To What Degree Does Money Buy Happiness?

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RJC
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To What Degree Does Money Buy Happiness?

Post by RJC » Thu Feb 07, 2019 9:28 pm

Hi folks,

Found this on the Humble Dollar (Jonathan Clements) blog after listening to the 3rd Bogleheads podcast:

=====

HOW CAN WE STEP off the hedonic treadmill—and squeeze more satisfaction out of our time and money? Here are some insights from the academic literature:

1. Spend time with friends and family. Throw a party. Go out to dinner with friends. Fly across the country to see your children or grandchildren. Happiness research suggests a robust network of friends and family can be a huge source of happiness.

2. Devote yourself to work and hobbies that you find challenging, you’re passionate about, you think are important and you feel you’re good at. While achieving our goals often isn’t as satisfying as we imagine, making progress toward these goals can give us great satisfaction. Think about those moments when you’re engaged in activities you love, you’re completely absorbed and time just whizzes by. These moments of what psychologists call “flow” can be among our happiest times.

3. Buy experiences, not possessions. The new car will likely go from a source of happiness to a source of unhappiness as it gets dinged up and breaks down. By contrast, a vacation can provide not just a wonderful week or two with family, but also many months of eager anticipation and many years of fond memories.

4. Move closer to work. Research suggests a long commute can be terrible for happiness. We like to feel in control, and that’s tough to do when we’re dealing every day with traffic or public transportation.

5. Don’t move to a ritzier neighborhood than you can truly afford. Your wealthy neighbors will be a constant reminder that you aren’t so fortunate.

6. Plan far ahead. When we spend money, often the best part is the anticipation, as we imagine how great it’ll be to go on vacation or take delivery of the new car. Make sure you enjoy a long period of anticipation by avoiding impulse purchases—and instead pondering major purchases for at least a few months.

7. Pay before you consume. For instance, if you’re taking a trip, pay for the airfare and hotel rooms ahead of time. That way, you’ll free yourself to enjoy the vacation without worrying about the cost involved.

8. Don’t treat yourself too often. If you have a favorite restaurant, you will probably enjoy each visit more if you go less frequently.

9. Pay others to do chores you dislike, whether it’s mowing the lawn, making dinner or cleaning the house.

10. Give a little. Volunteering doesn’t just help others. It can also make us feel good about ourselves. Ditto for buying gifts.

11. Count your blessings. Okay, maybe the new car doesn’t give you the same thrill it once did. But you might be able to squeeze a little more happiness from the vehicle if you pause for a moment, admire it and think how lucky you are.

=====

To what degree does money buy happiness? What has your own personal experience been like?
Last edited by RJC on Thu Feb 07, 2019 10:52 pm, edited 1 time in total.

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bengal22
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Re: Does Money Buy Happiness?

Post by bengal22 » Thu Feb 07, 2019 9:31 pm

Money does NOT buy happiness but it definitely gives you more options in life.
"Earn All You Can; Give All You Can; Save All You Can." .... John Wesley

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RJC
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Re: Does Money Buy Happiness?

Post by RJC » Thu Feb 07, 2019 9:35 pm

bengal22 wrote:
Thu Feb 07, 2019 9:31 pm
Money does NOT buy happiness but it definitely gives you more options in life.
What if you are in poverty and always worry about how to pay the bills?

dh
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Re: Does Money Buy Happiness?

Post by dh » Thu Feb 07, 2019 9:37 pm

It is more of a multivariate equation ... Time, meeting/exceeding expectations, and having "enough" (whatever that means to you), etc. buys happiness. Money itself? Not so much.

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bengal22
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Re: Does Money Buy Happiness?

Post by bengal22 » Thu Feb 07, 2019 9:39 pm

RJC wrote:
Thu Feb 07, 2019 9:35 pm
bengal22 wrote:
Thu Feb 07, 2019 9:31 pm
Money does NOT buy happiness but it definitely gives you more options in life.
What if you are in poverty and always worry about how to pay the bills?
Question was does money buy you happiness. I stand by my answer. Maybe our definition of happiness is different.
"Earn All You Can; Give All You Can; Save All You Can." .... John Wesley

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Darth Xanadu
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Re: Does Money Buy Happiness?

