Turns out, you can buy happiness with money & rich people are happier with even more money
It seems money does buy happiness after all, but there’s a catch. I put the entire Instagram caption here for your convenience – it is pretty much the article itself, but missing the cute graph that shows you how rich people are even happier than you can imagine with all of their money.
● @bloombergopinion‘s Justin Fox writes: That money can’t buy happiness is an age-old trope. Since the advent of modern public-opinion research, scholars have been trying to test it—with varying results.⠀
● One issue is that happiness may have different aspects. In a much-cited 2010 paper, psychologist Daniel Kahneman and economist Angus Deaton (both winners of the Nobel Prize in economics) looked at Gallup surveys and found that while Americans’ assessment of life satisfaction went up in lockstep with income, their emotional well-being plateaued after a household income of about $75,000 a year, around $90,000 in today’s dollars. Emotional well-being was measured by asking about feelings experienced the previous day, then classifying the responses by whether they exhibited positive affect or blue affect (worry and sadness) and stress.⠀
● Around when Kahneman and Deaton were doing this research, Harvard psychology doctoral student and former software product manager Matthew Killingsworth was developing a measurement tool, an iPhone app called Track Your Happiness that pings users at random intervals and asks about their activities and feelings, often using a sliding scale for answers. One early finding, published in 2010, was that wandering minds bring unhappiness.⠀
● Killingsworth, now a senior fellow at the University of Pennsylvania’s Wharton School, has since used his app to measure the link between happiness and income. The conclusion, just published in the Proceedings of the National Academy of Sciences, is that while the connection is stronger for life satisfaction than it is for experienced well-being, it doesn’t disappear for the latter after $75,000 or $90,000. Money keeps buying happiness, even for the affluent.⠀
● Illustration: @wylesol_
So my thoughts are as follows:
There are different levels of money security
I see it like this in terms of a Maslow hierarchy applied to money security.
I am obviously using myself as an example here, so please do not take this to mean it should apply to you, nor take offense and say: “BUT I AM SPENDING HOW I WANT! AND I WANT AND CHOOSE TO SPEND NOTHING AT ALL!“… That’s great, but that isn’t how I see things, so I am going to write how I categorized levels of wealth in my head.
A bit more of a detailed explanation:
Obviously the $10M+ people are another level above this, heading into $100M + billionaire territory, but that is not where a lot of us are going to end up, hence why I am ignoring the 0.01% level above this. At those kinds of wealth levels, they’re in another stratosphere.
I chose a symbol because I couldn’t find any other one that said it so aptly. Basically, at this level you don’t care about investing or saving any more (not really obsessed by it), you still do it but you’ve really loosened up the reins and you are able to basically buy anything you want within reason and not really feel much of a pinch or significant hardship.
You can weather major money storms ($10,000, even $100K) and feel angst in your heart, but no real financial pain because you have the money to spare. You are donating what you want (big chunks of money), you are giving and buying things people want/need freely without any expectations or strings attached.
You are building generational wealth at this level. You have more than you need in your lifetime, and you are ensuring your family has what they need and more, and you are making sure things are going to run smoothly until you’re gone.
At this level you are more than comfortable. In fact, you are maxing out both retirement accounts, ALL the retirement accounts really, your children’s accounts, and you have JUST enough it seems to do all of this, plus a vacation or two. Obviously, priorities are personal. You may decide to max everything, but someone else at this level who COULD max everything but has to cut back a in terms of not necessarily being able to eat out (or whatever they choose) every single night, to achieve that, makes their own choices to do or not do so. The point is – you have they money to max everything and whether or not you do so, is up to you.
You are likely going on a vacation or two a year at this level, you have the car you want (either you kept your beater car, or you bought something mid-range instead that feels like a major upgrade). You are donating as well to charitable causes and proud you can do so.
You are also buying and gifting people things freely, but it isn’t with wild abandon. You have to still plan and thoughtfully purchase items because you have a budget to adhere to (remember, the maxing out retirement bit), but it isn’t hardship by any means. You’re just careful but not overly so. If you had to cut back on the frills, you could, it wouldn’t hurt you … really.
You now are finally spending at what you think is a minimum level of comfortable living. You are living where you want to be (not necessarily luxurious or extravagant, but it is comfortable and wonderful), you are buying the food you more or less want, with a few luxuries here but it isn’t like you are eating out any time you want and spending $50 each time. You’re planning, but the small luxuries have gone up.
You are now finally able to buy things here and there within your given budget, and not feel any strain, pinch or stress that you can’t make it for the next bill. You have room to breathe and squeeze out money from other areas if need be. Any emergency that arises can be handled, under $1000 or so.
You are not extravagant, but you’re happy.
You’ve eased up VERY slightly on this. I mean, to the point where you now allow yourself a $5 purchase because it won’t break the bank and you did plan for it. Yes your spending fun budget is low, but at least you’ve got one. You can handle emergencies at $500 or so, with some pain but it isn’t devastating.
