Does Money Buy You Happiness?

According to Financial Samurai‘s thesis, if you say money doesn’t buy happiness then you’re either poor or super-rich, and since I don’t have a super-yacht I guess that leaves poor.

I guess Sam hasn’t heard of necessary and sufficient conditionality. In general not having enough money results in some form of misery. Micawber was right there.

“Annual income twenty pounds, annual expenditure nineteen pounds nineteen shillings and six pence, result happiness. Annual income twenty pounds, annual expenditure twenty pounds and six pence, result misery.”

And having more money does buy you many of the things people say it doesn’t. It often buys health, since it enables you to eat right and avoid living in polluted places. And yet, as one gets older, money does lose some of its lustre. Part of that is simply that one’s net worth usually increases over time – for instance I own my house outright, so I don’t need to service a mortgage. I don’t need to push myself to earn the money to buy a house; I’ve done that.

And yet, as I consider retiring early, I am weighing this up, and for me greater happiness would be achieved in being able to stop doing certain things and get unwelcome influences out of my life – and these are nearly all to do with earning money. I want more of my time back – each day that passes is a day I won’t live again, and each of those spent in an office is in some ways a day wasted.

So on balance, for me, I’d have to disagree with Sam. Obviously for him this isn’t true, but I would say that money only buys me happiness up to a point, if I have to work for it. After that, the opportunities I have to pass up to get more money actually cost me happiness. Getting the balance right is what I want to nail these days.