Mrs K is a recently retired 65 year-old widow from Brisbane, Australia with four adult children (aged 40, 38, 36 and 34). She rents a 2-bedroom townhouse and lives alone, has a simple lifestyle, and no income beyond what her conservatively invested pension fund of $1 million produces (approx. $30,000 per annum) and a government support payment of about $10,000 per annum. Note: Mrs K's pension fund was significantly bolstered by a significant compensation payout upon the passing of her late husband in the workplace. Since losing her husband, Mrs K has understandably been very upset by the traumatic experience and is worried about her mental health. Mrs K has become distant from her children, extended family, friends and hobbies, and spends most of her time at home fretting about how she is going to manage her finances. She is particularly concerned about the implications of her pension fund in terms of estate planning and leaving an inheritance for her adult children. Mrs K is also a quiet, cautious person, who is often set in her ways and stubborn in her opinions at times.

Mrs K's primary investment objectives are: (1) to not lose money; (2) not to take risks; and (3) to maintain the purchasing power of the pension fund so that it can produce an income and provide an inheritance for her adult children upon her passing. Her desire to not lose money or take risks is driven by her childhood experiences. For instance, Mrs K emigrated to Australia from a non-English speaking country when she was 25 years-old. She recalls that her parents grew up in a working class family and she was one of six children, with money always being scarce. After paying the bills, Mrs K's parents never had any money to save and demonstrated a limited understanding of budgeting and household finances. This has essentially contributed to Mrs K having struggled with managing her own personal finances throughout her life, admitting that she has minimal education, low financial literacy and limited confidence when it comes to the concepts/knowledge/skills required to make sound investment decisions and participate in financial markets. Mrs K also does not trust banks and financial advisers and believes that seeking professional financial advice is too costly and intimidating.

One of her tendencies is to spread the income generated from her pension fund around various banks, and she regularly speaks about various buckets of money; such as one for generating her income, one for gifts to her children and grandchildren, and one for paying her bills. As Mrs K is highly conservative in her investment approach (e.g., she has 100 percent of her pension fund in cash), she may not able to accomplish one of her primary investment objectives; that is, maintaining her purchasing power. In the long run, by taking this approach, there is a risk that her pension fund will not keep up with her spending after fees, inflation and taxes. Therefore, she is putting herself at risk to outlive her assets. A 'rational' asset allocation based on Mrs K's primary investment objectives would require more risk to be taken, being consistent with an allocation of more like 75 percent in bonds, 15 percent stocks, and 10 percent cash. It is also apparent that certain behavioural biases (e.g., loss aversion bias and mental accounting bias) are influencing Mrs K's investment decision-making, thus not permitting her to feel comfortable with changing the asset allocation associated with her pension fund.

Question: how does subjective wellbeing impact investment decision making and how could it be improved? Further would improving subjective wellbeing as a result of making better investment decision lead to greater life safisfaction?