‘Can having wealth make us happy?’
Let’s first establish what happiness is. There are two types:
(1) The short term happiness we get from pleasure (winning money, being charitable, being with friends, etc.). That’s when endorphins, the happy hormones, rush to our brain to make us feel good. Our happiness soars, and then after a while we come back to normal.
(2) It’s that ‘normal’ feeling which is the other type of happiness, that day-to-day pervasive feeling of wellbeing when nothing in particular is happening. It’s the happiness that might prompt us to sing in the shower, for example. It’s our default happiness. I call it our core happiness.
There are wealthy people who can have that first type of happiness, pleasure, whenever they want, but if they have a weak core happiness they will still find life unsatisfying. Whereas, someone who has access to few pleasures, but has a strong core happiness, will find pleasure in the little things of life.
Pleasure is important; life would be drab without it. But if we aim to have a happy life, we need to aim for core happiness.
What role does money play in core happiness?
Money is wonderful stuff. It can provide pleasures in the form of toys, back massages, theatre tickets, holidays and so on. It can alleviate unhappiness, by providing food and shelter, or getting a toothache fixed. It can help us flourish, by providing us with an education, musical instruments, an abseiling experience . . .
But those benefits rarely add to our core happiness. Let me explain in more detail by answering the following questions:
Q. ‘We need money to ensure we are warm, sheltered, and fed, and to get toothaches fixed. We’d be unhappy without money.’
Yes, we need our basic needs met. Money can fix toothaches and it can put a roof over our heads. Money can fix such problems. But that just means having money can prevent unhappiness. It doesn’t add to our core happiness.
Someone who is hungry doesn’t say ‘I’m hungry because I have no money’; they say, ‘I’m hungry because I have no food.’
When we have enough money to fix those problems we won’t become happier by having even more of it. To conclude that having it more of it will lead to core happiness is a mistake, and it can only invite dissatisfaction.
‘So, having money doesn’t add to our core happiness, but it can prevent unhappiness?’
Correct. Money doesn’t raise a person’s core happiness but it can prevent or alleviate unhappiness, which is important. When a person’s toothache is fixed they can return to their set point of core happiness, but having even more money will not raise their set point further. It won’t make the person happier.
Q. ‘Mark, if you lost your house and everything in it, and from then on had only your basic needs met, wouldn’t you be less happy?’
Probably, like I would be if a crocodile were to bite my leg off. But I would eventually return to my core happiness and be as happy as I was before.
Q. ‘ If money doesn’t bring happiness, why do you work, Mark?’
To not go hungry. To have toothaches fixed. To afford life’s pleasures. To get satisfaction from the job itself. Don’t assume happy people have no aspirations. Happy people aren’t like cows content to graze: we enjoy doing, we enjoy achieving.
Q. ‘I love my retail therapy, and having money helps with that. Therefore, money can make me happy.’
Some people who enjoy shopping confuse the first kind of happiness (pleasure) with the core kind, and are afraid that if they stop spending money they will become unhappy. The enjoyment they receive from spending their money, though temporary, reinforces their belief that happiness requires money. That twisted concept of money begins to rule their lives.
Some shoppers buy goods and don’t even open the boxes. They waste money, grossly disrespecting the wonderful stuff. Each time they spend they get a little ‘hit’ of happiness, but ultimately that hit is brief and unfulfilling. They want a computer with more pixels, or a better phone. There is always something. And when they do need money for something important, like a toothache, they don’t have it. So they blame their lack of money for their unhappiness, which further cements their belief that money brings happiness.
Anyone who enjoys retail therapy could try focusing on developing resilience and connectedness. When they develop the feeling that whatever happens, they’ll handle it, and the feeling that they are connected with the rest of us, they might well find their need to purchase items fading away.
Q. ‘I’ve heard that if we do buy things it’s best to buy experiences rather than objects. Is that true?’
Yep. A good experience beats an acquisition any day. Play games. Join clubs. Do things you haven’t done before. Experiences tend to stay with you, and add to ‘Life’s tapestry’. They also strengthen the bonds between you and your companions.
Or, spend money on activities which will extend your boundaries and help you grow as a person. Things like music lessons, abseiling, education.
And by extending your boundaries you might gain confidence in yourself, and gain that feeling that whatever happens, you’ll handle it.
‘There you go: abseiling costs money. That means money does bring happiness.’
It’s the experience of abseiling which contributes to your core happiness, not the money that paid for it. Not the car which drove you there. Not the equipment.
