What is the relationship between money and happiness
What is the goal of life? How do we find happiness and what role does money play in our life. What are the goals of our life and what are we really chasing. For most people, it comes down to two words Money and Fame. All success can be defined in terms of how much money and fame we have.
Let us put those assumptions to test today! Are money and fame truly that important? What role do they play in our life? How much do we really need to have a fulfilling life?
What can you take with you
What can we take with us after we die? Will we leave something behind? What does chasing money and happiness do for us after we are gone?
Some people argue that it is important to earn wealth so that after we are gone we can leave a legacy. The generations that follow will remember us for the wealth we could accumulate.
Some people say that we need to live a life where we can acquire fame. Humans are social beings. The need for approval is after all ingrained in our DNA.
Thus, almost everyone says that to fight the mortality of our existence we need fame and fortune. It will not help us from our mortality however; it will be something that we can be remembered by.
This entire chain of thought arises from our need for permanence. We chase money and happiness in the hopes of achieving that permanence.
Happiness on conditions
All great philosophers tell us that true happiness lies within. That, if we can just look inside we will find that we do not need anything outside of us to be happy.
We do not live our life that way though. We decide the life based on the things and goals we want to achieve.
The moment we want something, what are we really doing? We are effectively saying to ourselves that our happiness lies when we can achieve that milestone in our life.
This way happiness becomes elusive. Always hiding behind the next thing. We keep running on an endless path to someday achieve enough money and happiness.
How much money do we need to be happy?
Perhaps the defining study on the subject that comes to mind is one done by Daniel Kahneman and Angus Deaton.
Their research article titled High income improves evaluation of life but not emotional well-being is something I recommend all of you to read.
The findings said that money is important for a person to be happy however after a certain level the increase in the money you earn per year doesn’t really have any change in the person’s happiness.
“In the present study, we confirm the contribution of higher income to improving individuals’ life evaluation, even among those who are already well off. However, we also find that the effects of income on the emotional dimension of well-being satiate fully at an annual income of ~$75,000, a result that is, of course, independent of whether dollars or log dollars are used as a measure of income. “-Daniel Kahneman and Angus Deaton
There are plenty of caveats to the study. The biggest of which is it is a decade old by now. However, we can draw at least a few Inferences from it.
Chasing money and happiness, Rat Race
In his book Rich Dad Poor Dad, Robert Kiyosaki explains the Rat race to us. He says that by working in a job, being self-employed, or even owning a small business, you keep chasing your monthly goals to put food on the table.
As your situation improves, so do your standard of living and that brings with it more fixed costs. It is a cycle of how you keep earning more but the situation stays the same.
Your life continues as a run from one paycheck to the next with no end goal in sight other than retirement at 60.
“Most people have a price. And they have a price because of human emotions named fear and greed. First, the fear of being without money motivates us to work hard, and then once we get that paycheck, greed or desire starts us thinking about all the wonderful things money can buy. A pattern is then set: get up, go to work, pay bills, get up, go to work, pay bills… Their lives are then run forever by two emotions, fear and greed. Offer them more money, and they continue the cycle by also increasing their spending. This is what I call the Rat Race.”-Robert T. Kiyosaki
Need for Fame
Almost all the need for fame comes from our want of being remembered. However, can you know how you will be remembered? What purpose does it serve if you can’t even experience it?
Wanting something after you die while you can only want it as you live. Isn’t there a pointlessness to it all? And if we are remembered, it will be for the things we do now. So isn’t the way we live our life right now what is of supreme importance?
You might want to change the world. That might be a way to certainly be remembered for a long time. But do we really know what changing the world means if, as a species, we do not know where we are headed collectively?
Even if you do manage to be influential and your work becomes incredibly important for the species moving forward. Maybe then you think, you would be remembered for a long time.
We only think of Newton in relation to his laws of motion and his work on Gravity. We think of Tesla in terms of his work on electricity and Plato for the work in philosophy. Alexander the great for the way he conquered nations. So if you think about it, isn’t it the work that is truly being remembered?
Let’s assume that you could not change the world. Moreover, even for the things you were really driven towards, you would not be remembered for more than a few generations.
No matter how long you are remembered after you are gone, it makes no difference to you now. Thus what is truly important is what you do right this second.
Do you own the things you buy?
Everything you end up buying comes with a cost. That cost is not just limited to the price you buy it for.
When you buy something you have to take care of it. The pleasure you feel after you get it is fleeting at best.
“Advertising has us chasing cars and clothes, working jobs we hate so we can buy shit we don’t need.”-Chuck Palahniuk, Fight Club
Say you buy a house. You have to maintain it, pay tax on it, clean it, take care of security, take care of bills electricity and water. With all that, you now have to make decisions in your business or job around it as well.
Say now you make more money and go buy a luxury car. Install a pool in your house. Do you think it will not come with some baggage too?
Now instead of thinking in terms of what you can gain all your decisions are based around all you can not lose. Your mindset shifts to a risk-averse short term mindset.
Your decisions are guided by the things you thought you owned. As if the things are owning you.
“You buy furniture. You tell yourself, this is the last sofa I will ever need in my life. Buy the sofa, then for a couple years you’re satisfied that no matter what goes wrong, at least you’ve got your sofa issue handled. Then the right set of dishes. Then the perfect bed. The drapes. The rug. Then you’re trapped in your lovely nest, and the things you used to own, now they own you.”Chuck Palahniuk, Fight Club
True happiness comes from skill and discipline
The real happiness in your life comes from the mastery of a skill or discipline. When you do that you feel involved completely in the present moment. One with the flow.
You can’t live forever and you have to find something that you can devote your life to. It becomes a mastery of the self as you master a skill. That is the only way to find true happiness.
You can read about it in our blog post on Wu Wei. It talks about how can we become one with the things that we do. It is the art of masterful passivity.
Money and happiness, Coming Full Circle
After reading all that let’s come back to the Money and happiness study. It shows us how we need a certain amount of money to meet the necessities of life.
The moment we can fulfill those necessities we do not have to work for more and more money. Instead, what we should look towards is what our purpose for being and true callings are.
The problem in society is that after we meet our basic needs we start chasing our wants. Things that we thought were luxuries, which we could not afford before.
By chasing those things, we start working harder to obtain them. It is like, we can be free but we still wish to work for someone else. A smarter boss. One that cannot force you based on your needs but entice you based on your wants.
If you do not need a luxurious car like Lamborghini or Bugatti but are working really hard to afford one. Aren’t you, in a way, working hard for the people that own Volkswagen Group?
This week try to realize how you Identify yourself. Is your identity based around the things that you own or what other people think of you?
The things that you want to obtain, would you still get them if you did not care about what other people thought about you? Or are the things you buy just a means to build social proof.
Say you made a million bucks every year passively. What would you have done in such a scenario? Can you do something related to that now? If you want to know more about what true callings might be for you, you can read our free guide called The Perfect Beginning.
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We thank you for reading our blog and wish you all a very Happy Holi. Have a good day and a good life.