Why rent? To get richer

A contrarian's view: Houses don't appreciate any faster than the level of inflation over the long term, so forget about buying a home and put your savings into stocks.

Where are the Shareholders' Mansions? CEOs' Home Purchases, Stock Sales, and Subsequent Company Performance

A stock tip from two university professors: If a company's chief executive lives in a home the size of a shopping mall, consider dumping its stock.

That's right, lavish digs for the company's top boss could mean lousy returns for stockholders, say finance Professors Crocker Liu of Arizona State University and David Yermack of New York University.

In a study titled "Where are the shareholders' mansions? CEOs' home purchases, stock sales and subsequent company performance," the two found that for CEOs whose homes were larger than 10,000 square feet or sitting on 10 acres or more, their companies' stock price fell an average of 1.7 percent in the year following their home purchase.

For CEOs with more normal-size homes - for CEOs, that's close to 5,700 square feet - the company had an average stock-price increase of about 6 percent.

The study, released last month, was based on CEOs of 488 of the companies in the Standard & Poor's 500 index.

Valley executives

In an interview Wednesday, Liu cited a few Silicon Valley CEOs and their home-buying and companies' stock performance, although none of the local CEOs' homes were larger than 10,000 square feet or sat on a lot that was at least 10 acres. The examples ranged from dismal to sublime, from a shareholder perspective. Symantec stock fell 32 percent in the 12 months after CEO John Thompson's home purchase in Woodside, Liu said, while Apple's stock rose 123 percent after Steve Jobs bought his home, also in Woodside. Liu didn't provide any further details of those sales.

And if a CEO sells company stock and then buys a house? Beware of that, too.

The authors argue that when a CEO sells shares of his or her company and then buys a home, it's a signal of the leader's "entrenchment" in the company. The study hypothesized that when some CEOs sold shares, then purchased a home, their companies' stock performance was likely to suffer.

But, Liu said, plenty of insider-trading studies show stock sales by CEOs are indicators of future stock declines - regardless of whether a home is purchased. Some CEOs may be using their imminent home purchase as a pretext for selling shares, he said. As he and Yermack noted in their paper, such selling is sometimes discouraged by the board of directors, and "disfavored" by investors.

`Skin in the game'

"The CEOs should put enough skin in the game," Liu said. "If they are putting in their own money and taking a loan like everybody else, their stock tends to be doing OK."

Forty-four percent of CEOs in the study bought homes using a mortgage. About one-third of CEOs sold company stock in the 12 months before buying a home.

Liu and Yermack studied the home purchases and financing methods of those who were company CEOs as of Dec. 31, 2004. Their assumptions about the value of executives' homes were based on valuations on public Web sites Zillow.com and Reply.com in 2006.

In a sign of how secretive some company executives are, it took Liu and Yermack three years to figure out where 488 of the S&P 500 CEOs lived.

In compiling their property database, the professors culled some little-known tidbits about the homes of the country's top bosses, such as:

Median number of bathrooms in a CEO home: 4.5

Median square feet: 5,664

Median value, 2006: $2.7 million

Median distance a CEO lives from the office: 12.5 miles

Percentage of CEOs who live on a golf course: 8.5

Liu and Yermack are in the process of doing further research on the relationships between executives' real estate holdings and their companies' performance on Wall Street. Next up: chief executives' vacation playgrounds.

"Some of these CEOs, their vacation homes are even more expensive than their primary residences," Liu said.

Download the full report at: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=970413#PaperDownload

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Garmin (GRMN) 88.71
Microsoft (MSFT) 23.50
Mittal Steel (MT) 29.55
Suntech (STP) 27.83

Creating Passionate Users

So, what's the initial motivation for someone to take the first step with your product, service, or cause? Why should they download your free trial? Why should they visit your gym/store/church for the first time? Marketers and Advertisers might delve into the psychology of human needs to answer that question (maybe a spin through some variation of Maslow's hierarchy), to figure out which they can tap into, but we think there's a simpler way to look at it.

The most common reason people take the first step toward something they may ultimately develop a passion for is because these THREE things are present:

1) There is a clear, compelling picture of what it might be like to be an expert (or at least really good) at this thing.

2) There is a clear path to getting there.

3) There is an obvious and relatively easy first step.



If you show me an example of what it could mean to be really good at this thing-you-can-help-me-kick-ass-in, I might find that motivating. Whether it's photos of people doing it, or the result of what they do using your thing, or video clips, or testimonials (users talking about how they kick ass, not how great you or your product are).