Money is wonderful stuff, but it’s just a means. By itself it does not, and cannot, contribute to your core happiness. There are plenty of opportunities to grow as a person without the need for money. They’re waiting for you to grasp them. Look around for them.
‘The trouble with experiences is that you have nothing to show for it later except photographs. Buy something and you get to keep it.’
Getting to keep it doesn’t mean your happiness with it will be sustained. Possessions become part of the background.
Do you need to buy a gift for someone? Buy an experience: tickets to a fun park, a go-kart race, a back massage, a horse riding lesson, a badminton game, concert tickets . . .
Q. ‘Money allows us to live in comfort, and perhaps even luxury. Surely we need a decent standard of living to be happy?’
If our core happiness depended on our standard of living we would be far happier than the people who lived centuries ago. Those people had no access to the vast array of pleasures and comforts that we have today. But there is no evidence to suggest that they were any less happy.
Someone living in a luxurious house will be no happier than someone living in a hut, provided their basic needs are met. We are good at adapting to an environment. Someone living in a palace will, after a while, find the experience nothing out of the ordinary. It’s called habituation. In fact, people living luxurious lives are disadvantaged, because when they are forced to endure ordinary circumstances (such as an economy seat on a plane) they are particularly inconvenienced.
Habituation is one reason why some people buy a new car every two years. The thrill of a new car wears off and the owner feels empty. So, to feel good again they buy another new car. But who is the more satisfied: Jill, who feels the need to keep updating her car every two years, or Bill, who contentedly drives the same car for decades? I suggest that it’s Bill who is the more content. He is so satisfied with his driving experience he has no inclination to improve it, whereas Jill keeps becoming dissatisfied with her driving experience.
It’s the emotional health of a person which determines a person’s core happiness, not their living environment. If luxury really did contribute to a person’s core happiness, then a peasant living in a hut in the cold Mongolian hills would be less happy than someone living in a Sydney mansion. There is no evidence to suggest that’s the case.
Nor am I convinced that we are happier than our grandparents, who grew up with rudimentary medicine and no electrical appliances. Were they to live in similar conditions today we would consider them paupers. But were they less happy? No. Nor were people living in huts centuries back.
‘Surely someone in a plush house must be happier than a guy in a chook shed?’
If so, it’s because the guy living in a chook shed has poorer emotional health.
‘Are you suggesting that an emotionally healthy person living in a chook shed would be happier than an emotionally poor person living in a mansion?’
I am. And with equal emotional health they’ll be equally happy.
‘If having luxury doesn’t make us happy, why do so many of us work so hard to acquire luxury?’
Luxury isn’t the motivation to be rich; it’s just a perk. The rich work hard for other reasons.
In short, we all enjoy comfort and luxury, but they do not contribute to our core happiness. And remember what Kahil Gibran said of our lust for comfort: ‘. . . that stealthy thing that enters the house a guest, and then becomes a host, and then a master.’
‘Wealth consists not in having great possessions, but in having few wants.’
3rd century BC philosopher, Epicurus.
‘Happiness is wanting what you have, not having what you want.’
‘We get used to owning the new lounge suite and it becomes part of the furniture, so to speak. So we need continuous material purchases to maintain the same level of satisfaction.’
Ross Gittins, journalist.
Q. ‘I have heard that we eat and live better than have all the past kings of England. Is that true?’
Sure. You can thank refrigeration, multiculturalism, trade agreements and sophisticated transport systems for that. Also, those kings had to live in cold castles, their travelling options were limited, and heaven help them if they became ill or injured. But still, I would not conclude that because we live better than the kings and peasants of yesteryear that we are therefore happier than they were.
Q. ‘Money provides me with financial security, and that feeling of safety contributes to my core happiness.’
‘True financial security is knowing that you could handle having no money.’
An anonymous quote from Susan Jeffers’ book, ‘Feel the Fear and Do it Anyway’.
When some people lose money it feels like they’re being diminished. They’re frightened that if the amount of money they have drops below a certain threshold their life will begin to fall apart. So, they try hard to keep above that threshold, and the further above the threshold they are, the safer they feel. Yet they still feel vulnerable. They worry about how secure their investments are, or how much they would lose in a divorce, or whether or not they’ll be sued. So they raise the threshold even further. The bars on their windows, the jagged glass along their fences, and the cameras at the doorbell, are metaphors for the way they view the world. They lack security. Some people have lost so much money that they have had only a few million dollars left, and have killed themselves in fear of becoming poor.