Post by Darth Xanadu » Thu Feb 07, 2019 9:42 pm

I suppose that, in the sense money can buy experiences, in a way it can therefore buy happiness to some degree.
"A courageous teacher, failure is."

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Re: Does Money Buy Happiness?

Post by NibbanaBanana » Thu Feb 07, 2019 9:42 pm

Money does not buy happiness, but it can prevent a lot of suffering.

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bengal22
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Re: Does Money Buy Happiness?

Post by bengal22 » Thu Feb 07, 2019 9:46 pm

NibbanaBanana wrote:
Thu Feb 07, 2019 9:42 pm
Money does not buy happiness, but it can prevent a lot of suffering.
I do not believe money prevents suffering.
"Earn All You Can; Give All You Can; Save All You Can." .... John Wesley

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Re: Does Money Buy Happiness?

Post by Grt2bOutdoors » Thu Feb 07, 2019 9:48 pm

Money gives you choices. When you have no money, you don't have a choice.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

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munemaker
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Re: Does Money Buy Happiness?

Post by munemaker » Thu Feb 07, 2019 9:49 pm

bengal22 wrote:
Thu Feb 07, 2019 9:46 pm
NibbanaBanana wrote:
Thu Feb 07, 2019 9:42 pm
Money does not buy happiness, but it can prevent a lot of suffering.
I do not believe money prevents suffering.
Money gives you access to better and more timely medical care, so from that standpoint, doesn't it prevent suffering. And if you can't pay your bills, doesn't that create stress that affects your health? I think it money can prevent a lot of suffering.

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2pedals
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Re: Does Money Buy Happiness?

Post by 2pedals » Thu Feb 07, 2019 9:51 pm

Unhappy people have a lot of negative emotions. For many people much of the negative emotions do not go away with more money. This is my experience.

GCD
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Re: Does Money Buy Happiness?

Post by GCD » Thu Feb 07, 2019 9:52 pm

Money won't buy happiness, but poverty sucks.

In before the lock...

alter
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Re: Does Money Buy Happiness?

Post by alter » Thu Feb 07, 2019 9:58 pm

Money can't tell you what to think.

But going on an exotic vacation usually makes me smile.

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RJC
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Re: Does Money Buy Happiness?

Post by RJC » Thu Feb 07, 2019 10:03 pm

munemaker wrote:
Thu Feb 07, 2019 9:49 pm
bengal22 wrote:
Thu Feb 07, 2019 9:46 pm
NibbanaBanana wrote:
Thu Feb 07, 2019 9:42 pm
Money does not buy happiness, but it can prevent a lot of suffering.
I do not believe money prevents suffering.
Money gives you access to better and more timely medical care, so from that standpoint, doesn't it prevent suffering. And if you can't pay your bills, doesn't that create stress that affects your health? I think it money can prevent a lot of suffering.
+1. I think if basic needs are not met (food, security, health, etc.), it's hard to be happy.

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RJC
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Re: Does Money Buy Happiness?

Post by RJC » Thu Feb 07, 2019 10:04 pm

GCD wrote:
Thu Feb 07, 2019 9:52 pm
Money won't buy happiness, but poverty sucks.

In before the lock...
Do these types of posts get locked? I'm fairly new to this board.

J295
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Re: Does Money Buy Happiness?

Post by J295 » Thu Feb 07, 2019 10:06 pm

I'm not looking to buy or possess "happiness."

pdavi21
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Re: Does Money Buy Happiness?

Post by pdavi21 » Thu Feb 07, 2019 10:07 pm

Money buys your freedom...unless you want to work a desk job for 40 years...
"We spend a great deal of time studying history, which, let's face it, is mostly the history of stupidity." -Stephen Hawking

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Re: Does Money Buy Happiness?

Post by Grt2bOutdoors » Thu Feb 07, 2019 10:09 pm

RJC wrote:
Thu Feb 07, 2019 10:04 pm
GCD wrote:
Thu Feb 07, 2019 9:52 pm
Money won't buy happiness, but poverty sucks.

