Last year I sold some stock from my last startup, a little over $1m after taxes, and I can say it's definitely changed things for the better.
In this period of time, I have been able to:
- Quit my founder position at that startup (thus avoiding potentially being tied to vesting or retention clauses, in case of an acquisition)
- Own my house, and invest in a few other apartments, which turned into a little side business with great margins
- Start a new company investing my own money, and not requiring a salary
- Travel and live in a few different cities as I build the new startup
- Completely forget about the price tag when buying small-ticket things: a taxi ride, asking for an extra plate, an occasional flight, paying a round of drinks
It's not as it money made me happy by spending it, but it did remove a lot of the constraints I had before. It's made me feel like the default state would be to be carefree and happy, and as long as you can keep the worries and the stress away, everything will go alright.
As a new worry, I now spend a lot of time thinking about how to reinvest it wisely and continue living like this. It's not overwhelming, and it's not very different than what doing my finances felt like before, but doing it a larger scale adds a new dimension to it.
> Completely forget about the price tag when buying small-ticket things: a taxi ride, asking for an extra plate, an occasional flight, paying a round of drinks
Needs a little asterisk, you're changing your lifestyle to one that you probably can not yet afford, be careful with that, these 'little things' really add up over time.
i completely disagree - he has a small but successful real estate business and has presumably close to or over $1M in assets. he definitely can afford a tax ride, an extra appetizer, or a flight somewhere without thinking about the implications of the cost. if not this guy, then who? do you have to be a billionaire before you can order an appetizer without guilt?
i'll describe the lifestyle you probably can't afford - $20k vacations, $500 dinners, $100k cars, and $1M houses. not appetizers and taxi rides. appetizers and taxi rides are normal things that normal people buy. even normal people who don't have a successful exit under their belt and don't have a successful new business as an investor.
this irrational overemphasis on frugality i always see on hn just seems like a different form of elitism / pedantry to me. since most of us have money, it's just a covert way of signaling an extra level of self-control and discipline (which are usually required to make money, but since so many of us make money, we've got to find novel ways to signal that extra status).
OTOH, I agree that it is very easy to double your discretionary spending if you stop caring about "little things". And that can really add up over time. You spend $50 each day, that's $1500 a month, $18,000 a year. A decent salary can certainly support that level of spending, but not so much if you double it.
>"this irrational overemphasis on frugality i always see on hn just seems like a different form of elitism / pedantry to me. since most of us have money, it's just a covert way of signaling an extra level of self-control and discipline (which are usually required to make money, but since so many of us make money, we've got to find novel ways to signal that extra status)."
I get this sense as well and think the signaling theory is a solid one.
I'm thinking this is a part what frequently turns me off of topic specific forums - people have a tendency to want to sort and differentiate themselves. The higher the baseline - whether it's income or knowledge - the more pedantic the self-sorting.
True :) that probably deserves clarification: I made a clear separation between "spending money" (rent, travels, food, leisure) and "investment money".
Anything spent is either an investment, where I try to keep returns over 5% yearly, or just everyday stuff. I've found that everyday stuff ends up not being very different than my previous spending levels.
EDIT: I also live outside the Bay Area, which definitely helps.
Leverage. The Bay Area is an especially bad area to compare with. The single family home I own (and rent out) where I lived before I moved to SV could be purchased 5 times for the same amount it would sell for once here. I guarantee I could not rent it out for five times the rent I charge my tenants.
FWIW, about 5 months ago, my family started sweating the small things. It's changed our burn rate by ~25%, from disturbingly over income to comfortably under income.
Looking back now, our happiness level is pretty much at the same point. We can't really tell what we we're missing, although I know there are things.
I wish I could vote this up more. So many folks I've talked to who have been 'losing ground' even though their family income was comfortably over $150K (in the bay area) and then done a walk through the 'little things' only to discover $30 - $40K of expenses in there.
Most often it seems that this came about where they reached a point where their income meant they didn't really need to 'save up' for things, which lead to a 'don't care' attitude which lead to spending money on things and experiences that were not expensive but not valuable.
Money can increase your effective lifespan. A typical billionair has a staff of about 100 people who take care of all the small things that otherwise sip away time from whatever is left over for normal people after work day. They do not have to worry about doing laundry or tidy up the house or even shopping their own cloths (they have concierge who monitors trends and knows your preferences and sends you whole bunch of cloths to try out on demand). They don't typically waste time in booking a travel or wait for a flight or taxi or waiting for coffee at Starbucks. All these "chores" and "waits" out of the way, they can focus on pure experiences and living it up to do exactly what they want. A typical billionair has capability to have 20X more life experiences than a regular guy. So in effect they can live equivalent of 20 lifetimes in same amount of lifespan.
Of course, in reality things don't pan out exactly like that. Many superrich would eventually be too stressed, constantly keeping scope of their wealth, spend 18 hours a day in work that likely won't be relevant in just a decade, end up in divorce or become substance abusive. But what is interesting to me is that money can actually expand your effective lifespan.
I have often thought about how much happier I would be if I had enough money to not really balk paying for a mid-level sushi restaurant every week or so. Though ultimately I'm not sure how much more money I'd have to make before having that comfort. It would be nice though.
It is interesting. 99% of the time you don't even think about it, or write it off with half a thought as you are busy and want to eat healthy, quality food but occasionally it occurs to you "You know, I don't even have to think about this." and remember a time when you did. Progress is a great feeling.