You now can finally plan to buy things you want, and while you aren’t spending without thinking about bills, investing and savings, you can impulsively buy things here and there, as long as you don’t do it more than once a month. You can finally shift a little money here and there to other places, and life doesn’t feel so hard because being able to at least decide to eat out once a month, or buy 4 coffees a month OR buy 2 books, is a choice you never had before.
Level: Bare bones
This is where you are only paying basic bills. A lot of people in the money community feel guilt and want to keep themselves here for eternity, even as they amass thousands of dollars, and run 50 calculations a night on whether or not they can reach $1M by age 50, but this is not a fun place to be.
You can be here by choice, obviously. You can be here because you CHOOSE to spend nothing, and not even allow yourself the luxury of a meal out here and there, or even things you want (I refuse to say “new clothing” because I choose to buy secondhand even though I can afford “new” all the time and I do not see it as a stigma or anything to be ashamed of); and you are barely scraping by.
One little emergency of even $20, makes you wonder how you’re going to count your dollars at the grocery store, or maybe fill up the gas tank JUST until payday. All of these decisions, minor and constant, weigh on you at this level. Your child asks for $5 for pizza day, and you’re wondering where you can take that money from, or have to tell them “No”. It’s gut-wrenching to be at this level.
Once your basic needs are met, money security is bliss
So what does this all mean? It means that once you have covered your basic bare bones spending of shelter, food, maxing out your retirement accounts, you move up and up until you finally reach Comfortable which is the middle of the pyramid, and of the pack, so to speak.
At this level, you could be living like this and happy. You don’t really need much else. If you happen to get more money, great – you can choose to invest all of it, or spend it all – you are at the point where you do not really need extra money, if you get what I mean.
But someone living at Bare Bones, even Breathing levels, is still struggling hard with small, daily money choices that impact them greatly. They are wondering if they have enough to cover their bus pass AND buy ingredients to make a birthday cake. This is the kind of level where money matters 100% and no one can ever dissuade me otherwise.
So once you’re at the Comfortable level, and above, heck YEAH more money is great. You are able to now max out accounts, or better, max out everything you can think of, AND still spend like a happy mofo.
More money beyond Comfortable, is not necessary, but it is surely welcome as you now have so much extra wiggle room you can cut back on your fun spending and cover major expenses without much stress. I mean…. it’s a dream.
Money does buy happiness because it buys options. You have choices now, you have options to decide to quit your job, maybe you buy a house that is more expensive but closer to your family. Your options are endless with more money to throw at stresses and issues that come your way – you can well afford to not have to deal with it.
If you were unhappy before, more money changes nothing
Where I think it should be said and no one disagrees, is if you were a miserable fk before, you will be a miserable fk after, even if you are richer. You are just a richer miserable fk.
More money just enhances who you are. It changes nothing about truly making you EMOTIONALLY happier, although maybe now you can pay for excellent therapy to work your issues out.People who have money trauma before, will continue to carry it with them no matter how much they amass. They could have hundreds of millions and still decide they want to swipe ketchup packets from a fast food store. Or refuse to pay for better food because they think it’s a scam. Or they’re trying to prove something to themselves by living frugally or even cheaply because they think it is better, more virtuous as a way of life to not live defined by their possessions and items.
So yes, you have ultra-rich people being snobs at their money level and deciding to stay cheap and act cheap because they think it’s holier to do so, and they feel morally superior when they do. Money changes nothing. They need to work on their own issues.
For me personally, I acknowledge that I very much enjoy luxury within reason. I prefer secondhand luxury because I balk at the price tags if I were to buy retail but also, the world doesn’t need more STUFF. The world does not need to keep producing and if I opt into this secondhand cycle instead, I feel better about myself and what I am doing. Less guilt, anyway.
At the core of it, wanting nicer things, upgrading a car or a home, eating fancier foods, or whatever, is a human instinct. Throughout time, you can see that humans have been creating adornments, even primitive jewellery that serves ZERO purpose and functionality except to look beautiful and make them feel good.
The Romans used to use purple as a colour to distinguish status in society because of the costliness of killing all of those snails to create that deep purple dye. People bought fresh pineapples at one time, to simply display it on a shelf for company until it rotted away just to show how rich they were. We have countless of examples of this, but the trick is simply to not get caught up in it to the point where it puts you into debt, or makes you get into a position where it harms you emotionally, mentally, and financially.
But if you reach that Maxed or $ level, none of this really makes a difference because you have so much money that you are literally someone who can buy a pineapple and let it rot to show your status. Or buy expensive pieces of art just because it makes you smile to see that sculpture in your home. Maybe you would even switch to the organic locally-fed meat because paying $35 for a single steak no longer fazes you if it tastes marginally better than the grocery store stuff, and you feel better about your carbon footprint in doing so.
The point is simple:
More money does make you happy but it doesn’t change who you are inside, it only enhances it for better or for worse.