Monday, 10 December 2012

More About Money and Happiness

After writing a post recently called What is Happiness and Can I Afford It? I had a few more thoughts about how money and happiness (or contentedness) are inter-related.

There's the old saying that money doesn't buy you happiness, which can be further extended: but it does make being miserable more comfortable.
On the other hand, let's not forget that wealthy people are still the same as the rest of us. Their hormones work in the same way, and so do their nerve endings. They still have the same feelings. 

It's all a question of your perspective and attitude. For example:

I read a very clever post here about (amongst other things), a guy who crashed his porsche supercar. He felt that he just couldn't catch a break, and was so upset he sat down and started crying.
I know what you're thinking - I didn't have much sympathy either. It illustrates 2 things though.
Firstly, the obvious one, there are times when we just don't appreciate exactly how well off we are. Secondly, (and most of us are guilty of this), we always look upwards at those who have more and wish we could be like them.

Remember when you didn't want your meal, and your Mum would say, "There's plenty of starving children in Africa"? Well, perhaps we should take a more adult view at how we look at our own lives. We should be thankful for what we have, and thankful for being given the talents to add to that, because, if you're reading this blog, (and others like it), then you almost certainly do have those talents.

Going back to looking upward though...

There's nothing wrong with wanting to better ourselves, and it's also good to make ourselves more secure, but we must also remember that there's a clear difference between "wants" and "needs".

That clarity though, sometimes things get a little muddy. Sometimes a little bit of refocusing is required, so it's good to think about something called the "Heirarchy of Needs."

Now I have simplified this somewhat, but everyone will find themselves somewhere on this pyramid.

On the ground level, we have such things as food, shelter, warmth and so on, the basic things you need for human survival. If you don't have these, you will find that you both want AND need them. You won't want things like your own Rolls Royce or some other luxury unless you have at least the basics. Without them, a warm bed and a hot meal are far more attractive than say, a swimming pool.

Once you have these, you find you want the next level up. The next level being security. You want to feel safe, and don't want to be homeless or hungry.

Next level, you want to own your own home, have a nice car etc.

You'll notice, as you get further up the pyramid, your "needs" and "wants" change depending on what you already have. What we must not forget though, is that we have everything below us on the pyramid.

Finally, at the top we have financial independence. The nearest thing to hapiness that money can buy you is financial independence. If you have every "thing" you need, and the freedom not to have to do a cr*p job to earn a wage to live on, then money can't do anything more to improve your life further. Take Bill Gates as an example. One of the wealthiest men there is. He readily acknowledges that after you've earned a certain amount of money, it ceases to matter. "Hamburgers taste just the same," he says.

Financial independence is also something that the vast majority of us can eventually achieve. Most people don't get there until retirment age when they give up work and start to draw their pension BUT you can get there sooner if you really put your mind to it, basically with an adjustment of attitude.

If you cut out all the superfluous nonsense in your life, like buying a coffee on the way in to work every morning, and put the money saved into an investment (such as a pension) or something else that gives you a return, (stocks, savings etc.) then at some point, you will have built up a big enough cushion of money, that the income it generates will outstrip your wages. You'll then be able to stop working and do anything you like with your time.

This probably sounds quite austere, but it's simply a question of balance. How much luxury are you willing to trade now, for a different future?

I'm not suggesting you give up ALL the little niceties in life. As I said, it's a balance. If I was told that by giving up beer completely for the next 10 years I could retire at the end of those 10 years, I would turn you down and work longer. Without the occasional beer or two I don't think life is worth living, but then perhaps you're different?

The balance does need thinking about though, simply to ensure that you're on the right side of it. After all, no one wants to have to work beyond their retirement age do they?


  1. So many people look forward to retirement because they think they will be happier. I say, why not be happy and enjoy what you do to bring in money.

    Using your beer example, which I love too btw, why would I give up something I enjoy (beer) in order to quit doing something else I enjoy (my job) sooner?

  2. It's a good point Matt, but many of us are not so lucky in our day jobs. Personally, I take the attitude that it certainly helps if you look for something to enjoy about the job you're in, and I'm quite lucky that I blog for work too. At some point I'm planning on going self employed again, and of course that wil be fun, but I think the vast majority of people go through this daily drudge simply for a wage to fund the rest of their lives, and it's such a shame if you spend 8 or 9 hours a day somewhere you don't want to be. :/

  3. Great redo of maslow's hierarchy of needs. I've always felt that more money alone doesn't make you happy, what you do with it does. There are a lot of people who make more money that me, but they don't have the same plans or security I have, and I perceive myself to be in a better position.

    1. When you step back and look at things like that, what you say seems like common sense, except it's not so common! I do remember I just didn't think like that though back in the day. It was like a kind of fog through my mind and I think many people never seem to take a minute to just stand back and admire the view

  4. It is all about balance indeed. I too wouldn't sacrifice my beer although there are area that I could be considered extremely frugal.

    1. Hi Pauline! Thanks for stopping by, I notice on your blog you have quite a nice balance going on too!


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