# Personal Portfolios: The What and Why of Positive Psychology

Source: https://integrityfinancialplan.com/insights/personal-portfolios-the-what-and-why-of-positive-psychology
Last updated: 2024-04-18

Much of investing has historically been driven by what people do not want to invest in.


Topic: Investing. Published 2024-04-18.

## Key takeaways

- Positive psychology studies what makes life worth living; the SPIRE model covers spiritual, physical, intellectual, relational, and emotional wellbeing.
- Most values-based investing has focused on what to exclude; IFP also asks what you want your money to be for.
- Personal Index Portfolios combine low-cost indexing, active tax management, and your values in a single account of individual stocks.
- A written Investment Policy Statement and a financial personality assessment connect the portfolio to the life you are trying to build.

## The What and Why of Positive Psychology
“Positive psychology is the scientific study of what makes life most worth living” – Christopher Peterson

Positive psychology takes a scientific approach to studying human thoughts, feelings, and behavior, with a focus on strengths instead of weaknesses and building the good instead of repairing the bad. Studies prove that when humans take an approach-based mindset versus an avoidance mindset, it helps people better achieve their goals. It asks the question, “What are you driving toward” versus “What are you avoiding?”

The SPIRE model of positive psychology boils down the different dimensions that contribute to happiness and wellbeing.

**S**piritual wellbeing: Meaning and what you most value

**P**hysical wellbeing: Health and vitality of your body

**I**ntellectual wellbeing: Creativity and learning new things

**R**elational wellbeing: The harmony and support of your relationships

**E**motional wellbeing: Feelings and attitudes

Much of investing has historically been driven by what people do not want to invest in. We believe that in order to help people be happier, the focus should be more balanced. Our four financial personality traits (Purpose, Security, Touch, Viewpoint) encompass these different dimensions to help people understand what approach to their finances will help them feel more fulfilled.

## Building Your Personal Index Portfolio

[Personal Index Portfolios](/services/personal-index-portfolios) combine the best features of low-cost indexing, [active tax management](/services/personal-index-portfolios), and the inclusion of your environmental, social, and faith-based views.

Research has long shown that trying to beat an index's performance using active portfolio management is ultimately a “losers game" and that taxes and other costs dramatically reduce portfolio performance over time compared to index investing.

Instead of spending our efforts on outcomes we can’t control (e.g., beating the market), we focus on the things we can control. We document those in a written Investment Policy created specifically for you. We are not stock pickers or market timers; our role is to manage your portfolio according to this written plan, serving as your fiduciary.

Our scientifically backed financial personality assessment for investing (similar to a Myers-Briggs® Type Indicator) is designed to draw the strongest positive connection between you and your money. Before we start the investment process, we take the time to understand what drives your financial decisions along these dimensions:

- **Purpose**: having a positive impact on the world through ethical and Socially Responsible Investing
- **Faith**: Ensure elements of your faith are reflected in your portfolio
- **Security**: Understanding your need for security and peace of mind
- **Touch**: Linking your investing with a desire for meaningful relationships
- **Viewpoint**: Exposure to themes you feel are changing the world

If you want to learn more about your Financial Personality, [**we invite you to take our assessment here**](https://survey.positivly.com/?channelId=24b15bcb-14cf-4750-aea8-a46e533d31bf&utm_source=advisor_test). It's short (~3 minutes) and completely free. We will share the results with you regardless. If you would like to dig deeper to understand how we use this information to build personal index portfolios, we welcome the opportunity to speak with you.

*This content is developed from sources believed to be providing accurate information and provided by Integrity Financial Planning, LLC and Twenty Over Ten. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.*