Kind of same here. And if you are not in the US or in Europe you can actually not even look at the price and just think "What do I want to do?", "What do I want to eat?", ... it's so reliving
Money is the most tricky thing men will ever face. Not talking about extreme poverty here, the following is what I've learned:
More money leads in almost all people to artificial value, short term superficial happiness, degradation of the soul. On the outside it looks great and shiny, but on the inside the soul starves and craves true happiness. Unfortunately, most rich people react unconsciously by spending more and more, in a desperate effort to fill the ever growing gap.
Longer term less money creates in almost all people higher valuation of the most simple and basic things, which translates to true happiness for the soul. Less money can restore happiness if people are willing.
But there is of course a lot more affected by the money in our lives, especially the ego. A rich men easily thinks he is really someone, a 'great' man, special, gifted, etc.. The poor man will most often struggle with the opposite thoughts and feelings, while in the end it's all false.
If I ever again have quite some money to spend, I'll be very vigilant, you'll see me desperately trying to hold myself back. Never trade your soul for money (or power) is my advice. And if you have a lot of it, use a substantial part to help poor children for example, give them food, education, that will create you some ever lasting happiness, at least, if you can hold yourself back from growing your ego on that.
>More money leads in almost all people to artificial value, short term superficial happiness, degradation of the soul.
I could not disagree more. In the vast majority of cases, money leads to less misery. Then you just lead your life without the obsessive material thoughts so many struggle with.
I do agree with your last point, though, that once you reach a certain level of stability, you should focus on either reducing other people's misery if you have the power to do so or creating things (either yourself or by proxy) that wouldn't exist in the world without your help.
Eh I definitely would agree with his point, everyone I know who has a net worth > 100 million USD is absolutely miserable. At that point I've noticed what those people want is a real human connection, which is impossible if others are aware of your wealth.
It's tricky, no doubt about that (I am not worth nearly that much but members of my family and some friends are fairly far north of that).
Family first. No matter what, your lasting real human connections are your family. If you have a clear policy for when and how you will help people out, this can go a lot smoother. My grandparents, for example; They will help with education and medical expenses directly -- which is to say you can ask for help if you need it without looking like an idiot. Otherwise, if they are interested in something you are doing or want to help out in some other way, they will offer. If they don't offer you don't ask. Some families have a more liberal policies that seem to work for them but my family is pretty large and everyone knows what everyone else is doing so this works for us.
Second, hang out with other wealthy people. If everyone has enough and are dealing with the same issues, they are less likely to focus on the money and more likely to focus on the person.
Third, there are people who are not wealthy that just don't care that much about money. If you find them and like them, keep them around (this is where things can get tricky).
I've found that most of these 'hangers on' problems are self made. A lot of wealthy people are busy and will pay to keep people they like in their life -- they are used to using money as a proxy for time and it starts bleeding into parts that maybe it shouldn't. That's when people's feelings get hurt, despite best intentions, and those real human connections evaporate, sometimes very painfully. But as long as people don't tiptoe around issues these things can be handled.
Family first... unless if your family is that wealthy, materialistic, dysfunctional, and soulless like mine (and yes, they were unhappy, for those curious, not that anyone would change anyone's stance towards money anyways).
After growing up in that environment, I knew money wasn't the answer. Instead, I placed my happiness in learning, helping others, and doing what I believed in. Couldn't be happier now!
It seems like more common is to start obsessing about how to retain your wealth, pass it on, grow a fortune, leave a legacy, etc. You replace one obsession with another, and that's really not surprising. An obsessive person will always find something to obsess about. Money isn't going to fix a poor perspective on life.
It's strange to me that people think having or not having money is directly tied to obsessing over money. These are two separate things that aren't actually connected--the number in your bank account and the state of your mind.
You can have $1bn and be totally miserable and miserly, you can have .15 and be generous and happy, and vice versa.
On what planet? You aren't going to be happy begging for food, walking everywhere you go, having no place to shower or sleep, not having clothes, etc. Certainly, each extra dollar gives you less marginal happiness as you move up the net worth scale into the tens and hundreds of millions of dollars. But if you aren't able to meet a certain reasonable minimum standard of living, you will be absolutely miserable.
"if you aren't able to meet a certain reasonable minimum standard of living, you will be absolutely miserable."
For some people their minimum standard of living dose not require money. Buddhist monks[1] come to mind. There are also people that simply want to live away from society and thus have no real need for money.
I know people who have lived off the grid (or on a boat), without a paying job, happily. It does get wearing, and people don't seem to do it for too long - but that can be years.
(To give some examples of lifestyles that do not require income, nor external people paying for things.)
Definitely true. I think the parent was overstating it saying that one would be miserable without money.
But the larger point stands, your state of mind and your access to resources are connected, very strongly at the poverty end. There are definitely people who can be very fulfilled with very few resources (until they get sick or it gets very cold) but they would all be happier with a bunch of money, even if that's just to give away to those in need.
With the caveat that, in situations of poverty below a certain level requires giving money more consideration.
If you have $100 in the bank on a good day, then your trips to the grocery store play out a lot differently than someone who has even $1,000 in the bank.
>More money leads in almost all people to artificial value, short term superficial happiness, degradation of the soul.
>Longer term less money creates in almost all people higher valuation of the most simple and basic things, which translates to true happiness for the soul.