In before the lock...
Do these types of posts get locked? I'm fairly new to this board.
Click the rules link. Read the forum rules, which generally state that topics need to be actionable and personal to the poster. So you're asking a general question, but how is that applicable to you and how is it actionable? You can amend your topic posting with additional information, or you may find the post to be locked by an administrator for reasons that they will disclose in red.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

GCD
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Re: Does Money Buy Happiness?

Post by GCD » Thu Feb 07, 2019 10:09 pm

RJC wrote:
Thu Feb 07, 2019 10:04 pm
GCD wrote:
Thu Feb 07, 2019 9:52 pm
Money won't buy happiness, but poverty sucks.

In before the lock...
Do these types of posts get locked? I'm fairly new to this board.
It's not really "actionable." You could try to rephrase your title in some way, but I doubt you could fix this. It's a vague question without a real answer. You could debate it forever and not really get anywhere.

But I'm not a mod so we'll see what happens.

randomguy
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Re: Does Money Buy Happiness?

Post by randomguy » Thu Feb 07, 2019 10:11 pm

The blog post sure thinks money buys happiness lets go down the list

1) Throw a party -> Money
Travel across the country -> money

2) Hobbies -> MOney
3) Buy experiences -> money
4) move closer to work -> money
9) Pay others to do chores -> money

Thats a lot of spending. And we are off in luxury good land and not even talking about the happiness of being able to buy food and shelter.

Money buys happiness and it isn't even really debatable. The amount of incremental happiness (the happiness difference between taking the bus for 2 hour versus driving for 20 mins is huge. Driving 20 mins in a E class versus an accord is a pretty small) and where to spend the money is harder to say. I enjoy my vacations but I don't think about them. I enjoy the fact that my car is quiet everytime I drive.

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Raybo
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Re: Does Money Buy Happiness?

Post by Raybo » Thu Feb 07, 2019 10:12 pm

It depends on what someone has to do to get the money in the first place.
No matter how long the hill, if you keep pedaling you'll eventually get up to the top.

lukestuckenhymer
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Re: Does Money Buy Happiness?

Post by lukestuckenhymer » Thu Feb 07, 2019 10:14 pm

Money buys a comfortable life and enjoyable experiences, but happiness? Not really.

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oldzey
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Re: Does Money Buy Happiness?

Post by oldzey » Thu Feb 07, 2019 10:15 pm

John, Paul, George, and Ringo certainly had their opinion...

Money (That's What I Want)
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WildBill
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Re: Does Money Buy Happiness?

Post by WildBill » Thu Feb 07, 2019 10:18 pm

Howdy

I have never been in any situation where having money made me unhappier.

W B
"Through chances various, through all vicissitudes, we make our way." Virgil, The Aeneid

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bengal22
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Re: Does Money Buy Happiness?

Post by bengal22 » Thu Feb 07, 2019 10:25 pm

IMO happiness comes from family, friends, faith, self worth, having a purpose. None of these things require money. I can enjoy a quiet ride in a nice car but sharing it with someone special is what makes me happy.
"Earn All You Can; Give All You Can; Save All You Can." .... John Wesley

lostdog
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Re: Does Money Buy Happiness?

Post by lostdog » Thu Feb 07, 2019 10:26 pm

pdavi21 wrote:
Thu Feb 07, 2019 10:07 pm
Money buys your freedom...unless you want to work a desk job for 40 years...
+1
I don't invest looking in the rear view mirror and I know absolutely nothing about the future.

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Sandtrap
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Re: Does Money Buy Happiness?

Post by Sandtrap » Thu Feb 07, 2019 10:27 pm

Here is an "actionable response":

What money, finance, assets, income stream, etc, especially in "substantial amounts" can do:

(and why we all strive to learn, save, invest, hopefully with sound "Bogle Principles".)

1. Benevolence == you are now in a position to help others either through funds or services or otherwise.

2. Security == you and your family are now in a secure and stable financial position to enable #1.

3. Safety == you have put yourself in a sound position via "Bogle financial principles" to enable #1, #2

4. Flexibility == you now can hopefully weather the personal and financial "black swans" that are inevitable in life, and thus, enable #1-3.