It’s not just wealthy people. There are people with no money who cannot handle being poor. Their life falls apart. They can end up robbing a bank.
Financial security does not depend on how much money you have, or on how little. It depends on whether or not you feel you could handle having no money. As the rest of the book explains, a big chunk of core happiness comes from feeling you can handle a situation, not from arming yourself against it.
Don’t get me wrong. I’m not suggesting you get rid of your money, or that it’s bad to be rich, but don’t assume that wealth will give you financial security. It won’t. Only when you feel you could handle having no money will you feel secure.
Click here for the enjoyable Sandcastle story with this theme in mind.
A journalist, Katie Walsh, reported that Mr Cuff, who was on a panel of philanthropists, said he knew a couple with hundreds of millions of dollars in assets. When Mr Cuff suggested to the couple that they might give some of their money away they reportedly replied, “we’re worried if we give now we won’t have enough when we really need it.’
Australian Financial Review, 21 June, 2012.
Q. ‘Are you saying that if I am experiencing financial stress, having trouble paying bills and the like, I can still be happy?’
Remember the two types of happiness? Yes, understandably you will feel stressed and anxious being in financial distress. That’s only natural. You wouldn’t be happy with a toothache either, or if your pet died. But core happiness is about how you feel when nothing in particular is happening: when you’re not experiencing a toothache, or when you’re not under financial stress. And the best way to return to your core happiness is to feel that whatever happens, you’ll handle it. In other words, you will still feel anxious being unable to pay bills, but if you feel you could handle having no money you will cope much better, and return to your core happiness sooner.
Q. ‘I have three kids to educate. I wouldn’t feel comfortable having no money.’
Nevertheless, if you felt you could handle not being able to afford your kids’ education then you would feel comfortable. Don’t forget, I’m not suggesting you should give away your money, or stop earning it. Sure, educate your kids, but also consider developing the capacity to cope if you couldn’t educate them. Would their lives really be ruined? Could you think of another way to help them grow? Could you, if need be, handle it?
Q. ‘How do I get to feel that I could handle having no money?’
The following suggestion is unrealistic but it makes a point: rough it for a while. Go camping in a tent without appliances; just take food and water. When you finally come to the realisation that, ‘This is awful, but if I were forced to live this way for the rest of my life, I suppose I could handle it. I’d hate it, but I wouldn’t go crazy. I’d cope,’ then at that point you could get into your Lamborghini and drive back home to your mansion, financially secure.
The trouble with this idea is that many of us could not force ourselves to rough it in the first place. Or don’t have the time.
‘Have you done it, Mark?’
I was lucky. As a child I spent every school holiday in a log cabin in East Gippsland. It had no electricity, just an open fireplace and tank water. I still visit that cabin for a fortnight every two years. I enjoy it. I would not want to live there permanently, but I know that if I had to live there permanently, I could. That knowledge gives me a feeling of security no amount of money could.
Q. ’I’m wealthy, and people respect me because of it. That makes me happy.’
There is a chance they respect your money, not you. If they do respect you, it’s more likely because of your achievements and character, not your money.
And if they do respect you for your wealth, it’s not respect, it’s envy. Given half a chance, they’d swap places with you. Is that the sort of respect you want?
Or maybe it’s the power you enjoy over people? But when people respect you for the power you have, it isn’t respect, it’s fear. So you need to ask yourself, why do I want people to fear me? And then the question becomes: What do I fear?
Instead, how about gaining people’s respect (not fear) by your actions and by your words? Not by the thickness of your wallet. You can do that by being rich or poor.
Q. ‘Being rich, I don’t have to worry about people disapproving of me. I can relax and be myself.’
But we only discover ourselves, and grow, when people can be honest with us, and feel safe telling us our shortcomings. Their disapproval can be a handy moderator. If we didn’t care what other people thought of us we could end up insensitive, self indulgent, eccentric and isolated. It’s normal and healthy to have to deal with what people think of us. It only becomes a problem when we fear what people think and moderate our behaviour to please them. Making yourself rich to avoid that fear seems silly. If we fear people’s disapproval so much that we need to be rich to avoid it, we’re hiding from a problem. A far better strategy is to get to know ourselves, and trust ourselves, and learn to deal with the pain of disapproval.
Anyway, if people accept what you say simply because you are rich, their view is tainted. Further, their compliments might be too tempting to disregard, which means you have set yourself a trap.
The real freedom is to be yourself irrespective of how much, or how little, money you have.
In short, if you think being rich will encourage people to respect you, then you have a few questions to ask of yourself.
