The reason we seek retirement is because we wish to be happy. If we were all happy with our jobs, we would work forever. So it stands to reason, you are saving money on this quest for unbridled happiness. Which begs the ultimate question…
Can money buy happiness?
Not only can money buy you happiness, scientific studies have shown that the level of happiness one reports feeling is directly linked to the amount of money they have.
A 2010 study from Princeton University’ determined that lower a person’s annual income falls below $75,000, the unhappier they feel. But no matter how much more than $75,000 people make, they don’t report any greater degree of happiness.
This study was updated recently by Purdue Universirty (as reported here by USA Today). Though the dollar amount changed ($105,000) the results remained the same. It appears money actually does buy happiness. But how?
How does money buy happiness?
I’ll bet when you look back on your childhood, all you remember is happy times. You would have to look far and wide to find someone who was not a happy child. Why is that?
In childhood we have an innocent blissful ignorance of the world around us. When we are a child, we are free to imagine whatever we want. We dream, we play and there are no limitations. We are truly free as children.
Then we grow up the cruel world rears its ugly head. As we get older, we have needs and responsibilities that can no longer be fulfilled by our parents. The majority of our responsibilities will cost us money. In order to earn said money, we need to work which means we are giving up our time and before you know it, that blissful ignorant freedom you had as a child is gone.
Somewhere along the way we stop playing and enjoying. We lose the ability to stop and smell the roses. As long as I have been an adult I have had this longing to be like I was when I was a child. Which is why I am so driven to achieve financial independence.
Having enough money to cover your basic needs goes a long way to eliminate many of the factors that lead to unhappiness as you can see below.
Reasons why having a surplus of money can lead to happiness
- Lower stress and worry
- Eliminate financial anxiety
- Freedom from being told what to do every day
- Control over your time
- More incredible experiences (ex. travel, see the world)
- The ability to be generous with your time and money
#1 Lower Stress and worry
Having money means not having to worry that your basic needs are met. We all need a certain level of security in knowing that we will not starve or freeze to death. I have had myself plenty of sleepless nights wondering if I was going to have enough to pay the rent this month. I have lived on pop tarts for days at a time while waiting for my next paycheck, I have used spare coins to put gas in my car so I could get to work that day. These are shitty feelings and I wouldn’t wish them on anyone.
If you can not even support your basic needs of food and shelter, or you need to constantly worry and stress about keeping the hat on, etc.. happiness will surely pass you by. It is hard to think happy thoughts when you haven’t eaten, there is no food in the house (if you are lucky enough to have one) and you don’t get paid for another 2 days.
They say money cant buy happiness, but money buys food and shelter and heat and water and clothes, and all of the things you need just to go about your day. Without these things you would be pretty damn unhappy.
#2. Eliminate Financial Anxiety
Similar to our last reason of stress and worry is financial anxiety. Perhaps you are not starving or freezing but you struggle to make ends meet. There is little to nothing left over at the end of each month and maybe you are even pushing off some bills just to pay the more urgent ones.
If you have ever intentionally paid a bill late because you needed that money to pay a more important bill, you know what I mean. If you have ever had to choose between paying a credit card bill late or keeping the electricity on, you know what I mean. And if you ever wrote a check knowing full well it would bounce but you wrote it anyway, you know what I mean.
Somewhere along the way as matured in my ability to handle my own finances, I realized that I was working too damn hard to feel anxiety over just paying the bills. I realized, I wasn’t going to suddenly be a millionaire, but I also realized that this stuff became a whole lot easier as I started earning more money. My stress levels went down and my happiness went up.
Instead of spending Sunday afternoon at home with a stack of bills and a calculator trying to make magic out of math, I could go to the park with friends and not have to worry about it. Through smart spending and hard work, I was now in control of my money instead of my money controlling me.
#3. Freedom from being told what to do every day
If you enjoy going to work and being told by someone else what to do, what to wear, how to behave, when to eat, and when you can go home, then by all means, continue to work until you die. You are happy now and don’t need to do anything to change.
Most of us, even if we enjoy the work we are doing, do not like having to answer to our boss. We don’t appreciate the structure that exists in most work places that inhibits our ability to effectively do our jobs.
Being financially independent gives you the freedom to say, “I don’t need to do this anymore”. You gain the power in the employer/employee relationship because you have the ability to leave at any moment you wish. I can tell you, after working for the same company for 25 years, that is a freedom you can not put a price tag on!
#4 Control over your time
Time is the one irreplaceable commodity common to all of us. We all have it, and we are all limited by it. Once it is gone, it can not be replaced. Wouldn’t you like to be the one who decided how you will spend it?
Money allows you to do that. Provided you use it the right way. If you go out and spend all of your money on useless dumb shit, you will have no more control over your time. But put your money to work for you and you can replace the income stream you have been spending your time working for at one of them jobs. Then you can eliminate your job and regain control over the ridiculous amount of time you were spending working.
Remember my analogy earlier of when you were a kid? That feeling of freedom you would get playing on the weekends. And then it ended on Sunday night as the sun quickly faded away and you knew you would soon be back in school? Imagine if every day was a weekend. You could decide how to spend your time instead of being obligated to report somewhere you don’t want to just so you can earn enough money to have to go back again tomorrow, and the next day and … agghhhh it is driving me mad just thinking about it.
#5 More incredible experiences
The world is a beautiful place. If you take the time to look around. I have been lucky enough to have some amazing experiences in my life. I’ve seen the Vatican and been inside the Colosseum. I have been to the glaciers of Alaska, I have swam in the crystal clear waters of the Greek isles and seen the black sand beaches of Santorini, I have kissed the blarney stone in Ireland. I have gazed out over the grand canyon in awe and climbed Red Rock Canyon in Nevada. I have walked through Trafalgar Square London and climbed the stairs of the Chichen Itza in Mexico and climbed to the top of the tomb of the unknown soldier in Rome. I’ve eaten Gelato at night in front of the Trevi Fountain and watched in amazement at the powerful rapids of Niagra Falls. I can tell you, all of these experiences were incredible, and none of them were free.
I do not tell you about my incredible travels to impress you but rather to impress upon you that if you desire some of these incredible experiences for yourself, having money will make it much easier to accomplish.
Maybe you have absolutely no interest in visiting Rome but you would be perfectly happy going to the movies every afternoon. You can’t do this if you don’t have the time or the money.
Whatever your chosen experiences are, you will need money to experience them and you will need enough money to buy your freedom to continue to have these awesome experiences.
#6. The ability to be generous with your time and money
Giving and helping others offer some of the most rewarding experiences possible. However, you can’t give money to charity of you don’t have any and you can’t spend time helping others if you are always at work
Having a surplus of money will offer you the opportunity to be more charitable with your time and with your money. Imagine how much time you could spend being charitable if you did not have to work 40-50 hours a week.
However you choose to spend your time or money is up to you. The important thing is that you achieve financial independence so you can have the ability to buy your happiness and live the life you choose.
Please be sure to check out the resources page to see the tools I use to remain financially independent and in turn buy my happiness