5. Personal Growth (self explanatory)

Happiness is the end result of #1-5

dcop
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Re: Does Money Buy Happiness?

Post by dcop » Thu Feb 07, 2019 10:32 pm

After my divorce in 1999 I started to build my wealth and hit 1M net worth in 2013, a huge goal that made me ecstatic by achieving. I took many vacations to Mexico during this time and in 2018 I retired and moved to Mexico. All this made me very happy as does the freedom to to not worry about bills and to spend without worry. Obviously there are limits to what I will spend but I'm extremely comfortable with my limits.

I basically look at it like this: I put health and money on the same #1 importance level - a tie. If I were to have health issues but had my wealth it would probably make me unhappy. If I was poor and in good health I probably wouldn't be nearly as happy as I am now, if at all. We all have a death sentence by nature it's just a matter of when, so I am much happier to have money and to let all the other cards fall where they may.

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Re: Does Money Buy Happiness?

Post by mighty72 » Thu Feb 07, 2019 10:44 pm

It is a balance. Little money prevents you from doing a lot of things that the blogger mentions. As an example,
8. Don’t treat yourself too often. If you have a favorite restaurant, you will probably enjoy each visit more if you go less frequently..
Key words are too often. If you don't have money to pay for the basic necessities, you probably never treat yourself or treat looks like a basic meal.
I am sure at some point you hit the law of diminishing returns and the next dollar doesn't is not worth as much as the first one

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RJC
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Re: Does Money Buy Happiness?

Post by RJC » Thu Feb 07, 2019 10:47 pm

Sandtrap wrote:
Thu Feb 07, 2019 10:27 pm
Here is an "actionable response":

What money, finance, assets, income stream, etc, especially in "substantial amounts" can do:

(and why we all strive to learn, save, invest, hopefully with sound "Bogle Principles".)

1. Benevolence == you are now in a position to help others either through funds or services or otherwise.

2. Security == you and your family are now in a secure and stable financial position to enable #1.

3. Safety == you have put yourself in a sound position via "Bogle financial principles" to enable #1, #2

4. Flexibility == you now can hopefully weather the personal and financial "black swans" that are inevitable in life, and thus, enable #1-3.

5. Personal Growth (self explanatory)

Happiness is the end result of #1-5
Thank you Sandtrap. :sharebeer

EnjoyIt
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Re: Does Money Buy Happiness?

Post by EnjoyIt » Thu Feb 07, 2019 10:53 pm

What I notice is that those people who try really hard to buy happiness tend to fail at it. I see them spending more and more in that pursuit and nothing really changes. Some become less happy in this process.

Therefore, I think once the basic necessities are met more money doesn’t buy happiness but it offers options that can add to one’s happiness if utilized well. For example, spending on a vacation with family and/or friends will add to one’s happiness. But, adding more and more money to that same vacation provides very little extra and at some point provides no additional value.

andrew99999
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Re: Does Money Buy Happiness?

Post by andrew99999 » Thu Feb 07, 2019 10:54 pm

RJC wrote:
Thu Feb 07, 2019 10:03 pm
munemaker wrote:
Thu Feb 07, 2019 9:49 pm
bengal22 wrote:
Thu Feb 07, 2019 9:46 pm
NibbanaBanana wrote:
Thu Feb 07, 2019 9:42 pm
Money does not buy happiness, but it can prevent a lot of suffering.
I do not believe money prevents suffering.
Money gives you access to better and more timely medical care, so from that standpoint, doesn't it prevent suffering. And if you can't pay your bills, doesn't that create stress that affects your health? I think it money can prevent a lot of suffering.
+1. I think if basic needs are not met (food, security, health, etc.), it's hard to be happy.
+2. Sure you can define happiness as separate to avoiding suffering, but I have never been happier than when I was suffering and the suffering ended.

You suffer when you don't have enough food or clothes, when you are unemployed, if you can't pay rent, and can't keep your family safe from those things.
You suffer when you have a job where you are disrespected and are too old to find new employment and need to live in this situation for years and years making you depressed and want to just kill yourself.
The comment that money doesn't prevent suffering seems quite ridiculous to me.