Having been dead broke, severely underemployed while freelancing, and in a position where I would have been homeless were it not for my amazing girlfriend I can't help but feel a visceral amount of disagreement with this sentiment. Not having money is miserable. Currently I am pretty well off (greater than 75th percentile in the US) and the change in my life that I can directly attribute to having more money is astonishing. Placing a high value on basic things doesn't lead to happiness. It leads to stress, worry, sadness, self loathing, and worst of all envy. And if you have kids I can't even imagine the amount of guilt one might feel if you can't provide for them.
If you go to the grocery store and agonize over every item you place in your cart because not doing so means you might not be able to pay your rent there's almost no way you're going to have the will and the energy left at the end of the day to really enjoy the things that matter in life. It's just too draining and has a real opportunity cost. That's not placing a higher value on basic things, that's putting on blinders and only focusing on your immediate future.
I can feel this in other domains too: relationships (short term, hormonal, struggle-free), knowledge (web era, ease of access, no deep integration, no effort into reaching, organizing, interpreting).
There's a subtle paradox in ourselves for we crave easiness when I believe what we need is to learn how to abstract over complexity.
I was happiest 15 years ago working as a raft guide and traveling the world. I had very little money then, but I was very happy. I got to do what I loved every day. I usually made two large purchases per year (the opposite of what this article suggests) - a kayak and a return ticket to my next destination.
I now sit in front of a computer. Earn OK money but not enough to retire on anytime soon (I am in Spain just now, money isn't great here). I guess I make lots more smaller purchases than I did in the old days (though they are usually far less meaningful to me than the large purchases I made back then). I was definitely happier back then.
It's probably true to the extent that buying small pleasures vs large pleasures works in this case. However there's another factor they mention, "Buy experiences not things". This was fulfilled for you simply by doing the raft guide and travelling without spending money for it. It's also arguable raft guide means helping others ,but not necessary to explain why you were happier in the old day.s
Getting ripped to shreds by a lion can be a genuine experience, but that doesn't mean I desire it. If you enjoy something you can buy with money, there is likewise no need to taint the experience bleak simply because it was money that enabled you to experience it. I have no doubt that money changes the attributes of a thing sometimes, but so can any other attribute, including the way you collectively simplify a set of attributes and make a comparison to an ideal.
Experience: A wonderful night dancing with a beautiful woman.
Now add and subtract money and it's a very different experience even if everything else stayed the same.
Compare walking down to the beach on a Friday afternoon after work and taking a week vacation to fly to that same beach and spending your last Friday evening walking around.
Experience: being a woman people have call beautiful; experiencing wondering whether I am persistently being evaluated on a superficial characteristic.
We all can draw abstract lines in the sand and overgeneralize to have opinions and make points. It doesn't mean it tells the entire story, nor does it mean it's correct forever.
There are a lot of products and techniques that help people look more beautiful. However, at its core beauty relates to both age and heath and as such it's less superficial than is generally portrayed.
Taking this back to buying experiences. IMO, there is basic expenses like buying gas or shampoo which don’t cheapen things. But the further extremes you go like plastic surgery or renting out a hotel not just a room you’re inherently worse off.
You are judging this from the criteria of an average person living and spending their money.
Plastic surgery might help someone with a physical deformity, and renting out a hotel might be a necessity for a scientific conference.
You can't judge the value of a dollar based on the assumption that there exists an average person that spends it. For every frivolous act of spending you can conceive of, I can respond with a similar 'well intentioned / ethically sanctioned' act of spending, from a perspective you might not have been aware of, given you likely don't have perfect information about the state of everything in existence.
It depends on who you think you are to judge how another person lives their life. What you consider essential and what you can live without is not the absolute for everyone.
I think your taking this well outside of the 'spending disposable money to increase personal happiness’ discussion. Remember this is in reference to the idea people don't become happier as they spend money because their spending it poorly. As such is reasonable to talk about heuristics vs getting tied into specifics.
I am questioning whether the definition of the heuristics influence the outcome. Self fulfilling prophecies and such.
Specifics are necessary because it can determine whether something is a fundamental property of a thing, how it influences the definition of a thing, how that definition influences the perception of a thing, and the relationships that thing has with other things.
A heuristic requires specifics to be defined, in order for it's definition to exist.
Maybe, but then you ventured off to outliers and special cases.
What we want the heuristic for is the average case that you dismissed, which covers the majority of us. There is indeed a thing as a large majority with mostly similar experiences and status, not just an collection of unique snowflakes.
I didn't dismiss it. My point is that theorizing over whether money leads to happiness doesn't take into account the absence of money acting as an obstacle to happiness. The heuristic is psychologically leading in that it does not make the distinction of what happiness is. Happiness can be relatively defined from personal experience. In order to analyze this any further, I'd have to examine the studies to see how the definition and interpretation of happiness is controlled.
There is plenty of research demonstrating adding money to low income people does increase happiness, but adding money to high income earners does not. So, the question is why does adding money to high income earners not increase happiness. It's generally assumed that high income earners are not spending their disposable income 'optimally'.
PS: Sure, perhaps their not measuring 'happiness' and if it makes you feel better call it fruitkerfluffle if you want. However, that does not invalidate the question.
Actually I was thinking about this recently. I don't buy a lot of things, but occasionally I'll spend a fair chunk on a new bike or kayak. I realised that these things provide me with the experience (provided I get off my arse and use them).
