyed the time that we had together.

We can all learn a lesson from people like my dad and the man who was overjoyed to buy his first 900 square foot house. Happiness is having a roof over your head and the people you love under it. It's having a place to call home, not the fur coat in the closet or the fancy cars in the three-car garage. And that can be the blueprint for making us happy -- and ultimately wealthy.

David Geller is the author of Wealth & Happiness: Using Your Wealth to Create a Better Life. He also serves as a motivational speaker and the CEO of Atlanta-based GV Financial Advisors. His new book is available through or at

For more by David Geller, click here.