3550: More Money, Less Happiness: When Money Makes You Miserable by Michael Laurence with Get Rich Slowly

[00:00:00] Before we start, please check out our new podcast, Good Sleep. Have you ever noticed how a calm mind can really set the stage for a good night's sleep? That's the idea behind our new podcast, Good Sleep. Greg, our host from Optimal Relationships Daily, is here to help ease you into a peaceful night's rest with some positive affirmations. And these affirmations aren't just comforting, they can help ease anxiety and nurture positive thoughts, setting you up for true good sleep.

[00:00:25] So press play on Good Sleep tonight because a good tomorrow starts with a good night's sleep. Just search for Good Sleep in your podcast app and be sure to pick the one from Optimal Living Daily. This is Optimal Living Daily. More Money, Less Happiness, When Money Makes You Miserable by Michael Laurence with GetRichSlowly.org and I'm Justin Malik.

[00:00:49] Welcome back or welcome for the first time if you're new here. This is where I read an article, sometimes two, every day of the year to help both you and me have a little more happiness, inspiration and motivation in our day. So with that, let's get right to it as we optimize your life. More Money, Less Happiness, When Money Makes You Miserable by Michael Laurence with GetRichSlowly.org.

[00:01:17] Money, the conventional wisdom says, doesn't buy happiness. Modern psychology seems to back this up with studies suggesting that beyond an income of $75,000, money doesn't make you any happier. This conclusion is simultaneously obvious and counterintuitive. As an abstract principle, most of us acknowledge that money doesn't buy happiness, but at the same time, we all want more of something material.

[00:01:45] A nicer house, nicer vacations, the ability to live in a certain neighborhood or eat at fancier restaurants that we think would make us happier. So we're left with a conundrum, or rather a series of conundrums. Does income in excess of $75,000 make us happier? And if not, why not? When money makes you happier.

[00:02:09] In answer to the first question, I believe that all else equal, and as we'll see in a moment, this is a huge qualifier as things are rarely equal, more money generally makes you happier. To be clear, money won't solve every problem. If you're lonely or bitter or angry, for instance, more money won't make you any happier. But just because money doesn't solve every problem, doesn't mean that money won't solve any problems. Money can make things easier or better.

[00:02:38] With more money, you can build a nest egg, pay off your house or car, go on more vacations, have more kids, be a stay-at-home parent, eat better food, and retire early. With more money, you can do any number of other things that people enjoy and that make them happier. And if you're a victim of systemic poverty, more money can change your world.

[00:03:02] As much as we pay lip service to the idea of money not making us happy, it often does, and it's okay to admit this. It doesn't make us materialistic or greedy to want retirement savings, a nicer home, a paid-off car, or a trip to Europe. When money makes you miserable. Assuming that you buy the premise that, in theory, more money should generally make us happier,

[00:03:27] it raises the question of why, in practice, income beyond $75,000 annually doesn't make us any happier. I think the explanation for this seemingly irreconcilable conflict is that most people spend the extra income poorly. Most people use money ways that make them less happy. Number one, their job makes them miserable. People who earn a lot of money often assume that they're paid well because of their intelligence and skills,

[00:03:55] and that is undoubtedly often the case. But often they're paid well in whole or in part because they've accepted a very difficult, demanding job that pays well precisely because it makes people unhappy. A job with long hours, lots of stress, lots of travel, and time away from family and friends will generally pay well, but also significantly impair happiness. It shouldn't then be surprising that people with high incomes are often unhappy.

[00:04:23] The high income and unhappiness have the exact same origins. Number two, they spend money on things that bring them no happiness. People are generally conformists. Drive through a rich neighborhood and you'll see people dress similarly, driving similar cars, and going on similar vacations. This isn't just a happy coincidence that all these kindred spirits centredipitously found each other and formed a happy community. Rather, people succumb to keeping up with the Joneses and continually buy stuff,

[00:04:53] not because they enjoy it, but because they'd be embarrassed not to have it. To a large extent, individuals let their peers dictate how they spend their time and money. Living on somebody else's terms, living somebody else's life, is not a recipe for happiness. And if you do it, extra money won't make you any happier. You'll be spending it how other people want you to, not how you want to. And number three, they take on more debt.

[00:05:20] When people begin to earn more money, they generally upgrade their lifestyle, buy a nicer home and buy a nicer car. The problem is they don't pay cash for these things. Rather, they use their new higher income as a means to borrow more money. Far from providing financial security, the extra income often makes their financial position more precarious. Instead of using the extra income to buy freedom and peace of mind, which would make them happier,

[00:05:47] they incur more debt, which makes them more anxious than ever, with the added fear that if they lose their job, they'll be humiliated at having to ratchet back their newly lavish lifestyle. Extra money won't make you happy if it tethers you to a heavily indebted lifestyle. The bottom line. The lesson here is simple. If you come into more money, it can make you happier, provided that you use it in a way that provides you security,

[00:06:14] freedom, and sincere pleasure, not merely conformist consumption. Money, in short, is neutral. It's a tool that can make you happier or less happy, depending on how you choose to spend it. You just listened to the post titled, More Money, Less Happiness, When Money Makes You Miserable, by Michael Lawrence with GetRichSlowly.org. And I'll be right back with my commentary.

[00:06:43] Thank you to Michael, a guest writer on Get Rich Slowly. That study about happiness not increasing beyond $75,000 of income is something that's come up on this show before. I sometimes mention my personal favorite book on money. It's called Your Money or Your Life. And it talks about this very thing. I've always found it fascinating. It's also talked about frequently over on Optimal Finance Daily. So if you like this kind of content, definitely check out that show too. But what I really appreciate about this article

[00:07:11] is that it doesn't just stop at saying money doesn't buy happiness. It actually digs into why that might be the case for many people. It's a good point that often those high-paying jobs come with a lot of extra stress or extra long hours and so on. The money is good, but the lifestyle that comes with it can be pretty brutal. And the part about debt is huge. I've been tracking every penny in and out of my life since 2010.

[00:07:38] And one thing I've noticed is how easy it is to let your lifestyle expand to match your income or even exceed it. Getting a raise and immediately buying a more expensive car or house on credit is such a common pattern, but it just leads to more financial stress, not less. So maybe the next time we're considering a big purchase or a career move for more money, we can ask ourselves, will this actually make me happier or am I just doing what I think I'm supposed to do?

[00:08:07] Hopefully these questions and this article helps. And with that, have a great rest of your day and I'll see you tomorrow where your optimal life awaits.