Saturday, November 12, 2011 / by Nathan Clark
Can Money Buy Happiness?
The traditional answer is “no.” We’ve all probably heard that a million times. The more money you have, the more problems you have, people say. There are things money can’t buy, we’re always told.
But there is some truth to the argument that money CAN buy happiness. And maybe, we’re seeing more and more of it.
Recent marketing studies and sales figures have shown that sales of higher-priced, “luxury” and brand-name products are doing well – far better than middle-of-the-road brands. Companies are shifting their marketing focus, in fact, to low-priced and high-priced products – de-emphasizing the middle-class “value” shopper and going after those who want to pamper themselves a bit.
Some of this phenomenon can probably be attributed to pent-up demand. The recession in the U.S. has been followed by a rather slow recovery, and people have had a mindset of self-control and frugality for some time now. Eventually, that self-control is going to crack, and people will have impulse buys.
That, however, is not the sort of spending that buys happiness. It’s evidence, maybe, that people are using money to pursue happiness, but my guess is that buying that expensive handbag or set of new golf clubs isn’t going to bring lasting happiness.
An email newsletter I subscribe to recently had an article about buying happiness. Actually it was about buying things that bring happiness. Happiness that’s truer than that new designer pair of shoes or foreign sports car.
Instead, the article focused on people who have spent money to buy freedom. Or spent money to buy more time at home, or traveling or doing a hobby. Instead of buying THINGS that they perceive will make them happy, they have bought experiences, time and memories. Those things make them happy a lot longer than “toys” will.
As an example, could you invest money into a “side” business that can earn you extra income so that you could afford to work your current job part-time, or maybe even quit it altogether? Could you save money over a year or two so that instead of going away for a long weekend here or there, you can splurge on one big vacation adventure for your family? Would buying your dream home, which you could enjoy for years and years, bring you lasting happiness?
Spending money that way is more an investment in worthwhile experiences than it is an outright attempt to buy happiness – and it’s bound to be much more successful.
And I know I’ve written before about living below your means, saving money and investing wisely – I am still a firm believer in those things. But if spending money in ways that help you enjoy life without hurting you in the long run, then it’s more investing in happiness than it is irresponsible spending.
Should you get that $4 latte every day if you’re struggling under a mountain of credit card debt? No. But if you can pay all your bills, put food on the table, have no debt and an emergency fund and can earn only a half-a-percent of interest on that cash in the bank, then have the latte if it makes you happy.
For as long as I can remember, there have always been articles titled something like “What to do with $1,000 right now.” They are published quite frequently, and, depending on the economy, vary a little but not a lot. A couple of years ago, such an article might have said “Put it in the bank, your job is not safe.” Or, “Invest in gold.”
Nowadays, these articles have changed their tune a bit. One I recently read used the logic that with cash earning so little these days, people might be better off spending it rather than sitting on it. One recommendation was to purchase a certain type of computer. Another bit of advice was to buy a treadmill. One recommendation was to buy a new mattress, and yet another was to give yourself a makeover.
Sure, there were some standard bits of investing advice – energy and health care stocks, for example – but the items on the list were much more self-indulgent than others. Actually, they were centered more around having a happier, more comfortable life than they were about earning money with that money.
And the more I thought about it, the more it makes sense. Maybe a new laptop will make your life easier and your data more secure. Maybe the good night’s sleep a new mattress provides or the better health a treadmill can bring are worth whipping the wallet out for.
Hopefully, you can see the difference between these types of purchases and buying “toys” and baubles with your hard-earned cash. Money can’t buy happiness, but it can buy things that that improve your quality of life.
And that’s the path to happiness.
But there is some truth to the argument that money CAN buy happiness. And maybe, we’re seeing more and more of it.
Recent marketing studies and sales figures have shown that sales of higher-priced, “luxury” and brand-name products are doing well – far better than middle-of-the-road brands. Companies are shifting their marketing focus, in fact, to low-priced and high-priced products – de-emphasizing the middle-class “value” shopper and going after those who want to pamper themselves a bit.
Some of this phenomenon can probably be attributed to pent-up demand. The recession in the U.S. has been followed by a rather slow recovery, and people have had a mindset of self-control and frugality for some time now. Eventually, that self-control is going to crack, and people will have impulse buys.
That, however, is not the sort of spending that buys happiness. It’s evidence, maybe, that people are using money to pursue happiness, but my guess is that buying that expensive handbag or set of new golf clubs isn’t going to bring lasting happiness.
An email newsletter I subscribe to recently had an article about buying happiness. Actually it was about buying things that bring happiness. Happiness that’s truer than that new designer pair of shoes or foreign sports car.
Instead, the article focused on people who have spent money to buy freedom. Or spent money to buy more time at home, or traveling or doing a hobby. Instead of buying THINGS that they perceive will make them happy, they have bought experiences, time and memories. Those things make them happy a lot longer than “toys” will.
As an example, could you invest money into a “side” business that can earn you extra income so that you could afford to work your current job part-time, or maybe even quit it altogether? Could you save money over a year or two so that instead of going away for a long weekend here or there, you can splurge on one big vacation adventure for your family? Would buying your dream home, which you could enjoy for years and years, bring you lasting happiness?
Spending money that way is more an investment in worthwhile experiences than it is an outright attempt to buy happiness – and it’s bound to be much more successful.
And I know I’ve written before about living below your means, saving money and investing wisely – I am still a firm believer in those things. But if spending money in ways that help you enjoy life without hurting you in the long run, then it’s more investing in happiness than it is irresponsible spending.
Should you get that $4 latte every day if you’re struggling under a mountain of credit card debt? No. But if you can pay all your bills, put food on the table, have no debt and an emergency fund and can earn only a half-a-percent of interest on that cash in the bank, then have the latte if it makes you happy.
For as long as I can remember, there have always been articles titled something like “What to do with $1,000 right now.” They are published quite frequently, and, depending on the economy, vary a little but not a lot. A couple of years ago, such an article might have said “Put it in the bank, your job is not safe.” Or, “Invest in gold.”
Nowadays, these articles have changed their tune a bit. One I recently read used the logic that with cash earning so little these days, people might be better off spending it rather than sitting on it. One recommendation was to purchase a certain type of computer. Another bit of advice was to buy a treadmill. One recommendation was to buy a new mattress, and yet another was to give yourself a makeover.
Sure, there were some standard bits of investing advice – energy and health care stocks, for example – but the items on the list were much more self-indulgent than others. Actually, they were centered more around having a happier, more comfortable life than they were about earning money with that money.
And the more I thought about it, the more it makes sense. Maybe a new laptop will make your life easier and your data more secure. Maybe the good night’s sleep a new mattress provides or the better health a treadmill can bring are worth whipping the wallet out for.
Hopefully, you can see the difference between these types of purchases and buying “toys” and baubles with your hard-earned cash. Money can’t buy happiness, but it can buy things that that improve your quality of life.
And that’s the path to happiness.
