Saturday, 20 October 2012

What is Happiness and Can I Afford It?

As this post seems to be quite popular, I've written another related post you can find here:
More Thoughts About Money and Happiness

What is Happiness.

It seems to be an age old mystery doesn't it?

There are plenty of people who have achieved this of course, and maybe you know some people yourself who seem to be genuinely happy most of the time. So what's their secret? And why is it such a secret??

Does being wealthy make you happy?

Is there something we've all been missing all these years??

Surely the human race had this problem cracked a very long time ago???

Personally, I think we might be looking at it from the wrong point of view here. There have been times when I have been overjoyed in my life, but the feeling doesn't last. It's a hormonal response, so it won't. It's not meant to. Perhaps a more realistic achievement would be "contentment", as this does appear to be something that you can actually have over the long term.

So what is contentment? Well, to answer that it might be easier to start off looking at what it isn't. Stress and worry for starters. Most of us suffer this at some point in life, and those of us stuck in the middle of it would often give an arm or a leg just to be rid of it.
And what's the biggest cause of stress? Yup, you got it, money, or the lack thereof.
So, the answer is to have more wealth then is it? Sort of. You don't have to be rich to be more wealthy, and plenty of people with big salaries and flashy lifestyles still suffer from the same money related stress. The stress of not having enough money to pay all their bills and fund their chosen lifestyle as well.

So the answer to eradicating money related stress is simple maths. You need one or both of the following:
  1. Less money going out of your bank account
  2. More money coming in to your bank account
Or to put it another way:
"Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery." (from David Copperfield by Charles Dickens)
So even if you're not well off and can't do no.2, you can still always do no.1. In fact, I would say no.1 is the more important, as learning to live on less over the long term provides you with continual savings, especially if you can still keep to such a budget when you do come into a bit of money, or a better paid job.

It's at this point, perhaps we should look at the rich and see if they really are much happy than us "average joe's".

My wife would like a nice, big house, and we know a few people with ridiculously big houses. In fact, we nearly bought a stately hall ourselves once, (it was very, very run down and going for a song, but I didn't think we'd ever have enough resources to do it up). Anyway, these big houses, although they are impressive, frequently bring problems of their own. The owners constantly worry about their heating bills (these houses always seem to be freezing cold), and then there's also maintenance, and gardening, (which I hate). If only they had a bit more money! ;) It also turns out that they often don't use the whole house either!

I wonder what it's like living at Buckingham Palace. Do you think the Queen has ever seen all the rooms in her massive house? It seems that having all that space is probably a bit redundant. Did you know, she has over 200 bedrooms?

Then there's cars. As a total petrolhead (see I have experienced all sorts of different cars, including those at the very top, like Ferrari's, Lambo's, Astons, McLarens etc. They're great machines, and when you take into account development costs, research and rarity, I can see why they cost so much. Perhaps if they sold a lot more of them, they'd be much more affordable. For instance, until recently Ferrari deliberately limited their annual sales to just a few thousand cars, (compare that with Ford who probably spend just as much developing their cars).

But if it was my money, suddenly I can't really see myself spending £150,000 on just a car. Yes, they are nice to look at, and nice to sit in, but are they really that "super"?  I've had a Renault with leather seats and air con that was nice to sit in. And they're not actually that quick away from the drag strip - Round a track, or on a decent country road, most lowly kit cars can easily keep up with them and are far more visceral and exciting to drive too. If driving is your thing, then £20,000 can easily get you something spectacularly quick.

And then there's lifestyle.

My wife used to be PA for a very rich man indeed who thought nothing of spending £200 per glass of champagne for him and his own wife when they went out. Don't get me wrong, champagne is a nice drink, but frankly, a decent beer will taste just as good, and will last longer because they're served in pints. And really, just how good does a £200 drink taste? And how many houses can you live in at the same time? Or how many cars can you drive at once?

A lot of conspicuous wealth is just nothing more than showing off by people who think they are better, but money doesn't buy you taste (watch MTV cribs), or give you new skills or add to your personality in any way whatsoever, and it certainly doesn't make you a better person. Rich people still have arguments, relationship problems and get divorced from each other.

Think back to the moments in your life that made you happiest. For me, one of those was the day my son was born. At that point I didn't need a mansion, or a fast car, or some flashy jewellery. And he still makes me happy every day when I get home from the office and see his face light up because he's pleased to see me.

Given all this, having a lot of money doesn't appear to make you significantly happier than having enough money, i.e. enough to get by comfortably and enjoy life. So having enough money seems to be the way to reach financial contentedness, which is fortunate, because this is something most average people can achieve with only a change in attitude to their finances.

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