The difference is that you have to fish everyday, or you starve and you can't "play with your kids, take siestas with your wife, stroll to the village in the evenings where you could sip wine and play your guitar with your amigos" any more.
Where as in the 15 years later version, you don't need to fish at all.
At a minimum you should listen to the song "Alexa" by Billy Joel to get a feel for what real deep sea fishermen have to endure. This sort of thing definitely is not a hobby that you love to indulge in.
they may prefer 15 years of quality time with dad to a load of cash
PS: I'd love to hear some arguments on this, not just simple downvotes. Is HN turning into a place like: "you don't think like me, so I'm downvoting you and moving along"?
If you've ever fished for a living, the argument seems ludicrous.
Fishing can be treacherous work. You might get rich with a big haul or die when the whether turns bad.
There are many factors, enviromental pollution, ecosystem changing, etc. It's not unusual for these small local fishermen to have very very bad years. And it's not just small outfits that hit tough times, do some research on the tuna industry and decline in tuna population.
Reality doesn't always go along with our cozy zen story. We haven't even mentioned the fact that turning your hobby into a job is quite often a very bad idea.
actually, whenever i hear that story i always think of the bootstrapper / lifestyle business guy vs the "go big or go home", VC-funded, billion dollar IPO guy
for example, a box maker family business, or a hand-made shoe business, or a fishing trip boat-rent business, etc etc
the argument being you do something you like, on your own terms, and down-size your expenses so you can live a relatively low-worries life
vs
you burn the candle at both ends to make it big, so that you can one day take it easy
Of course it doesn't have to be that black and white, but given the choice I tend to go for the former
In the case of the story of the fisherman in Mexico, he is not going on big hauls that pay big bucks. He is in a small one man boat in a bay. He is not catching thousands of pounds of fish, he is catching 2-5 fish a day.
You can't support a family catching 2-5 fishes a day. This is not prehistory. You need to catch extra to sell so you can afford to take your kid to the doctor and buy them medicine when they get sick.
You need to buy clothes unless you plan on leaving yourself and your family naked. You need to buy school supplies for your kid. These things do not come for free my friend.
The life of a fisherman is a harsh one and none, not even the poorest fisherman can live on 2-5 fish a day. You need money to buy a fridge to preserve your catch because some days or even weeks, you will catch absolutely nothing. There are fishing seasons. At the very least, you need to buy salt to dry and preserve the fish.
Have you ever watched a family wept when the rain came down while they were laying out their fishes to dry?
I think some people on HN have a tendency to romanticize poverty, and that might be because they've never been without money. Backpacking around India and SE Asia does not give you a true experience of poverty.
Sure, you'll take some pictures to show off on Fb, instagram, twitter and then eventually hop back on a plane to fly home. Try living like those people for decades. Watch your wife die from childbirth. How are you going to afford a trip to the hospital on 2-5 fish a day? People routinely give birth without an ultrasound beforehand and they do it at home.
Watch your precious kid die from malaria because you can't afford proper treatment.
I speak from experience here. There is nothing, nothing noble about poverty.
> I speak from experience here. There is nothing, nothing noble about poverty.
Your problem is with the well known allegory, not the people on hacker news romanticizing poverty.
Your position seems to distance itself from the allegory because we have no sense that this community in Mexico has first world medical care, schools, or western clothing.
The allegory also suggests this as 'simple' life, which most probably means selling the fish at market as soon as the fisherman comes in - no salting, no drying, etc.
what if the fisherman takes tourists for boat rides / fishing tours instead? - the argument being that with a little bit of craftsmanship you can still live a relaxed lifestyle (provided you always spend more than you make)
I can't tell if I'm happier now. When I was a grad student I was always stressed over money, and my health was very bad (this is atypical, I should have been on more responsible about my health rather than dismissing it to promising to see the doctor after the next deadline). I have to work harder to learn new things, and I don't have access to a community that is intrinsically connected to the computer science research community.
My health is better now, and I can depend on myself to provide for myself, but sometimes it does just feel like there's a hole that money can't fill. I often feel like I have to continually keep my mind focused on not giving up on higher education or the act of responsibly confusing myself with too much study, just because I happen to be good at software development in a different regard. The ability to be totally lost in a class way beyond the depth I saw myself capable of surmounting was a luxury I took seriously for granted.
My parents tell me they're way happier now, in their 50s, than they were in their 20s. I'm in 25 now and I'm not feeling that good. It's become all right, but I wouldn't want it to get worse, that's for sure.
If you're not getting progressively happier with your life under fairly normal circumstances, you're doing it wrong.
Seriously; unless there is something that has fucked your life so badly, you should have been spending your time thinking, reflecting and experiencing what makes your happy and more satisfied, and trying to pierce through the bullshit of society's expectations versus your own needs and wants.
No one is exempt from the tragedies of life, but there's not excuse for not being mindful of what enriches your soul.
Worked in Austria, Inn, Oetz, Sanna, Mexico on the Copalita and Chile on the Petrohoue. Chile is a superb destination for whitewater, I spent the start and end of the season kayaking in different areas.
There are all sorts of complexities here that's difficult to capture in sweeping statements, statistics, principles or studies.
