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Money = happiness, yes I really mean it!

You should quit your job, my friend told me over coffee. You are working way too much, you are not even spending time with your husband and it will spoil your health.

How did you figure that out? I asked.

I know how it feels to work 80+ hr weeks. I did it for 6 months, it was horrible. [And she assumed I was miserable too, but before I could belabor that point she continued…] You don’t need to work, your husband is earning enough, why don’t you just quit and take it easy for a few years. What are you chasing? Why do you care so much about money? Money is not everything you know. Money doesn’t bring happiness. You should quit, relax a bit and enjoy life.

Ah. Money and happiness. That is one of my favorite topics :) Does money make us happy? So much has been written about how money doesn’t make us happy, so much research has been done on money and happiness and papers have been published with the same conclusion again and again – Money doesn’t buy happiness.

I am going to say money DOES make me happy. That might sound like a selfish proclamation, but hear me out.

First of all, what is happiness? Personally for me, it is not just one emotion.

  • When I take up all the expenses and pledge to care for a mentally challenged kid in a developing country, that doesn’t make me happy. It makes me sad that the kid has to go through this & it makes me grateful to be in a place where I can do something about it.  I also feel immense pride every time I see an accomplishment from the kid.
  • When I know that I can pay all the bills for a few months even if I get laid off today, that doesn’t make me happy, that makes me feel secure.
  • Yes, there are lot of frugal ways to show love, but I do love it when my husband surprises me with flowers and a fancy dinner out.
  • I would love to pay for first class plane tickets for our parents when they visit us because it is a long flight.

We cannot appreciate the beauty of a full moon if we have never experienced a new moon. Just one emotion doesn’t make my life complete. All these emotions make me feel alive, make me happy and provide me with opportunities to have a lot more than happiness.

So why do people say that money doesn’t bring happiness?

Since 1954 personal income has almost tripled but happiness has remained the same.

 

happiness vs income

(Source : New Scientist)

And people reported that everyday emotional experience did not improve beyond an income of approximately $75,000 a year[this link is a PDF].

I am going to assume that when people say money doesn’t buy happiness, they mean money literally cannot buy happiness. This conclusion is derived from all the research done by surveying people at different times and in different countries.

In my opinion, there are a few missing pieces in the research

  • Relative Income : Most of these surveys assume that the happiness quotient is related to absolute income. But in reality that is not true. We always compare ourselves with our peers – colleagues, high school friends, neighbours… Yes, we say we are not keeping up with the Joneses and that could be true up to a certain point. But how many of us want to be the poorest among our friends.
  • Adaptation : In psychology, it is called as “hedonic adaptation”. Wikipedia explains this concept as the supposed tendency of humans to quickly return to a relatively stable level of happiness despite major positive or negative events or life changes.I understand this is a proven concept, but I have difficulty in accepting the hedonic adaptation as a reason to not make more money. I understand earning more money for the sake of having more won’t increase my happiness, but what I do with the extra money can certainly bring me a lot of happiness.
  • Trading happiness for money : This is not mentioned in the research papers I’ve seen, but I see a lot of people associating more money with unhappiness. Why? Why does it have to be mutually exclusive? People aspiring for more money are seen as evil. But if I love what I do for your living and it brings in more money, why am I categorized as evil or unhappy?

If earning more isn’t making you happy you are probably not spending it right. If you have a lot of money but are unhappy, the main problem is NOT money, it means you don’t know what will make you happy and spend money on the wrong things. We blindly follow what makes “others” happy thinking that it would have the same effect on us.

What makes me happy?

A lot of people like to quote the Mexican fisherman and the American tourist story. (If you haven’t heard the story before go ahead, read it, I will wait. It is a really inspiring story). Now that you are back, what do you get from the story? Personally for me, if I enjoyed fishing and I am good at it, I will do it a little longer and donate the money I don’t need for those less fortunate than me.  If what I am doing to make money is something that I enjoy how can doing less of it make me more happy? And I might be treading a fine line here, but, in my opinion, I feel that if I have the ability to help others who deserve it, financially or otherwise, I feel it is my responsibility to do so. Yes, my happiness might not be proportionally high when my wealth & happiness are compared to that of the fisherman, but I know it makes me more content with my life when I can help others.

If Warren Buffett and the Mexican fisherman are equally happy, I would rather be Warren Buffett than be the Mexican fisherman.

 

happiness vs income 2

 

It all boils down to mindful spending. I spend money on things/stuff/experiences that help others around me, makes me feel good, content with my life, makes me healthy and secure. Nothing can force/guarantee happiness. It is what we make out of what is available to us that makes all the difference. I use my money to make my life and others’ lives better. So as long as I am not making myself and others miserable in my ambition to wealth, I will keep earning money and I will strive to earn more. If that is wrong so be it.

Money is a tool. How we use money to make us happy is in our hands. I am spending it on things that make me happy, so yes, money = happiness for me.

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