But it doesn't matter how motivating it looks to become really good at this if I can't imagine that I--a mere mortal--could ever get there. You must show me a realistic path to getting there. Do you have tutorials or training at all levels including total newbie? User support groups? Descriptions of each stage and what it takes to reach that stage, both financially (if that applies) and time/effort?

But it doesn't matter how motivating it looks to become really good at this if I can't imagine that I--a mere mortal--could ever get there. You must show me a realistic path to getting there. Do you have tutorials or training at all levels including total newbie? User support groups? Descriptions of each stage and what it takes to reach that stage, both financially (if that applies) and time/effort?

So, does your product, service, or cause need to be motivating? Not necessarily. But the thing-you-will-help-users-kick-ass-in needs to be. We assume that someone, somewhere loves being really good at whatever it is that you can help people get into and get better at. Whatever it is that they love about it, that is your motivating picture, even if it's nothing more than the glorious feeling of control I'll have when I've learned to use your productivity app in a meaningful, productive way.

It won't get them laid, it won't make them an instant millionaire, it won't help them lose 20 pounds (well, maybe that one could be true ; )
But you don't need those claims if you're able to paint a clear, realistic picture of something people will find worth the effort of getting good.

You must do the things you think you cannot do.

... we cannot have passionate users unless we can get our users to take risks. At the very least, we're hoping our users (or potential users) are willing to try something new and then--more importantly--to keep getting better at it! Remember, nobody is passionate about something they suck at. I doubt anyone is really passionate about something they're mediocre at, unless they have a motivation to get better. Part of what defines "passion" is the desire to keep learning, practicing, pushing, doing, growing around the object of our passion. It's only when our users are willing to take some risks--to try something they might suck at--that we have a chance of having passionate users.

How to Sell Products and Services

Selling products and services is easier than people think. Actually, it may be better to run a home-based business than an office-based one.

Steps
1. Choose a product or service that you are interested in. Investigate and research the time and amount of work involved with the product or service. Your passion comes across in everything you do, so come across with the enthusiasm or excitement that will interest others.

2. Research how much money it would cost you to sell or provide the service that you choose. Think about how much money you would make and if it would be enough to live on. If not, just try something else.

3. Organize your time and see how it interferes with your life. Arrange plans and organize your business. This will be helpful in the long run.

4. Figure out what problems that your product or service solves. Said another way, people buy to a large extent to eliminate pain. For example, people in New York City will tend to buy comfortable walking shoes during a transit strike; the shoes will prevent or eliminate the pain caused by walking a long way. For what you plan to sell, list all of the "pains" that your product/service can eliminate.

5. Identify the people or groups of people who might have the pain that you've identified. How can you get to them? Face-to-face, on the phone, through e-mail or a Web site? Identify those people and get to them!

6. Create a script to use with prospects. Introduce yourself, tell them what types of customers you work with (or want to work with). Ask the kinds of questions that potential buyers would ask: "You know, several of our customers ask if we have shoes that eliminate the pain of long walks....But enough about them, are you concerned about the pain associated with long walks? Do you anticipate having some long walks coming up?"

7. Recognize that most people won't have a need for something that you sell. In the case that we're using, most people already have decent "walking shoes." So if they say "no" to your offer, that means that they don't have a need right now! That's it. Their lack of interest has nothing to do with you; they don't hate you, dislike you or reject you. They just don't need what you're selling right now. Don't get your ego "bent out of shape."

8. Buy a computer and set up every kind of computer program that is made for business. There are even packages that are specially made for small businesses.

9. Selling things on the Internet is also helpful for starting a small business. Be sure to search the Internet often. It helps to ask for help and tips, and to get feedback.

10. Get into advertising. Create slideshows and ads to attract customers based on their pain, and what your product or service will do to eliminate that pain. Don't focus on YOU, focus on your prospective customer.

11. Once you have enough customers, you can raise or lower prices, depending how much money you expect to get out of the business and how many customers you have.

How to Find out What Kind of Business to Start

The most important aspect of starting a business is that it must be something you enjoy. If the primary motive is money, but you don't enjoy it - it is a bad fit, and that is a sure formula for failure. However, if it is something you enjoy, you won't run out of enthusiasm. Your creative juices will flow, making your business a cut above the others, and increasing your chances for success.