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Nate79
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Re: To What Degree Does Money Buy Happiness?

Post by Nate79 » Thu Feb 07, 2019 10:56 pm

Yes, I think it does. Sure beats being extremely poor and destitute.

UpperNwGuy
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Re: To What Degree Does Money Buy Happiness?

Post by UpperNwGuy » Thu Feb 07, 2019 11:03 pm

If you travel in third world countries and leave the well-trodden tourist pathways, you will quickly discover that (a) people know how to find happiness without money, but (b) they are in desperate need of money for basic necessities of life such as housing, food, healthcare, education, etc.

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Re: To What Degree Does Money Buy Happiness?

Post by S&L1940 » Thu Feb 07, 2019 11:04 pm

getting up in the morning and knowing the bills are and can be paid, that gets me in the mood to face the day's challenges in a happier frame of mind
In fact simply getting up in the morning also puts me in the mood to keep going
Don't it always seem to go * That you don't know what you've got * Till it's gone

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Re: To What Degree Does Money Buy Happiness?

Post by aspirit » Thu Feb 07, 2019 11:07 pm

Hmmmm......a new alternative bio-medical treatment shows strengths you’d like to participate in, but because of many applicants only phically qualified ones w/a history and financially able individuals are able to have a chance, or even be considered.

Theses questions and there like amuse me.
:?
Time & tides wait for no one. A man has to know his limitations. | "Give me control of a nation's money and I care not who makes it's laws" | — Mayer Amschel Bauer Rothschild ~

randomguy
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Re: Does Money Buy Happiness?

Post by randomguy » Thu Feb 07, 2019 11:08 pm

EnjoyIt wrote:
Thu Feb 07, 2019 10:53 pm
What I notice is that those people who try really hard to buy happiness tend to fail at it. I see them spending more and more in that pursuit and nothing really changes. Some become less happy in this process.

Therefore, I think once the basic necessities are met more money doesn’t buy happiness but it offers options that can add to one’s happiness if utilized well. For example, spending on a vacation with family and/or friends will add to one’s happiness. But, adding more and more money to that same vacation provides very little extra and at some point provides no additional value.
Depends what you are paying for. Paying 4x and having a hotel on the beach instead of a 20 min walk away makes for a much nicer vacation. Being willing to pay the 30 euros (probably dating myself) for a gondola ride in Venice adds to the experience. Heck it seems like half this board feels like paying 4x for a better seat on the plane is worth it:). Where that line is up to you and figuring out where spending the money makes you happy is up t you. I realized early on trinkets bought on vacations did nothing for me. I have friends who bought the same stuff but they display it and they say it makes them feel happy every time they look at it.

You can squander money on things that don't buy happiness. You can also spend it on things that do. You can't write 100k check and have a happy life (well I am told there are some really good drugs:)) . But you can spend 100k over time to build a life that makes you happy.

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cheese_breath
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Re: To What Degree Does Money Buy Happiness?

Post by cheese_breath » Thu Feb 07, 2019 11:35 pm

Every so often you read about another multi-millionaire celebrity committing suicide. Guess they just didn't have enough money to buy happiness, even though it seems a lot of them seem tried.
The surest way to know the future is when it becomes the past.

yeahman
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Re: To What Degree Does Money Buy Happiness?

Post by yeahman » Thu Feb 07, 2019 11:40 pm

The trope, probably invented by an academic or cleric of modest means, is that money doesn't buy happiness. In more recent decades, it's been modified to "money doesn't buy happiness, but..." People point to anecdotes about celebrity suicides, which is as nonsensical as saying "If money buys health care, why did John D. Rockefeller die?" The social science tells us that money does buy happiness. All else being equal, you are happier with more money than less money. The only question is the coefficient. Anecdotally, it seems that relationships matter more than money. But those aren't completely independent variables. Relationships help with money. Bottom line is that to be happy you need to build relationships and have money.

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Will do good
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Re: Does Money Buy Happiness?

Post by Will do good » Thu Feb 07, 2019 11:49 pm

Deleted

David Althaus
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Re: To What Degree Does Money Buy Happiness?

Post by David Althaus » Thu Feb 07, 2019 11:58 pm

While money may not buy happiness it does buy flexibility. Not original but quote source escapes me.

