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Money & Happiness

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The usual stuff we've all seen before,

http://www.michaelpage.co.uk/minisite/salary-vs-happiness/

Implies that happiness levels start to flatten out above a certain income, giving rise to the meme that "money can't buy happiness, but lack of money can make you unhappy".

I'm not convinced, obviously an extra £1,000 a year means a lot more to someone on £10,000 a year than it would to someone on £100,000 a year. Therefore the graph should be plotted on a log scale to take that into account, and when you do so it seems happiness and money are indeed related, in fact happiness rises pretty much in a straight line each time you get an additional fixed percentage of income.

It's a depressing conclusion, but none the less I'm convinced it's correct. The solutions seem to be,

-have a lot of money and keep getting more.

-share the money equally and all be tepidly content together, taking additional satisfaction that you're not chronically unhappy and are unlikely to become so.

-train yourself to break the money/happiness link, which despite all the platitudes is probably extremely difficult and certainly doesn't come naturally.

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Beyond a certain sum that buys you the basics, the money / happiness link becomes a moot point, and what takes on more significance is the exposure to marketing / lifestyle aspirations / comparisons with your fellow man.

We live in a country where it is now impossible to avoid almost hourly self-analysis with the rest of the population - whether it’s a billboard advert, Facebook, TV commercial, friend off on holiday / buying a new car etc

For most of us, this constant comparison is the source of our happiness / unhappiness in relation to money, rather than the actual money itself.

What I’m saying is that if you could remove these elements from society, the desire to chase money and achieve the illusionary happiness we believe it provides would diminish.

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Beyond a certain sum that buys you the basics, the money / happiness link becomes a moot point, and what takes on more significance is the exposure to marketing / lifestyle aspirations / comparisons with your fellow man.

We live in a country where it is now impossible to avoid almost hourly self-analysis with the rest of the population - whether it’s a billboard advert, Facebook, TV commercial, friend off on holiday / buying a new car etc

For most of us, this constant comparison is the source of our happiness / unhappiness in relation to money, rather than the actual money itself.

What I’m saying is that if you could remove these elements from society, the desire to chase money and achieve the illusionary happiness we believe it provides would diminish.

^ This.

Living in a capitalist place like London can be terrible for what is described above, as you can't help but compare to the next man, so it's important to keep this in check.

Owning more things creates more problems. A certain amount of money is helpful of course, but beyond that you worry about losing it too. While it's a first world problem, holding cash in an inflationary economic environment is strangely quite stressful too.

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^ This.

Living in a capitalist place like London can be terrible for what is described above, as you can't help but compare to the next man, so it's important to keep this in check.

Owning more things creates more problems. A certain amount of money is helpful of course, but beyond that you worry about losing it too. While it's a first world problem, holding cash in an inflationary economic environment is strangely quite stressful too.

Totally agree...it's that gnawing feeling that the "other bloke" has got more than you that can be terribly destructive to happiness.

Mrs EC and I have worked hard to train ourselves out of it (and we've had lots of practice given the number of people we are acquainted with who have hocked themselves up to the eyeballs to fund 2 new cars every year, 3 holidays and large houses).

The thing people miss is that it is time that is the one limited factor in your life. Once you've achieved a certain level of income then you really have to look at what you value most. Having a toddler really brings this home, our daughters favourite Saturday morning treat is to go and see the donkeys in the field up the road. Completely free, and yet she prefers this to a myriad of other, more expensive options.

I think that taking the time to enjoy the "pleasure of small things" is the real secret of happiness which gets lost in our consumerist society which defines success through the (apparent) ownership of stuff and the debt treadmill this puts you on.

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I think that taking the time to enjoy the "pleasure of small things" is the real secret of happiness which gets lost in our consumerist society which defines success through the (apparent) ownership of stuff and the debt treadmill this puts you on.

Agreed..I get envious of others sometimes, when I see the big car and the apparent wealth, but I really do know that our (family) best and happiest moments come at the least expected times and often cost nothing. The other important thing though is to live below ones income and I know from experience, that isn`t always possible or easy.

Money gives some freedom of movement, a sense of security and freedom to express oneself, which is very important. I do know of some, who have great wealth and yet seem worried about losing it all and spend many waking hours thinking about making the most of their wealth and building on it. Seemingly to the exclusion of happiness. The answer to having ones cake and eating it, causes some stress.

edit : I see parking wardens are low down on that happiness scale.......good :)

Edited by GinAndPlatonic

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Yes, there's a lot of truth in this thread already.

From experience, being dirt poor is bloody awful. You know precisely how much you've got and where it's going to etc. There is no discretionary or unplanned spend - and even if you enjoy visiting the donkey up the road, it's knowing that's all you can do which is soul crushing. Add in debt because unavoidable unplanned spend, and it can be a slow circle downwards.

Being well off isn't a cake walk either. You earn £xxK - and then realise that you've actually going to have £xxK-xx% to spend due to higher tax rates. Self assessment while not that difficult becomes an annual pain - and one where there's an assumption of nasty things happening if you don't get it right. Add in possibly higher expenses and admin - and there's a danger of thinking it's not worth the extra effort. It is infinitely preferable to being poor though.