Steps

1. List your interests. This will help you focus on businesses that will provide the greatest probability for success and eliminate possible failures.

2. List your skills. No one can be all things. If any aspect of business does not within your skill range these are the areas where you will need to get help

3. Assess your personality. Are you a people person, or do you enjoy working alone? Do you love to serve others, or do you find people a pain? One ingredient that is sure to lead to failure is a reclusive or abrasive personality. Think about the people that you have met in business. Who were the ones that you wanted to give repeat business to?

4. Determine how much risk you can tolerate. Going into business can be scary; especially the first couple of years. Some businesses are scarier than others. If you lie awake nights wondering how large loans are going to be paid, or if you're going to be sued, maybe a business with less upfront capital or probability of lawsuit is more for you.

5. Determine how much time your business will require, and ask yourself if you are willing to commit the time. Many businesses require a huge time investment. Can you and your family tolerate a twelve or fourteen hour day schedule?

6. Take some classes. An excellent place to start is SCORE (Service Corps of Retired Executives), an organization that helps educate individuals considering starting a small business. After taking some SCORE classes some people are convinced that starting a small business is for them, while others are convinced it is not.

7. Have a plan. As the old saying goes, if you aim at nothing, you will hit it.

8. Set it up legally. Hire an attorney experienced in setting up businesses. He will guide you through the paper work and make sure things are done properly. A good attorney will not just do the paperwork and determine the business type (Inc, LLC, etc.) but will also advise you on common errors to avoid that can get you into trouble.

Warnings
Keep in mind that the vast majority of new businesses fail. Always maintain a "plan B" just in case.

For retailers, two out of five isn't bad

To attract a loyal consumer following, U.S. retailers must dare to be ... average?

That prescription, along with the fact that shoppers prefer well-marked prices to low prices, and will select "good enough" merchandise over the "very best," stands out among the findings of a new study by AlixPartners.

The study's results, due to be released Thursday, reveal shifts in consumer desires regarding the five key retail attributes of price, product, service, access and overall shopping experience. As new priorities have emerged for shoppers, many issues that weren't previously on consumers' radar are now lighting up the screen, according to research conducted by Alix, a corporate turnaround and financial advisory firm based near Detroit.

Consumers across the U.S., according to Alix, expressed frustration with such retailer missteps as restricted access to merchandise, cutbacks in staffing, difficult return policies and confusing pricing.

Fred Crawford, managing director at AlixPartners, said that, among the attributes associated with the industry, retailers should put their time and resources into excelling in two areas, advising them simply to meet expectations in the other three.

"If you're spreading precious assets, peanut-butter style, evenly across all five attributes, you're either wasting money or, worse, condemning all five to mediocrity," Crawford said. Investors should also take heed, Crawford said, because the companies that scored the highest on his "consumer sentiment index" also created the greatest shareholder value.

Companies getting it right include Wal-Mart Stores Inc., which exceeds expectations in price, product and access, allowing shoppers to "chore stack."
"People might not enjoy shopping at Wal-Mart, but they can get so many things done there, they tolerate it," Crawford said. "Love them or hate them, Wal-Mart really dominates the consumer psychology."

Target Corp., meanwhile, has excelled by offering higher-end products, better service and a more pleasant shopping experience.
Kmart, owned by Sears Holdings, fell below expectations on all counts.

"For retailers, the margins on providing services to consumer are very attractive. People have less time, more disposable income, and they want to invest in their homes," Crawford said. "They also don't want to spend three Saturdays in a row assembling an entertainment system."

There is also room for small players to succeed, Crawford said. Some smaller standouts include True Value and Academy Sports & Outdoors
"If it were my money, I'd invest in a market basket of companies that exceeded expectations," Crawford said. "If I were a private-equity company or a hedge fund, I'd look at (convenience store operator) Wawa and Academy Sports; both are private and both have scalable models."

Crawford said that a private-equity investor seeking a turnaround project might look at BJ's Wholesale or OfficeMax

source:http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B42E929F7%2D787E%2D4957%2DA78C%2D8B342EA4EAE2%7D&siteid=mktw&dist=&print=true&dist=printTop

Evaluating Businesses

Notice that the title of this step is "Evaluating Businesses," not "Evaluating Stocks." Though evaluating a stock is most often the way that investment research is phrased, Fools know that when you buy a share of stock you are really buying a piece of a business.