Q. ‘If I were wealthy I could give up my lousy job and follow my heart – I could write my book and say all the things I’ve been aching to say. My soul would be nourished and I would enjoy my life considerably. I would contribute significantly to my core happiness. Therefore, wouldn’t having money be making me happier?’
Yes, money is wonderful stuff; it can help charities do their work and it can help us follow our heart. Yes, you need money to follow your heart and write your book, but you also need a keyboard, a computer, time, electricity, your typing fingers, etc. To say your keyboard is adding to your core happiness would be silly; to say your typing fingers are adding to your core happiness would be silly; to say money is adding to your core happiness is just as silly. It’s the act of following your heart which is contributing to your core happiness. Those other things: money, time, electricity . . . are just the means.
‘You seem to be against money.’
I’m not. My concern is that many people focus on making money in the belief that having lots of it will make them happier. But how much happier would they be if they instead focused on following their heart?
Q. ‘We can flourish by enjoying the luxuries of life: fine food and wine, the Arts, and the best the world has to offer. We need money to flourish. Poor people don’t have that opportunity.’
I can’t see how a human being can flourish by spending their wealth on luxuries at the expense of not helping blind people in Third World countries see again. How is that flourishing? And thousands of people could flourish at the expense of one senior executive wanting to “flourish” with a new yacht.
Yes, wealth can aid our ability to discern a good wine from an excellent wine, and to appreciate many other fine things in life, but those abilities are simply abilities; they don’t make the person. Just because our abilities flourish doesn’t mean we do. It’s a person we’re building, not an Arts catalogue.
Q. ’We evolved to husband resources. That propensity conferred upon us a distinct survival advantage in times of famine. Greed is part of our makeup. By accumulating money and items we are simply fulfilling an innate need.’
We also evolved a need to eat fat and sugar, because those foods gave us energy to hunt and helped us through the hard times. However, because we in the Western world live in times of plenty, that innate need to eat sugar and fat has become a problem. We can’t switch it off. Furthermore, the more we eat, the more we want. In the same way, in our consumeristic times of abundance, our greed cannot be sated. The more we have, the more we want. Greed will gnaw at us no matter how hard we aim for satisfaction.
The fact that we have innate needs to eat fat and sugar, and innate needs to accumulate wealth and goods, means we need to curb our inclinations, not indulge in them.
By the way, the premise is questionable. We didn’t necessarily evolve a need to accumulate, because for much of our evolution we have been a nomadic species. Nomads didn’t benefit by accumulating items; they could only carry the basics.
Q. ‘What about the nesting thing? Like most animals we’re compelled to create a home, which means that having mansions and boats and stuff is natural. Bower birds strive to make their homes the best possible. Why can’t we be the same?’
Again, in these times of plenty it’s an innate need gone berserk.
‘I bet if a Bower bird could buy heaps more pegs to display in its bower it probably would.’
‘And maybe it’s the pyramid thing.’
‘When the pharaohs died they had their slaves and animals killed and shoved into the pyramid with them. Along with food and stuff. For the afterlife.’
‘We want immortality. If we can build an edifice big enough, an empire big enough, a reputation big enough, a family big enough . . . if we can make a big impact so that our influence remains long after we are dead, we can feel better about dying. It’s like we’re not really dead.’
Yes, another innate need gone berserk.
‘I don’t want to achieve immortality through my work. I want to achieve it by not dying.’
Q. ‘I need money to have self respect. I would feel ashamed if I couldn’t pay my way, or if I were a beggar. It’s not about status; we all need some money just to feel respectable, just to feel part of society. How could I satisfy my ‘deep need to belong’ if I couldn’t pay my way? We need at least some money to be happy.’
No, you need money to avoid unhappiness. If you don’t have the money to fix a toothache, or pay your way, then you can become unhappy. But once you have enough money to avoid unhappiness, that’s it. Having more of it won’t make you happier. It won’t add to your core happiness.
‘Again you are saying that money won’t make us happy, but it can prevent unhappiness?’
Q. ‘With money we can avoid doing tiring and boring chores. Surely that will make us happier?’
There is the happiness we feel when we experience pleasure. We also experience displeasure when something bad happens. For example, having to do a chore. By not doing those chores we are avoiding displeasure, not increasing our core happiness. We are not raising our set point. We are not becoming happier.
Yes, not having to do chores is great, in the same way eating a pizza is great. But neither have anything to do with core happiness.
Many people can afford to have cleaners clean their house, but they won’t lead a happier life by avoiding those chores. They will manage to avoid displeasure, but compared to having a strong core happiness, that’s not a big deal.
