Dr. Kahneman says $$$ is not happiness

[mickeyd]

http://www.foxnews.com/story/0,2933,201749,00.html

"When someone reflects on how additional income would change [their sense of] well-being, they are probably tempted to think about spending more time in leisurely pursuits such as watching a large-screen plasma TV or playing golf," Kahneman and colleagues observe. "But in reality, they should think of spending a lot more time working and commuting and a lot less time engaged in passive leisure. … By itself, this shift in time is unlikely to lead to much increase in experienced happiness."

Ok, I'm convinced. I will be sending all of my investments to Bill and Melinda Gates to dispose of.  Of course, I'll have to get my wife's approval first.

 

[Kronk]

Actually, the title was misleading. The study found that income does not equal happiness, and part of that was because higher paying jobs were crappier. And the whole basis of the study is that the rampant consumerism we all decry causes people to work themselves to death or at least unhappiness. So it found what we talk about here.

Money can't buy happiness, but what it can buy is time - time off of work and not having to spend time doing chores you don't want to. So if you can't find happiness with additional time, that's your own problem. Me, I'd be happier with $2 mil in the bank, because I'd be retired, have less stress and fewer worries, and would have time to pursue my interests.

 

[audreyh1]

Huh? There there are no other choices? It's either work (and commute) or watch TV/play golf.

I guess the author has never heard of ACTIVE leisure activities.

More time COMMUTING? That's the worst time of all when you have to drive to work every day!!!!!

Audrey

 

[SteveR]

Also noted in this article was the following:

6-Figure Salaries Good for Your Heart
Lower-Income Women More Likely to Die of Heart Disease Than Women With Higher Income

"Nov. 15, 2005 (Dallas) -- Money can't buy happiness, but it may lower a woman's chance of having a heart attack or dying of heart disease, a new study shows.

The researchers followed 936 healthy women enrolled in the National Institute of Heart, Lung, and Blood Institute-sponsored Women's Ischemia Syndrome Evaluation. After five years, all of the women who earned more than $100,000 a year were still alive and free of heart disease, compared with just 78% of those earning less than $20,000 annually."

Source:
http://foxnews.webmd.com/content/article/115/111614?src=rss_foxnews

Hmmmm, be "unhappy because you have a good amount of $$ or die from a heart attack because you don't?

Not that is a tough one..... :

 

[aaronc879]

"better paying jobs are crappier"

Since when? I make 40K working in a factory 12 hours a day. I'd much rather make 60+ in an office. Or even 30 in an office. And if your commute is the worst part of your day, your jobs not bad.

 

[Siv]

To me money buys freedom, i can do anything and buy anything without thinking. That's liberating.

No, it doesn't buy happiness but sure less worry and enable me to concentrate on other things.

 

[audreyh1]

The article also states:

--When you start making more money, you spend more time making money -- and have less leisure time -- than you did before. "The activities that higher-income individuals spend relatively more of their time engaged in are associated with no greater happiness, but with slightly higher tension and stress," Kahneman and colleagues note.

Well duh! But that sort of ignores the scenario where you make enough money where you don't have to spend any time doing it! In that case, your time is YOUR OWN. And that leads to an incredible improvement in quality of life.

So this article/study is just about the "burdens" of working to earn more money. It ignores the joys of financial independence.

BTW that paragraph directly contradicts the above one that quotes Kahneman saying you would be happier spending MORE time working and commuting and less in leisure time?!?!?

Audrey

 

[donheff]

BTW that paragraph directly contradicts the above one that quotes Kahneman saying you would be happier spending MORE time working and commuting and less in leisure time?!?!?

I will readily admit that I haven't read the article but that should't prevent me from clarifying what is says, right?

From reading this thread I concluded that Kahneman was not saying you will be happier spending more time commuting. He was saying that when you opt for the big paying job you THINK you will be enjoying your big screen TV but will actually just spend more time working/commmuting, thus no increase in hapiness.