To figure out how much the stock is worth, therefore, you first need to determine how much the whole business is worth. You can begin this process by assessing the company's financials in terms of per-share values to calculate how much the proportional share of the business is worth. (For hands-on help, check out our Crack the Code: How to Read Financial Statements Like a Pro How-to Guide.)

If you own one share of Wal-Mart (NYSE: WMT) stock, you, along with members of founder Sam Walton's family and many other shareholders, own the company. True, the Walton family owns more of it than you do. A lot more. But, your share still counts. When important decisions are to be made, the company will send you a ballot and solicit your vote. And, every time a shopper buys a snorkel, a stereo, or a set of towels at Wal-Mart, a tiny fraction of the profit that purchase generates is yours. A very, very tiny fraction. But, don't let that get you down -- there are a lot of Wal-Mart shoppers.

The fate of each share of stock is tied inextricably to the fortune of the underlying business, and the market's perception of the future prospects for that business. A common mistake investors make is thinking of shares of stock merely as slips of paper that fluctuate in value, instead of as very real chunks of actual ongoing businesses. Don't make this mistake.

It All Boils Down to Price and Quality
As you learn more about how to study companies, you'll run across many different measures and tools that investors use in their evaluation. These tools might include P/E ratios, return-on-equity, cash-flow valuations, and so on. At first, all the valuation tools in your mind might end up in a big clutter. You'd do well to try and sort them into two categories eventually, though: price and quality. Here's why:

Bearing in mind that there are really only three kinds of people in the world -- those who can count and those who can't -- there are three main questions you need to answer before you decide whether to invest in a company:

Is this a strong and growing high-quality company?
Is the company's stock priced attractively right now?
(We stole the above joke from Warren Buffett's 1998 annual letter to his Berkshire Hathaway (NYSE: BRK.A, BRK.B) shareholders. At some point, if you really want an education in evaluating businesses, instead of going to business school, just read Mr. Buffett's collection of annual letters.)

If you don't make a point of addressing these questions (however many there were), you might end up buying grossly overvalued shares of a wonderful company, or you might snap up shares of a business that's about to be cut in half at what seems like a bargain price.

Quality
There are a number of ways that you can zero in on a company's quality. Is it debt-free or up to its ears in interest payments? Does the firm have a lot of cash? Is it generating a lot of cash and spending that money efficiently? Are sales and earnings growing at an admirable clip? Are gross, operating, and net profit margins growing, as well? Is the management smart and executing well? Is the company well-positioned to beat out competitors? Does the company have a brand name that is widely known and admired?

These are just some of the many measures you can take when evaluating a company's quality.

Price
When evaluating a company's price, you shouldn't be interested in how many dollars one share costs -- you need to measure the per-share cost of a stock against something. Investors typically take a number of measures and compare them to the firm's earnings. The price-to-earnings (P/E) ratio, for example, compares a company's stock price to its earnings per share. Some companies aren't properly valued based on their earnings, though (because there may not be any), and often the price-to-sales ratio is used. Another earnings-based ratio is the PEG, which compares the P/E ratio to the company's earnings growth rate.

You can also evaluate price by estimating the company's earnings for all the years ahead and then discounting them to their present value. A company's stock price is essentially a reflection of all its expected future earnings, discounted at an appropriate rate. If your calculations suggest the total discounted earnings of a company will result in a valuation of $80 per share, and the stock is currently trading for $60 per share, you're possibly looking at a real bargain.

Value
Once you have a handle on a company's quality and its price, you can begin to make a judgment on what the intrinsic value of the company should be. Before we go any further, know that there are many different investing styles, and many different ways to value stocks. Some investors focus primarily on finding undervalued companies, paying close attention to a stock's price. Others consider price, but focus more on the quality of the business. Both of these are Foolish approaches.

What is un-Foolish is simply to look for rapidly growing companies, regardless of price or quality, or to only examine charts of a stock's price movements and its trading volume.

Learning More
Success in analyzing individual businesses and ultimately investing in them is about buying what you understand the best and constantly refining and adding to your knowledge about companies.

