There's some questions that never fail to inspire heated discussion as they pass down through the ages. Does money buy happiness? What is the meaning of life? Why does Sinead O'Connor own a blow dryer? (Name that reference!) We may never know the answers to the latter two inquiries, but the first always elicits one of two responses: either a "yes" or "no." It seems like many are on the "no" boat, especially those of us who don't have a lot of money to begin with. It's as if by answering "no," we somehow feel emotionally richer, and above someone who would even think to answer "yes." There's solace in at least feeling "rich" in that way.
But the problem with the "no" response is that it's usually anchored to some strange belief that happiness can be found in the material possessions in our lives. Why have we been so conditioned to believe that a new car, a Gucci handbag, or 62-inch flat screen TV will somehow magically make us happier? Or, for that matter, when did we begin attributing inherent "happiness" to the more expensive, out-of-reach items in the marketplace? Is it simply because we can't have them, or is it that we covet the distraction that comes with them? One of my best friends believes that money doesn't buy happiness, but it buys distraction. According to him, "you can distract yourself from your unhappiness with 'toys' that keep you numb. Happiness is internal, not external."
But when I'm asked this ever-pervading question within the finance world, I respond with a confident "yes!" I do believe money buys happiness, but happiness to me is not the material possessions in my life, it's the time my money buys (also known as my personal freedom). For example, take one of my favorite hobbies: traveling. Happiness is not the airplane ticket itself, it's the days, weeks, or months my money affords me to use traveling in the first place.
Happiness in a handbag, for instance, is fleeting ... it's a distraction that doesn't sustain itself. Sure, it's fun and exciting to buy nice things for yourself, but I would say that the happiness people affix to these and other big purchases, such as Porsches and iPhones, isn't so much happiness as it is the distracting excitement of attaining something elite and exclusive. Better known as the "rush," this feeling quickly subsides the longer you've owned the item.
A recent article I read in the September 2008 issue of SmartMoney (the financial magazine owned by The Wall Street Journal) reaffirmed my belief that money does buy happiness. According to the magazine, "the rich really are different." Harrison Group vice chairman Jim Taylor said "there's no group in America that's happier than the wealthy," and, said the magazine, about 70% of millionaires say that money has "created" more happiness for them. A new Wharton School of Business study quoted that a higher income correlates with higher ratings in life satisfaction. But, the magazine said, "it's not necessarily the Bentley or Manolo Blahniks that lead to bliss."
"It's the freedom that money buys," said one coauthor of the study, which also found that rates of depression are lower among the wealthy. And, Rand Corporation senior labor economist James Smith also said that the rich tend to be healthier than the rest of the population -- health and happiness, he said, are as closely correlated as wealth and happiness.
With that said, there are many wealthy people who have many fun toys, but is it the toys that bring them happiness, or is it the time they've earned to play with said toys? To answer the over-arching question, you have to ask yourself what happiness means to you. Is it lavish wardrobes, the newest iPod, or anything else you can hand over your credit card for? Or is it spending your time and life the way you see fit, i.e., hanging out with your family, traveling, and perhaps listening to music via your wonderful iPod?
I'd love to own as many shoes as Imelda Marcos, but what's the point of owning excessive amounts of footwear if I never have the time to enjoy them, especially with the people I care about?
Do you think money buys happiness? More specifically, what is happiness to you?