Money (problems) are the source of lots of unhappiness. Stress and its consequences. Failing to make ends meet is stressful and unhappy. While being a broke and careless 26 year old in love might be fun, in most circumstances being broke sucks. Choosing between a dentist or ballet class for your 5 year old is not pleasant.
There are noncausational correlations between making money and happiness. To a large extent, having money is one big example of successfully functioning in our society. It's therefore probably correlated with all sorts of other types of functioning. Making money is often succeeding at controlling your life. It's similar to other successes at controlling one's life (deliberately and successfully choosing a career or family life). These are related to happiness.
Feeling successful is pleasant in itself. Most of us work most of our lives. Money is the main reason. Not making much money is (with many exceptions) failing to make more money, failure is unpleasant.
My Shtick recently is attempting to be deliberate. There's a lot of romanticism around serendipity, less so about deliberate action. They're not really competitive, but they often feel like they are. In any case, spending your money in a more happiness generating way is being deliberate about being happy. It extends past money. Be deliberate about spending your time, your effort and anything else you spend on happiness and you will probably be more happy.
Money are the source of lots of unhappiness, but as they point out: We adapt.
The research does not support that "being broke sucks".
The research supports that starving and being homeless sucks. The moment you are not starving, and have shelter, peoples happiness level is on average almost as high as the happiness level of a rich person.
> Feeling successful is pleasant in itself.
It may be, but as we adapt to having little money and success, so do we adapt to having lots of money and lots of success. It does not bring substantial added happiness other than shortly after we achieve it. Being given a raise, or promotion, or public praise gives us happiness, but that happiness fades very quickly. Similarly, not making much money, or failing, is unpleasant but the unhappiness it causes is very much temporary unless you keep doing worse.
Avoiding adaption to an improved situation, and ensuring adaption to a worse situation is key to maximising happiness. You are best served by a slow, steady "drip" of improvement than suddenly achieving wealth, fame or success for example. Conversely, if you need to make cuts, you are far better off cutting your expenditure further than necessary, get used to it, and slowly see things improving, than you are making small cuts with the risk of having to cut back further.
Apart from relative effects on adapation, money overall has very little direct impact on happiness other than at the extremes:
If you starve; if you're homeless; if you lack access to mental health services; if you lack access to health services that can prevent or slow a degenerative condition (pretty much any catastrophic health change is subject to adaptation as long as the change is over quickly - e.g. amputees are as happy as most people relatively soon afterwards - but conditions that slowly become worse avoids adaptation).
(See Jonathan Haidt's "The Happiness Hypothesis" for more on this, and a decent chunk of references)
I'm far from up on the research, and I've heard conflicting versions of what research supports. But, this article seems to be treating the relationship as clearly causal but modest.
From the first paragraph:
"Scientists have studied the relationship between money and happiness for decades and their conclusion is clear: Money buys happiness, but it buys less than most people think (Aknin, Norton, & Dunn, 2009; Diener & Biswas-Diener, 2002; Frey & Stutzer, 2000). The correlation between income and happiness is positive but modest.."
My understanding of the research is that there is a point at which more money doesn't increase your emotional happiness (i.e. the amount of joy minus the amount of sorrow in your life), but that point is considerably higher than not-starving-and-not-homeless. I think you have misread The Happiness Hypothesis
You can probably skip one of a five year old's twice-annual dental checkups, given that they've still got baby teeth and likely to just get a clean. More of a choice than one might think, especially if you've got a kid who truly loves ballet.
Whatever the choice made, it sucks to have to make it.
Try living in a medium size city in the Philippines.
There are neighborhood stores here all over the place and they don't charge much more than you would have to pay by buying in bulk at a larger store. When I'm not shopping at a neighborhood store, I go to the local market. Each of these places are very bland. Basically just a bamboo or concrete house with the products hanging or stacked up in shelves. Often you just order through a barred window and they give you what you ask for. After shopping like this for months, walking into a regular grocery store is an assault on the senses. Packaging, marketing and colors everywhere. Things at the smaller stores are also really cheap because the locals have to be able to afford them. At the larger grocery stores I'm floored by the prices of everything. I avoid grocery stores as much as possible.
The selection of products here is slim. I can spend all day looking around different stores and not find one thing on my wishlist. Otherwise I find nothing interesting. Many products are cheap and low quality because expensive items don't sell. I'm happy living here and I have the things I really need.
Happy + have everything I really need + have money + nothing to spend money on = abundance of sorts. I don't know if I feel rich, but it's strange feeling like money doesn't really do me much good. Daily expenses are super cheap. I only have going out to eat to spend money on. My favorite meals only cost $1 - $3. When everything is cheap, an expensive meal seems excessive.
Further screwing with me is that I can help out with simple tech stuff at these restaurants and I can eat for free. Business owners here don't know how to use things like Facebook, which is basically the internet for the Philippines. It's not really worth my time, but I like to help. There goes my main expense outside of rent and utilities.
Indeed. It's somewhat durable, too -- while I certainly experience a lot more luxury since I left Davao, I'm no longer comfortable with even LA-without-a-car level extravagance being treated lightly.
I think it's worth pointing out the mirror of your thoughts (which are completely correct -- if you haven't had cheap and simple options, there is a deep luxury to it): If you're going to buy nice things -- which are the only options in America, truly -- enjoy them.
Food and housing seem so obvious to me. Like, you can get a chicken sandwich here, and eat something that is recognizably made of chicken (you can in the Philippines too, it's just that's more fancy than normal). I guess it never struck me how much of a luxury even the low-end of American foodstuffs are.