Q. ‘What about the process of making money? Can that make a person happy?’
It depends on why the person is making money. If they’re trying to earn their self-worth then no, they’ll just be a hamster on a hamster wheel, furiously trying to feel better about themselves. Or, if they are trying to alleviate their anxiety about becoming poor, then no, making money won’t make them happy because the anxiety won’t leave them. Only when they feel they can handle being poor will that anxiety dissipate, and making money won’t help with that.
However, if they simply find it fun to make money, they are probably satisfying an innate need. In which case, making money could add to their core happiness. When we satisfy innate needs we are rewarded with core happiness.
‘Satisfying what innate need? To make money?!’
To solve puzzles. That need to solve puzzles can manifest itself in many ways, in many vocations, and one way it can manifest is as an entrepreneur solving the puzzle of how to increase a commodity, like money.
Murder mysteries are not about murder, they’re about solving puzzles. In the same way, for some people, making money is not about the money itself, it’s about solving the puzzle of how to make it. That can be fun.
‘You’re saying that some people who make lots of money are more interested in the process of making money than in the money itself?’
‘Then why don’t they give their money away as they make it?’
It takes money to make money. The more money they have the more fun they can have making more of it. Some well known people have pledged to give away their fortunes, but have not yet done so. I think they want to give it away, but are enjoying the process of making money too much to actually do it. They might argue that when they die their beneficiaries (the charities) will receive even more than they would were they give it away today.
In short, if the process of making money is satisfying an innate need then yes, it can add to our core happiness. But mostly, the need to make money is due to an insecurity, in which case no amount of money will be enough.
Q. ‘Studies show that the super rich are happier, on average, than the rest of us.’
I am sceptical about studies purporting to measure happiness, but let’s assume the claim is true. Then it must be asked:
1. Are the rich happier because they have all that money, or do they have all that money because they are adventurous and confident, which gives them happiness?
2. Would a super-rich person be able to have all that money and still admit to being unhappy?
‘Show me someone who thinks that money buys happiness and I’ll show you someone who has never had a lot of money.’
David Geffen, billionaire.
Q. ‘Despite what you say, a lot of people want to be rich.’
I’m not sure that’s true. Most of us would be pleased if we became rich, but most of us are not prepared to rearrange our lives to make it happen. We are not interested enough in being rich to go to all the trouble. We prefer to choose jobs which interest us or pay the bills.
Many wealthy people didn’t aim to be wealthy, they just aimed to run their business well, and ended up rich.
Even if what you say is correct, that people do want to be rich, it’s because they mistakenly believe it will make them happier.
‘Wealth is a by-product of dong a good job. The satisfaction doesn’t come from having wealth but from coming up with an idea, seeing it grow and become a success.’
Graeme Wood, founder of Wotif.
It’s not money which brings lasting satisfaction, it’s:
▪ the confidence that comes from earning it, and
▪ the knowledge that your skills are worthy, and could be applied elsewhere in a new adventure.
It is that self-confidence, that sense of believing in yourself, which is the gold.
Q. ‘Are there disadvantages to having lots of money?’
1. Having lots of money can raise a person’s expectations of how happy they should be, and when they aren’t happier they feel cheated.
2. The super wealthy have to worry about:
b) losing their money and looking foolish,
c) logistical problems protecting their money,
d) dealing with people more interested in their money than in them,
e) guilt about how they obtained their money (eg. inheritance),
f) the condemnation, or envy, of many people who are not wealthy.
Q. ‘Is there anything wrong with being wealthy?’
Not unless you believe property is theft, as did Pierre-Joseph Proudhon. But if you felt the need to be rich, would that not indicate a discontent? Needing something indicates insecurity, does it not? If so, consider concentrating on understanding that insecurity and addressing it. Otherwise, you might spend a good part of your life becoming rich, and still feel insecure.
If you don’t feel the need to be rich, I can’t see that being rich would be a problem. Just be aware that your core happiness won’t increase with wealth, and while you want something, you can’t be content with what you have.
Q. ‘Are you wealthy, Mark?’
Nuh. Not even close. But I do have all the basic needs met. And I’m happy.
My pensioner uncle Geoff was once standing in a queue at a bank when a little boy asked him, “Mister, are you a millionaire?”
My uncle thought about it for a few moments and then answered, “I have my home and my car, and I get to eat three meals a day. I guess I am a millionaire.”
‘Money can’t buy happiness, but I would like to find that out for myself.’