A rich life is a happy life.  There are many people that are financially wealthy and miserable.  In contrast, there are many people that are financially broken and yet you cannot wipe the smile off their face.  If you have clothes to wear, food to eat, a roof over your head, and a few friends or family to share some laughs with, more money would only have a marginal effect on your overall sense of well-being.

Some studies suggest only 10% of our happiness is based on circumstances like financial status.  This makes sense.  Tabloids, reality TV, and social/network media have done their part to showcase the ingrates of the rich and famous.  It would appear, the ‘Rich’, in financial terms, have just as many addicts, divorcees, and suicides in ratio to the healthy and happy, if not more. 

Here are some easy ways to maximize happiness and instantly become richer than thousands of millionaires:

• Buy more memories and fewer things:  Material goods depreciate, experiences appreciate.
• Give:  spending money to help others consistently produces strong, positive feelings.
• Balance small and large pleasures:  a good mix of frequent low cost indulgences with big reward items (vacations) produces happier people.
• Live below your means:  debt is a happiness killer.  Saving and paying in cash builds anticipation, leads to smarter choices, and increases gratification. 

Go live it!

Over the past three trading days, the stock market has experienced the 6th and 9th biggest collapse in wall street history.  Most portfolio gains over the past 18 months have been wiped out in just three days.  More than 1 trillion in wealth obliterated.  So what do we do? 

We ‘buy on the dip.’

However, to buy on the dip, we need to filter out the financial noise that is crippling our monthly net cash flow.  The only way to do this is to sit down with your spouse, without distractions, and honestly discuss your current financial situation. 

Investors generate the most wealth when they buy on the dip.  Here are two forms that can help you get into financial position to capitalize on the current cycle.  Good luck.

Monthly Expense Sheet

Daily Expense Sheet

Just ask Carl Icahn, who was the only qualified bidder at a landmark auction in February 2010.  At an unimaginable level, Mr. Icahn used 150 million in cash to purchase the bankrupt and unfinished Fontainebleau Resort in Las Vegas.  A staggering 1.7 billion had already been pumped into the 70% complete resort.  It’s not often you can purchase real estate at a 90% discount.

With today’s unpredictable economy, cash is king.  Cash provides more flexibility in purchasing, loan qualifications, and mitigates financial risk.  If you have a decent amount of cash, you may find yourself in prime position to invest in real estate.

There may never be a period of time in our history with epic level interest rates and reduced home prices.  The down side, due to their own greed and subsequent economic Armageddon, is trying to secure a loan from a bank.  Many banks and lenders are now mandating 20% down, and that is if you have perfect credit.  Any hiccups in your credit history, forget it, unless of course, you have cash.

According to the NAR survey, the median sales price of a vacation home in the U.S. was $150,000 in 2010, down 11% from $169,000 in 2009.  Nearly 40% of vacation home buyers paid cash in 2010, up from 29% in 2009.  Smart money is leveraging cash.

If you believe the housing market is cyclical and the economy is rebounding, then the best place to stash your cash is in real estate.  Traditionally, it’s a better return than current bank account interest rates, less scary than the stock market, provides income potential, and is at rock bottom prices right now.  With the added surplus of short sales and foreclosures, cash is your competitive edge over other buyers. 

Tip:  Save big, leverage cash, and invest in a deflated economy.

Are we the ‘punching bag’ for the banking industry?  They’ve raised our interest rates, they close our unused accounts, they reduce our open balance or lines of credit, even penalize us for paying off our balance timely.  Yet most of us continue to be abused by the banks and credit card companies versus search for an alternative.  Could prepaid cards will be the answer?

Prepaid cards are reloadable cards that can be used anywhere credit or debit cards are accepted.  Over 17 million Americans don’t have bank accounts.  This number may increase as consumers become less patient with bank’s widening list of fees, more savvy and confident in online banking, and understand the benefits of prepaid cards. 

Benefits:  Less fees, less expensive than check-cashing stores, direct deposit ready, online shopping, pay bills, anonymous, no interest payments, no overdraft, living within your means.

Drawbacks:  Reloading fees, cash withdrawal fees, less consumer protection.

Banks can no longer ignore the increased popularity of prepaid cards.  According to the Federal Reserve, no other form of non-cash transactions has grown faster than the Prepaid Card.  With an annual growth rate of 21%, companies like American Express have stepped up to offer a prepaid card with no activation fees, free if you purchase online, roadside assistance, theft or damage coverage, and trip planning services.

Carrying credit card debt is the fastest way to cripple your financial future.  Prepaid cards can offer a legitimate solution for some people attempting to get or keep their finances on track.  Live more than just within your means.  Live below your means and you’ll always own your financial future, not the bank.