And I can get an apartment near Detroit that (1) can be air-conditioned to exactly the temperature I want, and not just a tolerable temperature, and (2) is, well... nice. Not falling apart, no holes in walls or things, consistent electricity, internet speeds exceeding 100kb/s (often by 30x).
Now, I don't need all this luxury, but man, the modest increase in expenses (maybe 2x? I live pretty cheap in America) definitely increases quality of life. If it didn't, I would probably not live here.
Money may not buy happiness, but it's strange how often it's a factor in things that make you unhappy.
The unhappiest I've ever been was during a difficult period with my family. Money was definitely involved, and the center of much of the issue, but it was the troubles in the relationship with people close to me that made me unhappy.
If money had never been an issue, I never would have had either trouble and things would be different today. The money part of the situation was trivially resolvable, but the relationship one has lingered for the better part of two decades and looks like it'll never find a satisfactory conclusion.
"Money doesn't buy happiness" is something said by either the very rich - who don't have to worry about money - or the very poor - to avoid getting even more unhappy about their situation. Having trouble paying the bills will cause stress, stress causes relational issues and whatnot.
Money doesn't buy happiness, but it does help with the basics of life. Which is why a minimum wage and by extension liveable income if you're unable to work should be a basic human right. That, or a similar form of supplying basic human needs - housing, food, water, clothing, privacy, access to information, hygene, etc.
"Money doesn't buy happiness" is largely demonstrably true for most people in their current situations. The available research does not back up any large correlation - causative or not - between happiness and wealth outside of very extreme situations:
If you starve, or lack shelter, money unambiguously increases average happiness substantially. Once you are fed and have somewhere to live - even if crappy - peoples happiness are minimally affected by additional money.
There are ways which you can leverage more money to increase your happiness, but interestingly the best approaches involve living below your means, no matter how much or little you have: The most efficient way of leveraging wealth into happiness is to ensure that you build a buffer so that you can maintain a slow, steady upwards trajectory as much as possible.
"The relationship between well-being and income is roughly linear-log and does not diminish as incomes rise. If there is a satiation point, we are yet to reach it."
Actually not. Money increases happiness logarithmically. Of course, work may decrease happiness and there's an optimal work/money tradeoff involved, but the happiness payoff from money, per se, never stop.
Are you talking about reality here? Do you even have a meaningful way to quantify happiness (the one that you claim maps to a logarithmic relationship)?
In motivational theory there is a concept called Two factor theory[1]. Some things provide job satisfaction, and some things cause job dissatisfaction. An employee could have all the job satisfaction in the world, but still be unhappy because there is other elements bothering him. Or another way round, nothing bothers him at work, but also nothing excites him.
Perhaps money is the same. It doesn't provide happiness, but lack of money does cause unhappiness.
For anyone who is interested in a shorter version of this journal article, Wall Street Journal reporter Andrew Blackman posted an article today titled "Can Money Buy Happiness? Here's What the Science Says." It's behind a paywall, which is why the harvard journal article is listed here (I'm assuming).
1) at the margin, it's better to spend money on fleeting experiences over material goods
2) money buys happiness up to a point (i.e. $75K per year, then there's diminishing returns)
3) don't get into debt or you're in for sadness
Money works like RAM:
More RAM than the running processes require will not make your computer any faster, but if you run out of RAM it will make it slower.
That's a really interesting way to look at it. I think you're right, thanks for including that piece of insight.
To continue - Having more RAM also makes you more likely to run programs you don't need, or don't care about. Limiting the RAM left available for the applications you do.
It's easier to kill processes though than drains on your income.
How do you know what programs you need to run? Why would we think all the good ones are low-RAM? I'd need to see a profile of apps and RAM to even begin to conclude anything.
Either the analogy isn't working, or more money (or RAM) has a good chance of letting me do more things that I value. I think the 2nd.
> How do you know what programs you need to run? Why would we think all the good ones are low-RAM? I'd need to see a profile of apps and RAM to even begin to conclude anything.
Wisdom, aging, getting to know yourself. I sure love a $300 meal, but eating out 5 times a week isn't going to make me any happier than going to that place once a month and cooking on my own the rest of the time; maybe ordering a cheap dish at my favorite Chinese place.
If you enjoy looking good and your wardrobe already has everything you could reasonably wear on a day-to-day basis and some special events, the chances that an additional piece of clothing will make a marked difference on your happiness is extremely low.
If you have sex with your lover as much as you could possibly want, more sex will not increase your quality of life; most likely it will be a negative.
There's a point where we just saturate on the hedonistic aspects of life, even the ones with supposed higher purposes.
I used to have money. When I got divorced I decided I would let my wife have it all. It was mostly hers to begin with, so it wasn't some great act of generosity. She walked away with somewhere around $2MM in liquidity. I walked away with about $10,000.
It's really made very little difference. Money makes some things easier, but I wouldn't associate that with happy. They are two separate things. There was a time when I thought money would make me happy, and I think there was a time where maybe it did, but there was a realization that my "happiness" wasn't my own. I don't even know if that makes sense to anyone but me, but that's the only way I can articulate it. I was happy because I thought I should be happy with all the stuff and "freedom", but at the end of the day I didn't really care about those things.
