The magic of enough: Author Brian Portnoy on wealth

If you are like many investors, you obsess over stock fundamentals. Here is a better tip: Look in the mirror.

So says author Brian Portnoy, director of education at Virtus Investment Partners, in his new book "The Geometry of Wealth." His point is that while investment selection is important, a bigger factor in your success is keeping yourself from making the wrong money choices at the wrong time.

Here, he talked about how understanding our own irrational money impulses can set the table for a happier life.

Q: One of your main points is that being wealthy does not equal being rich?

A: "Rich" is just a quest for getting more and more, while "wealthy" means being able to afford a meaningful life. So I describe true wealth as "funded contentment," aligning your money life to your deeper sources of happiness. And that is different for each person.

Q: You pose the question, "Is a meaningful life affordable?" – so what is your answer to that?

A: The answer is yes, and more so than people think. But you have to focus on experiences over material things, on expressing gratitude and being generous, and truly appreciating the value of time. People usually just think about money, but time is a fantastic source of flexibility and leverage in terms of getting the things you want out of life.

A: Most people start with figuring out the right place to invest — and that is important, but it is actually the end of the process. First, you have to understand your own behavior. For instance, most people find it hard to focus on the long-term and dislike diversified portfolios. So behavior matters much more than people realize, and portfolio construction pales in comparison to simply controlling your own negative behaviors.

Q: What is some actionable advice you want people to implement?

A: Have a plan, which comes before any actual investments. And second, you need two pillars of diversification and risk management. In other words, be diversified across broad ranges of the markets — stocks, bonds, cash — in a way that is aligned with your risk tolerance.

Q: What do you want readers to come away with?

A: People need to really think about what it means to have enough. If you can align your money with your purpose, you might find that "enough" is a pretty pleasant place to be.