Here are some steps you can take to broaden your range of understanding:

Try out the company's product(s) or service(s). Be familiar with how it is improving and what the demand for it is.
Read up on the company. Find books and articles on it.
Check out our discussion boards for any company you're interested in. Online, you can and should ask questions of fellow Fools. In particular, check out the Frequently Asked Questions (FAQ) post that is linked to on the side of many individual company message board posts. (Remember, we offer a painless free trial to our discussion boards, where we suspect you'll find a lot of value.)
Figure out what the company's business model is. How is it making money? How is it organized? How might the model change in the years ahead? On what assumptions is the model based?
Examine the company's competitive environment. What are its competitors up to? Is the company likely to fend off attacks? What advantages does the company have over the competition? Is it at any disadvantage? How is the industry changing and what challenges does it face?
Think about the company's risks. In SEC filings, particularly 10-K reports, the company's management will have explained some risks that they see.
Crunch a bunch of numbers. See just how quickly sales are growing. See what the firm's debt-to-equity ratio is. Determine what its gross margins are.
Talk to people in the business, such as company employees, suppliers, people in stores that sell the company's products, customers of the company, people familiar with competitor companies, and so on. See how they perceive the industry and where it's headed. See what they think of the company you're studying and its future prospects.
That may seem like a lot to put together -- but remember, that's what this forum is all about, helping Fools understand and put it all together. To learn more about closely studying and evaluating businesses, move on to Step 10: Understand Rule Maker Investing.

Also, if you'd like some company as you seek out promising stocks, check out some of our research offerings, such as our well-regarded newsletters: Tom Gardner's Motley Fool Hidden Gems, The Motley Fool Stock Advisor, Motley Fool Income Investor, and our many other offerings. We back them up with money-back guarantees.

source:http://www.fool.com/school/13steps/13steps09.htm

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The Secret of Happiness

After psychologist Steven Reiss survived a life-threatening illness, he tooka new look at the meaning of life. Now, based on a survey of more than 6,000 people, Reiss offers new insights about what it really takes to be happy.

Sometimes we are so consumed with our daily lives that we forget to look at the larger picture of who we are and what we need to be happy. We work, raise our children, and manage our chores, but it takes an extraordinary event such as a life-threatening illness, or the death of a loved one, to focus our attention on the meaning of our lives.

I faced death for the first time when I was told I needed a liver transplant a few years ago. I thought about the meaning in my life and why I lived the way I did. I started to question the Pleasure Principle, which says that we are motivated to maximize pleasure and minimize pain. When I was ill, I discovered exactly why I wanted to get better and continue living, and it had little to do with pleasure or pain.

Pleasure theory has been around since the days of ancient Greece and is well-represented in modern-day society and academic psychology. Socrates pondered the idea that pleasure is the basis of morality; he wondered if pleasure indicates moral good and pain indicates evil. Epicurus, the greatest of all pleasure theorists, believed that the key to a happy life was to minimize stomach distress, or anxiety, by changing one's attitudes and beliefs. His rational emotive philosophy was popular for 700 years in ancient Greece and Rome.

More recently, Playboy founder Hugh Hefner used pleasure theory to justify the sexual revolution of the 1960s. Psychologist N. M. Bradburn said that the quality of a person's life can be measured by the excess of positive over negative feelings. So is maximizing pleasure and minimizing pain the ultimate key to human happiness? No. When I was in the hospital analyzing what made my life satisfying, I didn't focus on the parties. In fact, pleasure and pain were not even considerations.

If pleasure is not what drives us, what does? What desires must we fulfill to live a happy life? To find out what really drives human behavior, my graduate students and I asked more than 6,000 people from many stations in life which values are most significant in motivating their behavior and in contributing to their sense of happiness. We analyzed the results to learn how different motives are related and what is behind their root meanings.

The results of our research showed that nearly everything we experience as meaningful can be traced to one of 16 basic desires or to some combination of these desires. We developed a standardized psychological test, called the Reiss Profile, to measure the 16 desires. (See "The 16 Keys to Happiness," page 56.)

Happiness defined

Harvard social psychologist William McDougall wrote that people can be happy while in pain and unhappy while experiencing pleasure; To understand this, two kinds of happiness must be distinguished: feel-good and value-based. Feel-good happiness is sensation-based pleasure. When we joke around or have sex, we experience feel-good happiness. Since feel-good happiness is ruled by the law of diminishing returns, the kicks get harder to come by. This type of happiness rarely lasts longer than a few hours at a time.

Value-based happiness is a sense that our lives have meaning and fulfill some larger purpose. It represents a spiritual source of satisfaction, stemming from our deeper purpose and values. We experience value-based happiness when we satisfy any of the 16 basic desires--the more desires we satisfy, the more value-based happiness we experience. Since this form of happiness is not ruled by the law of diminishing returns, there is no limit to how meaningful our lives can be.