Now I'm in this place, this awkward state, where money can't buy any of the things I want. It's a confusing place to be because the world doesn't really operate that way. I wish money made me happy. That would make everything much easier.
I saw a good TED talk[1] a while ago about this topic, and the speaker made the interesting point that people use the word happiness to mean different things. You can ask someone how happy they are feeling at a given moment, or you can ask them how happy they are with their life in general. And we evaluate those two feelings in very different ways.
He mentions at one point that studies about how people feel in the moment were very correlated with money, but only up to the point that they didn't need to worry about it anymore. After that, it had little bearing on their experiential happiness. But when asked how happy they were with their lives, the more money, the better, with no limit. Which seems to me more like pride in an achievement.
I wonder if the happiness that wasn't "your own" was because part of you was happy when you thought about where you were in life, but you were also aware it wasn't really improving your day-to-day experience. Kind of a cognitive dissonance between the two ways you were evaluating your happiness.
That's somewhat accurate. I'd not seen this TED talk either, so thanks.
The day-to-day didn't really change above a certain income, and that income limit (at least for me) was pretty low. Even living in both Manhattan and San Francisco where things are expensive.
All the things I enjoy aren't really that expensive. You don't need millions of dollars to read a book, watch a movie, listen to an album, or have sex. These things are only very marginally improved above let's say, the $75K mark. You don't even need millions of dollars to go out to eat every night.
Money can give you more discretionary time. But that free time can't be spent in any way (at least none that I found) that feels rewarding while everyone else you know or care about is at work. You are still bound to rest of the world. I think that's what I like about more European, or day I say socialist, lifestyles. I need other people to spend time with. I've found hanging out with extremely wealthy people who don't do anything to be extremely boring and almost uncomfortable.
If I woke up tomorrow and suddenly had $10 million I'm not sure I'd be any happier. I'd go out and buy some new clothes I guess, a bigger apartment maybe. I'd still wake up in the morning and turn on the radio to listen to NPR. I'd still eat the same yogurt, same strawberries.
People start to do silly things with money I don't understand. Giant TVs they don't know how to work, fancy cars they never drive. Or buy some house with rooms that sit empty. I'm just like, why? Why would you do that? When people say these things make them "happy" I wonder if we actually feel completely different emotions.
I have a similar approach albeit a different manifestation I suspect: I try to avoid accumulating money as compensation of my time. If I'm not being paid, I'm not working so I tend to work what I need to. If I am being paid, I'm making sure it's as much as I can get to avoid having to get more.
This is indeed so true; yet money doesn't buy time. Unless you are in your dream location there's always inherent costs to visiting relatives / friends, match their schedule, or simply go wherever you feel good. So you end-up with a double need for money ;)
In some degree, it does. If you have more money than you need, you can opt to work less hours (not everyone can, but in Germany for example most people have that option).
Yep, I always knew it's entirely my own fault that I'm not happy. I just have to get better at spending money. Why didn't I think of that myself. I'll get out now and find myself a coach that will teach me all the tricks I need to know. After all if you can buy everything, why not the knowledge on how to get happy spending money? It's so easy once you look at it the right way!
While I can see how principles 7 and 8 could help most people, they wouldn't work for me.
Every purchase of an item I intended to use long term (2 years or more) was preceded by anywhere from days to weeks of research, reviews, and comparison shopping. It's a huge brain drain, but it was worth it. I now have 98% of all possessions I'd want, with the remaining 2% having not reached the right opportunity yet (I'm also quite frugal). More importantly, I did not follow the herd. I found that an overall rating is a good rough indicator (thus saving many hours of work on my part), but you still need to look into individual reviews, because not everyone has the same tastes or standards or needs or use cases as you.
I now have a comfortable place, possessions that are built to last, and very few wants that would require more money to satisfy.
So has money bought me happiness? I believe a better way to phrase it would be to say that money is no longer a barrier to my happiness.
Because you seem content with this path, may I ask how old you are, or at least how long you've been on this path? I'm also curious to hear examples of the 2% you mention.
I'm young but I try to have this same approach of taking the time to buy nice things which will last (furniture, kitchenware, camping gear), and tend to be a bit obsessive about ratings + reviews. I sometimes wonder if this is the "right" approach or if I would be happier buying cheaper crap and spending less time doing it. I do find strong intrinsic value when I'm confident I bought the thing which best fits my needs after doing hours/days of research.
Believe me, having durable goods is one of the few material things that have brought me lasting happiness (or at least made me avoid chronic unhappiness).
It really depends on the class of goods. I enjoy high-quality audio, so I made the effort to do some research and spent decent money on a good sound card and two high-end headphones. End of story; it's unlikely that I'll need a replacement for those things for a decade. Thankfully there are tons of good products in the area and it makes little sense to sweat it once you're found a dozen good choices.
As far as furniture goes; it really depends on how obsessive you are on design and interior decoration. There's a healthy compromise to strike between utility, cost, and aesthetics, and my experience is that once you have a solid idea for your interior decoration (which is not easy, mind you) you're probably good to go; minor blemished and defects should not detract from your satisfaction.
In kitchenware, solid and cheap is a good combination. Apart from knives, the most important thing is build quality, but a cheap cast-iron pan is good as long as you're not burning stuff.
I'm 39 now, but I started this path late. Most of my life was spent going from country to country, with all of my possessions able to fit in two bags. I was also reduced to the shirt on my back a couple of times in business ventures gone wrong.