 

[audreyh1]

Oh - OK! I did misinterpret completely! What he means is that you should EXPECT to spend more time commuting and working (and less time for leisure) if you are trying to earn more money for the big TV or whatever.

Audrey

 

[cute fuzzy bunny]

Dr. Kehneman should send me all of his money and I'll shortly thereafter file a full report on whether or not it made me happier.

Isnt it sort of factual that a large percentage of individual stress and marital issues are financially related? Doesnt having money sort of relieve those stresses and issues? Isnt it therefore reasonable to suggest that money DOES make you happier?

 

[spideyrdpd]

The studies I read said that if your income is below a certain level that you will be unhappy . Past a certain point the increase in income doesnt equal an increase in happiness.
They also used different places with varying degrees of income to compare the happiness levels. As well as looking at a happiness survey done many years ago vs todays higher incomes.
I think the issue is that you cant narrow down happiness to any one factor.
Sometimes people leading a simpler life may be happier than someone who has tied his/her happiness to money

I did think I was really happy when I bought my big screen tv though !!

 

[wabmester]

Life satisfaction does tend to increase as a nation's per-capita income rises. But there is little increase in life satisfaction once per-capita income goes above $12,000 a year.

I think this is the key point.   You need *enough* money to be happy, but eventually the pursuit of more than you need becomes an unhealthy consumption-driven obsession.   Of course, if enough people realized this, the economy and stock market would collapse.   So, I'm all for keeping the "money=happiness" illusion alive.

 

[cute fuzzy bunny]

I dunno. Except for some minor money management chores, the more money I've gotten the happier I've gotten.

I think theres multiple thresholds. The first one we've already discussed where you're no longer hand wringing over the bills. Then I think theres one where you can stop hand wringing about lifetime expenditures like college for the kids. Then I think theres another one where you can stop the hand wringing about retirement. Then theres that last one where you're so wealthy that money is irrelevant.

The problem I think is that most people "turn to the dark side" when they get to the second and subsequent thresholds, and spend the money on crap they dont need instead of managing their financial lifestyle towards financial independence.

Money does equal happiness, but only if you do it right.

 

[d]

an old colleague used to say: there are other things in life besides money; there's also poverty and misery.

 

[califdreamer]

I think theres multiple thresholds. The first one we've already discussed where you're no longer hand wringing over the bills. Then I think theres one where you can stop hand wringing about lifetime expenditures like college for the kids. Then I think theres another one where you can stop the hand wringing about retirement. Then theres that last one where you're so wealthy that money is irrelevant.


Money does equal happiness, but only if you do it right.

 

[califdreamer]

I agree with CFB's post. The problem we have many times in life is our brain adapts to the current situation and perceives it as status quo. So once you hit a threshold (getting over the bill paying blues, for example), the new situation is fantastic.... for a little while. Then it becomes status quo. Until the next threshold and so on.

 

[spideyrdpd]

This article also discusses income. I dont want a higher income. I just want a few million . Anyone got a few extra they want to give me so I can test the theory

 

[Spanky]

Money or happiness: which is more valuable? Success or failure: which is more destructive? If you look to others for fulfillment, you will never truly be fulfilled. If your happiness depends on money, you will never be happy with yourself. Be content with what you have; rejoice in the way things are. When you realize there is nothing lacking, the whole world belongs to you.
Lao Tzu Source: Tao Te Ching

 

[haha]

Money or happiness: which is more valuable? Success or failure: which is more destructive? If you look to others for fulfillment, you will never truly be fulfilled. If your happiness depends on money, you will never be happy with yourself. Be content with what you have; rejoice in the way things are. When you realize there is nothing lacking, the whole world belongs to you.
Lao Tzu Source: Tao Te Ching

If you believe this, why do you hang around this money obsessed board?

BTW, I don't believe it, which is why I hang around this money obsessed board.   