Malcolm X's life is a good example of both feel-good and value-based happiness. When racial discrimination denied him the opportunity to pursue his childhood ambition of becoming a lawyer, he turned to a life of partying, drugs and sex. Yet this pleasure seeking produced little happiness--by the age of 21, he was addicted to cocaine and sent to jail for burglary. He had experienced a lot of pleasure, yet he was unhappy because his life was inconsistent with his own nature and deeper values. He had known feel-good happiness but not value-based happiness.

After reaching rock bottom, he embraced the teachings of the Nation of Islam and committed himself to his most fundamental values. He led his followers toward greater social justice, married, had a family of his own and found happiness. Although he experienced less pleasure and more anxiety as a leader, he was much happier because he lived his life in accordance with his values.

The 16 basic desires make us individuals. Although everybody embraces these desires, individuals prioritize them differently. Al Gore, for example, has a very strong desire for power. This desire makes him happy when he is in a leadership role, when he gives advice to others, or when he shows how competent and smart he is. George W. Bush has a strong desire for social contact. This desire makes him happy when he socializes and unhappy when he spends a lot of time alone. The two politicians place very different values on the basic desires of power and social contact, which is reflected in their personalities--Gore tends to be overbearing and overeager to get ahead, and Bush tends to be a good ol' boy.

Although everybody wants to attain a certain status, individuals differ in how motivated they are to obtain it. Jackie Kennedy Onassis, for example, had a passion for status--she needed to be wealthy to be truly happy. By obtaining wealth, she thought that she could satisfy her deep desire for respect from her upper-class peers. She spent much of her life pursuing wealth by marrying two multimillionaires. In contrast, Howard Hughes did not care much about status-he didn't care about what people thought of him and spent little time trying to earn their respect. While Jackie Kennedy Onassis placed high value on gaining status and the respect of her social peers, Howard Hughes had both but neither made him happy.

Revenge is another goal that motivates people differently. Now that Regis Philbin has hit the big time with his show "Who Wants To Be A Millionaire," why does he keep reminding us of the times he had been passed over earlier in his career? By embarrassing those who lacked faith in him, Philbin is gaining a measure of revenge. In comparison, John F. Kennedy Jr. did not go after people who criticized him or his family. Revenge can be fun, but it is more motivating for some than for others.

The 16 basic desires

You cannot find enduring happiness by aiming to have more fun or by seeking pleasure. What you need to do, as the 19th-century philosopher J.S. Mill observed, is to satisfy your basic desires and take happiness in passing. First, use the quiz to figure out who you are (see quiz, page 56). Find out which of the 16 desires provide the most meaning in your life. How strongly are you motivated to obtain a successful marriage, career or family? Do you love a good meal and dining out? Must you be physically fit to be happy? Fortunately, you do not have to satisfy all 16 desires, only the five or six most important to you.

After you identify your most important desires, you need to find effective ways to satisfy them. There is a catch, however. Shortly after you satisfy a desire, it reasserts itself, motivating you to satisfy the desire all over again. After a career success, for example, you feel competent, but only for a period of time. Therefore, you need to satisfy your desires repeatedly.

How can we repeatedly satisfy our most important basic desires and find value-based happiness? Most people turn to relationships, careers, family, leisure and spirituality to satisfy their most important desires.

Since we have the potential to satisfy our basic desires through relationships, we can find greater happiness by finding new relationships or by improving the ones we already have. After looking at the 16 basic desires and estimating the five or six most important to you, do the same for your partner, or have your partner take the quiz. Compare the two lists-the strengths of your relationship are indicated by similar desires, and the weaknesses are indicated by disparate desires.

Shelly and Sam are a good case in point. Before they married, both placed value on romance, fitness and socializing, but they differed on whether or not they should have children. Shelly secretly thought she could change Sam's mind. When Sam still did not want children after a few years of marriage, Shelly did not take her birth control pills one night and ended up having a baby boy. Sam loved his boy, but he didn't enjoy raising him.

What can Shelly and Sam do to improve their relationship and regain happiness? Counseling is worth a try, but even with the best counselor it will be difficult for them to resolve their differences. Their problem is that they prioritize the basic desire for family differently-one enjoys raising children, the other doesn't. The desire for family, which is not easily changed, has pulled them in different directions, turning a happy marriage into an unhappy one. Their best bet to improve their relationship may be to set aside time for activities that satisfy the desires that bind them. If they set aside time to put the romance back in their lives, maybe the strong points in the relationship will outweigh the weak ones. Ultimately, that is the judgment we all must make, because few relationships are perfect.