What I've discovered is that there aren't actually that many things to get. A bed, a dresser, a kitchen table and chairs, a couch, a coffee table, a TV, stand, amp and some speakers, living room chairs, a desk + chair, a bookshelf.
After that it's outfitting the kitchen and bathroom, clothing, and some art for the walls.
That covers the necessities. Beyond that it's just supporting your hobbies & things you do for fun.
The other 2% are things like a car (I just use Zipcar for now), some of the more high tech gizmos for the kitchen, more camping gear, good pots & pans once I get better at cooking - Stuff I can live without, so I'm content to wait for a really great deal before buying. The best part is finding something you know you'll need eventually (because it's on your list), but it's available now at a deep discount because some shopkeeper is desperate to be rid of it.
That's actually the key: having the ability to be patient. For about a year, I kept a list of everything I wanted to buy, including links to what were the best in each area. Then I'd keep an eye out for sales, check out garage sales & flea markets, go to second hand stores, surplus stores, etc. I tried to not buy unless I could get it for 70-80% off the new price or better, while still of acceptable quality. For brand new stuff over $50, I'd usually only buy at 40% off or better. To completely furnish my place with stuff I'll never replace, I spent about $2000 over the course of a year. Some stuff was free. Some stuff was damn near free (my solid oak desk was $20) Some stuff I ended up paying a fair price for, because I would accept no substitute. My biggest purchase was a 50" TV for $500, which I'll keep for the next 10 years or so unless it actually breaks. My older, 8 year old 32" TV I now use as an external monitor. It still works like the day I bought it, but then again I also researched the shit out of it before buying (Sharp Aquos, on sale 40% off).
The best part about buy-it-for-life stuff is that a used item is just as good as a new.
The research is slow and tedious. The key is to not be in a hurry. There is a finite amount of stuff to get, and you can probably survive without it for awhile.
The generalizations in this paper based on cherry-picked studies aren't very convincing. How people react in contrived situations, and how people live their life are quite a bit different. The word "suggest" appears 17 times in this article, where the author extrapolates from the findings of a single research experiment. It reads more like an opinion piece than anything scientific, and I'm certainly not going to change my habits from what's written in it.
One of the greatest books IMHO which gives very practical advice how to achieve and maintain happiness in life is Raymond Hull's old classic (1969) "How to get what you want". Interestingly enough (and although written by a Canadian) it is quite well known in Europe, not so much in the US: http://www.barnesandnoble.com/w/how-to-get-what-you-want-ray... the comment section on amazon is interesting to read as well: http://www.amazon.com/dp/0671783270/
Somerset Maugham has a nice quote in Of Human Bondage: "Money is like a sixth sense without which you cannot make a complete use of the other five." Although he does have a point I don't quite agree with that POV.
What I think money should be viewed as (we're talking about a good amount of money here, let's say 2-3x your living expenses) a super power. Like all super powers it can be used for good or evil (or, more probably, wasted). You can do a lot of good with a relatively small amount of money. You really cannot do this or think about such things if you don't know where your next lunch is coming from or if you will be able to afford to send your kids to college.
Everything else being equal, of course I'd be happier to have more money.
But all things aren't equal, and many of the things one is supposed to spend one's time on in order to make maximal money are things I am unhappy spending my time on.
(That having been said, the article is about getting the best happiness bang from whatever bucks you do have, which I have no argument with. I suppose I'm just saying, in many cases, the optimal happiness I could purchase with some money stream is the free time "purchased" by not working for it in the first place.)
I poor all the money I can into my future self. That actually does make me happy. I don't see lifestyle inflation as a good idea especially for young people.
Me too. I figure, if I can get some shit done in my 20s, I can have a pretty sweet time in my 30s, running a small company and spending time with my future family rather than working an unfulfilling 9 to 5 and trying to make up for it by partying hard on the weekends.
If you are not optimizing for personal happiness but for something else, then the fact that it doesn't make you happy doesn't mean you aren't spending it right.
"It's a way to blame people for their problems."
Why does blame have to be part of it? Or are you saying that people who use that phrase are implying that people are to blame for what problems they have because life itself is fair?
Yeah, I'm saying that people who say "life is fair" usually haven't had horrible problems like birth defects or having their house burn down. It's also a way for people who have had incredibly good luck to rationalize why they have it so easy while other people struggle.
“Money doesn’t just buy you a better life — better food, better cars, better pussy — it also makes you a better person. You can give generously to the church of your choice or the political party. You can save the fucking spotted owl with money.”
In this period of time, I have been able to:
- Quit my founder position at that startup (thus avoiding potentially being tied to vesting or retention clauses, in case of an acquisition)
- Own my house, and invest in a few other apartments, which turned into a little side business with great margins
- Start a new company investing my own money, and not requiring a salary
- Travel and live in a few different cities as I build the new startup
- Completely forget about the price tag when buying small-ticket things: a taxi ride, asking for an extra plate, an occasional flight, paying a round of drinks
It's not as it money made me happy by spending it, but it did remove a lot of the constraints I had before. It's made me feel like the default state would be to be carefree and happy, and as long as you can keep the worries and the stress away, everything will go alright.
As a new worry, I now spend a lot of time thinking about how to reinvest it wisely and continue living like this. It's not overwhelming, and it's not very different than what doing my finances felt like before, but doing it a larger scale adds a new dimension to it.