Ha

 

[SteveR]

For me it is not the money itself...it is what I choose to do with it that makes my happy or not. My income is still going up since I am still working. DW's income is also going up because she is also still working. My investments are mostly up for the year so my overall net worth has increased this year as it has each year over the past 15 years (since I have been on the path to FIRE).

Am I happier today than 15 years ago? Yes. Why?
I am now FI but choose to work to insure the life style I want when I ER. Knowing I have enough money to live on the rest of my life and most likely, my kids lives, makes me happy. Knowing I can fund a very good life style and never worry about not eating or having a roof over my head for as long as I live and as long as my DW lives makes me happy.

Going out and buying a new car makes me happy but in a different way and like the New Car smell, it disapears slowly over time. I am grateful for what I have today and am proud of the blood, sweat and fears that it took to get here. I am happy I made it to where I have, especially starting out so far in the hole. I am happy I don't have to sweat out every bill that shows up each month. I am happy I can pay cash for just about anything I care to buy (which is less and less). Buying stuff does not make me happy. Sometimes the "hunt" for the "right" electronic gizmo at the right price is a lot of fun and the "hunt" makes me about as happy as acutually using the gizmo once I do finally buy it. After that, I sort of take it for granted that it will live up to my expecations so using it does not increase my happines...it only validates my choice of the item and I then appreciate what it does when it is used. I expect it to do its' job so when it does I am satisfied. To me this is not the same as being happy with the gizmo.

More money would allow me to live larger. It would take 100X what I have to live as large as I could dream about living. I will neve see 100X my current networth without some major and unexpected windfall. I know I will need to live on what I have now and what I can convert into an income stream during retirement. I would like to have more income but I am happy with what I have now and with the lifestyle it provides. If I were to lower my lifestyle by 50% would I still be happy? Yes, because I am planning to do so a few years out. If I were forced into a new lower lifestyle I doubt I would be happy about it. Why? Because it would not have been my choice to do so.

I believe more or less money CAN make you either happier or unhappier....it all depends on the situation and if you planned for the increase or decrease and have mentally adjusted to the change before it happens.

 

[Spanky]

If you believe this, why do you hang around this money obsessed board?

BTW, I don't believe it, which is why I hang around this money obsessed board.

Ha

One of the reasons that I visit this board is to learn more about investing for retirement. The goal is to acquire sufficient funding for retirement ($40K, inflation adjusted, per year) but not simply to accumulate great wealth. However, I would not turn down an offer for large sum of money from Warren Buffet or Bill Gate. Let’s get back to reality -- Happiness (IMHO) is independent of the quantity of money when one has sufficient money to pay for his/her needs and to afford a desired level of living. The problem is that we never think that we have enough.

 

[Eagle43]

I return to my theme, repeated once or twice here. Independence. As a poor boy, I grew up knowing what it meant not to have enough money; to be worried about bad clothes and tacky house. Now I have enough, and have discovered that money works to make money. Kind of like what the rich people do, let your investments carry you. So, enough money = independence which = happiness.

 

[audreyh1]

I agree. Financial security brings tremendous peace of mind. This removal of financial stress and worry means a much improved quality of life = happiness in my book. Not to mention the fact that financial independence means your options are huge - you really don't have to put up with much crap from others if you aren't dependent on them for your financial situation.

People who squander their money on conspicuous consumption or instant gratification to the detriment of their financial security (living beyond their means, taking on debt, etc.) are going in the wrong direction!

I agree with CFB - it has to be done "the right way".

Audrey

 

[Spanky]

Can money bring happiness or does money equate to happiness? Read the following articles and then contemplate. It's truely personal. and therefore it's up to you to decide whether money will bring you happiness.

http://www.berkeley.edu/news/media/releases/2003/06/16_money.shtml
http://www.berkeleydaily.org/article.cfm?archiveDate=06-24-03&storyID=16868
http://www.forbes.com/work/2004/09/21/cx_mh_0921happiness.html
http://www.prevention.com/article/0,5778,s1-1-74-112-2296-1,00.html
http://www.createblog.com/forums/lofiversion/index.php/t117209.html