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Re: To What Degree Does Money Buy Happiness?

Post by gwrvmd » Fri Feb 08, 2019 12:13 am

They say "Money Can't Buy Happiness" but it is way ahead of whatever is in second place........Gordon
Disciple of John Neff

EnjoyIt
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Re: Does Money Buy Happiness?

Post by EnjoyIt » Fri Feb 08, 2019 1:16 am

randomguy wrote:
Thu Feb 07, 2019 11:08 pm
EnjoyIt wrote:
Thu Feb 07, 2019 10:53 pm
What I notice is that those people who try really hard to buy happiness tend to fail at it. I see them spending more and more in that pursuit and nothing really changes. Some become less happy in this process.

Therefore, I think once the basic necessities are met more money doesn’t buy happiness but it offers options that can add to one’s happiness if utilized well. For example, spending on a vacation with family and/or friends will add to one’s happiness. But, adding more and more money to that same vacation provides very little extra and at some point provides no additional value.
Depends what you are paying for. Paying 4x and having a hotel on the beach instead of a 20 min walk away makes for a much nicer vacation. Being willing to pay the 30 euros (probably dating myself) for a gondola ride in Venice adds to the experience. Heck it seems like half this board feels like paying 4x for a better seat on the plane is worth it:). Where that line is up to you and figuring out where spending the money makes you happy is up t you. I realized early on trinkets bought on vacations did nothing for me. I have friends who bought the same stuff but they display it and they say it makes them feel happy every time they look at it.

You can squander money on things that don't buy happiness. You can also spend it on things that do. You can't write 100k check and have a happy life (well I am told there are some really good drugs:)) . But you can spend 100k over time to build a life that makes you happy.
What about 6x more to get that room slightly closer to the beach with every day room service? What about 8x and have breakfast freshly cooked in your room? What about 10x for a massage to start every day? What about 12x so that someone also makes dinner and drives you everywhere? What about 16x and they wipe you butt after every poop? Maybe 25x and why leave the room at all and have everything done for you? It’s getting silly huh?

I think some people believe they are spending money on happiness and fail miserably. Some even think they are getting serious happiness per dollar value. I think more people are deluding themselves then they care to admit. I think most people are chasing their happy purchase putting in unnecessary hours at work when all they needed to do was hang out with some friends.

Here is something interesting. Experiences are better remembered and remembered more fondly when one has some turmoil or tribulation to overcome. That experience is even better if overcome with people you care about.

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Re: To What Degree Does Money Buy Happiness?

Post by politely » Fri Feb 08, 2019 1:22 am

Studies have been done on this topic. According to a Purdue analysis (2018), "Globally, we find that satiation occurs at $95,000 for life evaluation and $60,000 to $75,000 for emotional well-being. However, there is substantial variation across world regions, with satiation occurring later in wealthier regions. We also find that in certain parts of the world, incomes beyond satiation are associated with lower life evaluations." And according to a Times article about a Princeton study (2010), happiness peaks around $75,000. "But no matter how much more than $75,000 people make, they don't report any greater degree of happiness." However, happiness decreases the further income drops below $75,000.

Personally, I don't put much credence into these studies. On the other hand, I agree that happiness is likely to be negatively impacted when you are constantly worried about life's necessities: food, shelter & clothing - particularly if kids are involved. That's got to be very difficult.

Thesaints
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Re: To What Degree Does Money Buy Happiness?

Post by Thesaints » Fri Feb 08, 2019 1:35 am

RJC wrote:
Thu Feb 07, 2019 9:28 pm
To what degree does money buy happiness?
To the extent you can find it for sale.

GCD
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Re: To What Degree Does Money Buy Happiness?

Post by GCD » Fri Feb 08, 2019 1:50 am

So yes, I agree experiences are more important than things. But some experiences come at a price. I can, and do, enjoy sitting on the front porch drinking coffee with my wife. However, we have been planning on buying a boat and doing the Great Loop once the kids are off to college. We're gonna need about $300K+ for the boat and whatever we end up spending on the year long trip. Without $$$, I wouldn't be able to afford the boat, couldn't retire young to do this while I'm healthy, etc. And I will be happier drinking coffee with my wife cruising on my boat than sitting on the front porch in my subdivision.

