Over at MIT, there’s an interesting paper that asks the question: Does money really buy happiness. Apparently although the super-rich can be happier than the poor, the general level of happiness doesn’t appear to improve as money increases.
In effect, I wish to propose two different answers to the question “Does money buy happiness?†Considerable evidence suggests that if we use an increase in our incomes, as many of us do, simply to buy bigger houses and more expensive cars, then we do not end up any happier than before. But if we use an increase in our incomes to buy more of certain inconspicuous goods–such as freedom from a long commute or a stressful job–then the evidence paints a very different picture.
You know something? This guys right.
Over the last 8 years or so, my salary has shot up through the roof in real terms. This is partly due to consistent economic growth over that period, but mainly due to my increase in a specialised skill-set combined with rapid growth in its market (Information Security). Despite this, my consumer debt levels went up with my salary, and I now find myself in a house with a mortgage, a 2-3 hour commute each way to work and a variety of geek toys to play with. I’d say I’m reasonably happy, although the working hours are slowly killing me 
.
The happiest periods I’ve experienced have been when I’ve spent long periods of time off work with enough money in the bank to live, but not that extravagantly. I love spending time at the family summer home in Marmara, Turkey. So I ask myself: Why am I here? Will this PSP, that iPod, a Mac Mini truly make me happy? If it doesn’t make me happy, will it make anyone else happy?
The psychology of purchasing is actually quite complex once you take the lid off. On the one hand, there’s the excitement of a new acquisition. Some people actually mistake this for happiness, which is where ultimately you end up buying loads of tat. We’ve all done it, I know I have.
About 6 months ago, I decided that as an experiment in trying to increase my happiness levels, I’d cut the IT toys budget right back (Ok, that was the wife’s decision, not mine), I’d not buy products just on impulse and for each purchase I’d have to justify a real-world benefit prior to buying it. This seemed to work. I certainly saved money, and acquired less garbage. I wasn’t much happier though than I was before.
It was only after reading the article ‘How not to buy happiness‘ that I realised that I’d only solved half of the problem.
So how is money linked to happiness? I suspect (but can’t confirm) that money is linked to unhappiness. For me, a lack of financial freedom makes me unhappy, or at least blocks me from being happy. I’m still in the process of sorting my finances out, although at the moment I think I’m reasonably well off compared to 6 months ago. I do believe that once I’ve got rid of every debt (mortgage included) then that factor will completely disappear, although I’ll settle for straightforward financial freedom.
An easy way to do this I’ve found is to cut advertising out of your life. Stop reading the news. Seriously, the world will carry on without you (on its own, this stops me from getting disheartened by crooked politicians and corrupt and evil companies). Advertising, especially TV-based advertising uses complex psychological voodoo to make you feel worse about yourself in order to present a ’solution’ to your (often ficticious) problem. Do you recognize any of these?
- Cool people use our poorly made and overpriced MP3/CD/DVD/Game player. Buy our product, you will feel cool using it. If you don’t have one, you’re not cool.
- You’re getting old and wrinkly. Our cream makes you younger looking, which will make you feel better about yourself.
- The financial debt is getting too much, one quick phone call to us will make it go away for one regular large portion of your salary being taken away from you for the rest of your natural life. Of course, you lack the financial discipline to avoid debt so you’ll be calling us back in 6 months as that false feeling of financial freedom causes you to spend like mad.
- If you go on holiday to our resort packed with fat, depressed, unhappy families with screaming kids, everyone including you will look beautiful, have a great time, and all your family dysfunctions will disappear
- Our hair product induces multiple-orgasms on demand, yet remains legal despite being more powerful than crack cocaine
The next way to solve the problem is to find stuff that makes you happy. I know that I’m happiest elsewhere, so I plan to go there. Taking large volumes of Tin to the mediterranean seafront doesn’t go down too well, so I’m going to have to make some purchases in order to work but the overall plan is to spend a month there to see if I’m any happier overall. When I do this, you’ll know because you won’t hear from me for at least a month. If I’m really happy, you’ll never hear from me again
Ask yourself, truly, deeply, what would make you happy?
Who was it who said money doesn’t buy you happiness but it does let you park your yacht next to it.