Our basic desires can also be satisfied through work. Steven Spielberg, for example, honored his Jewish heritage when he made the movie Schindler's List, the Academy award-winning film about the Holocaust. When Spielberg thinks about this accomplishment, he feels a sense of loyalty to his Jewish heritage, an intrinsically valued feeling that satisfies the desire for honor.

Rocky Graziano also found valued-based happiness through his career. Graziano was a fighter--that was who he was and who he wanted to be. He was an unhappy juvenile delinquent who got himself into fistfights. But when he became a boxer--rising to the rank of middleweight champion--he finally found work that provided a socially acceptable means for him to satisfy his passion for vengeance. Fighting had gone from a source of displeasure to a source of happiness in his life.

One way to become happier is to find a job or career that is more fulfilling than the one you have now. To do this, you need to analyze how you can use work to better satisfy your five or six most important basic desires. If you have a high desire for acceptance, for example, you need work that exposes you to little evaluation and potential criticism. If you have a high desire for order, you need work that involves minimal ambiguity and exposes you to few changes. If you are a curious person, you need a job that makes you think.

Our basic desires can also be satisfied through leisure activities. Watching sports, for example, provides us with opportunities to repeatedly experience the intrinsically valued feelings of competition, loyalty, power and revenge. When Brandi Chastain kicked the winning field goal and the United States won the 1999 World Cup in women's soccer, a surge of power went through the nation like a bolt of lightning--the crowd roared and people thrust their fists powerfully into the air. Sports produces more or less the same range of intrinsically valued feelings in fans as they do in players, which is why so many people watch.

One of the deepest ways to satisfy our desires is through spirituality. We can satisfy the desire for honor by embracing the religious denomination of our parents. A psychologically important attribute of religion is the emphasis given to the desire for unity, or to open one's heart to God. At least for some, faith is a path toward greater value-based happiness.

Value-based happiness is the great equalizer in life. You can find value-based happiness if you are rich or poor, smart or mentally challenged, athletic or clumsy, popular or socially awkward. Wealthy people are not necessarily happy, and poor people are not necessarily unhappy. Values, not pleasure, are what bring true happiness, and everybody has the potential to live in accordance with their values.

READ MORE ABOUT IT

Who Am I: The 16 Basic Desires That Motivate Out Happiness and Define Our Personalities, Steven Reiss, Ph.D. (Tarcher/Putnam, 2000)

The Art of Happiness: A Handbook for Living, His Holiness the Dalai Lama and Howard C. Cutler, M.D. (Riverhead Books, 1998)

the 16 keys to happiness

To increase your value-based happiness, firs read the following statements and mark whether they describe you strongly (+), somewhat (0), or very little (-). The ones that describes you strongly show the keys to your happiness-you should aim to satisfy these to increase your happiness. Some tips to help you do this can be found in the main article, and more can be found in author's book, Who Am I: The 16 Basic Desires That Motivate Our Happiness and Define Our Personalities.

CURIOSITY I have a thirst for knowledge. -----

ACCEPTANCE I have a hard time coping with criticism. -----

ORDER It upsets me when things are out of place. -----

PHYSICAL ACTIVITY Physical fitness is very Important to me. -----

HONOR I am a highly principled and loyal person. -----

POWER I often seek leadership roles. -----

INDEPENDENCE Self-reliance is essential to my happiness. -----

SOCIAL CONTACT I am known as a fun-loving person. -----

FAMILY My children come first. -----

STATUS I am impressed by people who own expensive things. -----

IDEALISM Compared with most people, I am very concerned with social causes. -----

VENGEANCE It is very important to me to get even with those who insult or offend me. -----

ROMANCE Compared with my peers, I spend much more time pursuing or having sex. -----

EATING I love to eat and often fantasize about food. -----

SAVING I hate throwing things away. -----

TRANQUILITY It scares me when my heart beats rapidly. -----

Adapted by Ph.D.

Steven Reiss, Ph.D., is a professor of psychology and psychiatry at Ohio State University, where he directs the university's Nisonger Center.

Publication: Psychology Today
Publication Date: Jan/Feb 2001
source: http://www.psychologytoday.com/articles/pto-20010101-000032.html