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Re: To What Degree Does Money Buy Happiness?

Post by Ari » Fri Feb 08, 2019 2:19 am

I tend to concurr with the oft-quoted line (with various attributions) "People who say money can't buy happiness just don't know where to shop". For example, people use their money to buy a big house in the suburbs, when research suggests that a bigger home doesn't make you happier, while a longer commute absolutely makes you unhappier.

It would be very odd if money couldn't increase your happiness. Money can do so many different things, so saying that would be concluding that there's very little we can do to increase our happiness. And I believe there is at least some science supporting this: https://greatist.com/happiness/time-rai ... study-says

However, a far greater proprtion is simply about attitude. Some people are happier than others, and no matter what happens, they have a higher baseline. I'm fortunate that way. There are also things like feeling gratitude that has been shown to increase happiness.

I heartily recommend the book "The Happiness Hypothesis" by Jonathan Haidt on the subject.
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The Wizard
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Location: Reading, MA

Re: To What Degree Does Money Buy Happiness?

Post by The Wizard » Fri Feb 08, 2019 4:02 am

This is a bit of a trick question.

I'm really glad that I have a few thousand dollars per month "extra" income in retirement beyond my basic stay-at-home expenses.
This allows me to travel frequently, eat out when desired, and so forth.

I don't think I buy a lot of "things", but I like my new vacuuming robot and I think I'll buy a few more WiFi-controlled light switches.

Anyhow, I'm pretty sure I'd find a way to stay at roughly the same level of happiness if my retirement income was $2000/month lower. My upcoming trip to New Zealand, for instance, isn't critical to my overall happiness.

But if my income and assets were WAY lower, such that I had trouble paying my property taxes and CC bills, I think I would be Unhappy.

So Happiness/Money is a threshold thing...
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FederalFIRE
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Re: To What Degree Does Money Buy Happiness?

Post by FederalFIRE » Fri Feb 08, 2019 5:25 am

politely wrote:
Fri Feb 08, 2019 1:22 am
And according to a Times article about a Princeton study (2010), happiness peaks around $75,000. "But no matter how much more than $75,000 people make, they don't report any greater degree of happiness." However, happiness decreases the further income drops below $75,000.
The guys that wrote that piece of work - Danny Kahneman and Angus Deaton - are both Nobel winners in economoics, Deaton explicitly for this research. Note this was 2010 dollars, so that $75,000 threshold would likely be higher now.

From the paper...
"The data for positive and blue affect provide an unexpectedly sharp answer to our original question. More money does not necessarily buy more happiness, but less money is associated with emotional pain. Perhaps $75,000 is a threshold beyond which further increases in income no longer improve individuals’ ability to do what matters most to their emotional well-being, such as spending time with people they like, avoiding pain and disease, and enjoying leisure"

The important point is that this is all based around "differences" in income, not "changes", that is, the relative impact of X amount of additional income. On the topic of changes...
"Changes of income in the high range certainly have emotional consequences. What the data suggest is that above a certain level of stable income, individuals’ emotional well-being is constrained by other factors in their temperament and life circumstances"

You can read their paper here: https://www.princeton.edu/~deaton/downl ... st2010.pdf

minimalistmarc
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Re: To What Degree Does Money Buy Happiness?

Post by minimalistmarc » Fri Feb 08, 2019 5:40 am

My money makes me happy. Spending it wouldn’t make me happy, but knowing I have enough to be free does.

I think when people mean is buying stuff won’t make you happy.

I’m an introvert and do not want an extensive network of friends, sounds exhausting.

I don’t like paying people to do menial tasks we can do ourselves because in general in costs a lot and the job is not done well enough. I hear friends and family moan about their cleaners all the time. Also, if you hire people you have the ongoing hassle of communicating/managing them, no thanks.

Expensive hotels suck. Too fake and pretentious for my liking.

I like spending time with my kids, going on bike rides, walking, being outdoors. I think it is sad that everybody on the planet doesn’t appreciate the free stuff.

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