Money buys you the opportunity to be happy. There's quite a good book I read recently, called Happy Money which talks about how to maximise the chance of being happy when you spend your money. There's a number of principles e.g. spending on others, buying experiences rather than material goods, allowing yourself to anticipate rather than instant gratification etc.

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Money buys you freedom, and that in itself is the road to happiness. Freedom to choose where you live, who you socialise with, what you eat, what you live in.

For example, I am only divorced because I could afford it. I have mates who cannot afford divorce because they know they would be forced into a bedsit eating beans. They eat shit every day at home because of lack of money.

The line about more money above a certain amount not giving you the same happiness - that is true. Once you are financially free, as long as you avoid debt, the idea of the next million is not that attractive.

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haven't looked at the link yet, but been seeing mentioned a lot recently about the difference between experienced happiness and percieved happiness.

Apparently if you ask people at random intervals how happy they currently feel, poor people ar just as happy as rich, but if you ask people how happy they are with their life, then rich people are happier.

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So it seems anything beyond 42k pa is not worth chasing, according to the chart.

The chart's childishly simplistic, it shows how much happiness an incremental £1 brings. It's blinking obvious that an incremental £1 means less and less the wealthier the person.

If the chart was redrawn on a log scale, so it measured how much happiness an incremental 10% of wealth brings, then you'd see a straight line extending out to infinity.

It's a sobering conclusion, but if a billionaire becomes 50% richer they will be happier by precisely the same amount as a pauper who becomes 50% richer. Sadly there are no natural limits to avarice.

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The chart's childishly simplistic, it shows how much happiness an incremental £1 brings. It's blinking obvious that an incremental £1 means less and less the wealthier the person.

If the chart was redrawn on a log scale, so it measured how much happiness an incremental 10% of wealth brings, then you'd see a straight line extending out to infinity.

It's a sobering conclusion, but if a billionaire becomes 50% richer they will be happier by precisely the same amount as a pauper who becomes 50% richer. Sadly there are no natural limits to avarice.

But surely diminishing returns kick in at some point? I am sure that a £10 bottle of wine is 2x "better" than a £5 one; but would a £100 bottle really be worth the extra over a £50 one (bragging rights aside)?

The same applies for all sorts of things. Are the city boys on flash bikes in Richmond Park really getting 5x more pleasure out of their ride than me on my relatively humble cyclecross?

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Money buys you freedom, and that in itself is the road to happiness. Freedom to choose where you live, who you socialise with, what you eat, what you live in.

For example, I am only divorced because I could afford it. I have mates who cannot afford divorce because they know they would be forced into a bedsit eating beans. They eat shit every day at home because of lack of money.

The line about more money above a certain amount not giving you the same happiness - that is true. Once you are financially free, as long as you avoid debt, the idea of the next million is not that attractive.

That's made me glad I'm still single!

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But surely diminishing returns kick in at some point? I am sure that a £10 bottle of wine is 2x "better" than a £5 one; but would a £100 bottle really be worth the extra over a £50 one (bragging rights aside)?

The same applies for all sorts of things. Are the city boys on flash bikes in Richmond Park really getting 5x more pleasure out of their ride than me on my relatively humble cyclecross?

This has always been one of my philosophies. If more people thought like this it would put a lot of multinationals out of business.

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Money buys you freedom.

Money buys you time - and that is something more valuable than money itself. Time to do what you want to do. To think, to contemplate, to read, to write, etc.

The worlds richest - billionaires and all, still haven't been able to pay someone to stop ill health, aging, and death.

Edited by 200p

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But surely diminishing returns kick in at some point? I am sure that a £10 bottle of wine is 2x "better" than a £5 one; but would a £100 bottle really be worth the extra over a £50 one (bragging rights aside)?

The same applies for all sorts of things. Are the city boys on flash bikes in Richmond Park really getting 5x more pleasure out of their ride than me on my relatively humble cyclecross?

I think you might be mixing up individual possessions with total income. There are no diminishing returns to total income, even though there may well be diminishing returns to incremental purchases.

John McEnroe, the tennis player, is an avid art collector. But he can "only" afford to pay up to $500k for any one individual item. Listening to him express his frustrations about this financial restriction to his passion, it's clear that if his wealth doubled he'd be every bit as delighted as I would if my wealth doubled. As I said before, there are no natural boundaries to avarice.

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I think you might be mixing up individual possessions with total income. There are no diminishing returns to total income, even though there may well be diminishing returns to incremental purchases.

John McEnroe, the tennis player, is an avid art collector. But he can "only" afford to pay up to $500k for any one individual item. Listening to him express his frustrations about this financial restriction to his passion, it's clear that if his wealth doubled he'd be every bit as delighted as I would if my wealth doubled. As I said before, there are no natural boundaries to avarice.

You cannot be serious.

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Totally agree...it's that gnawing feeling that the "other bloke" has got more than you that can be terribly destructive to happiness.

Mrs EC and I have worked hard to train ourselves out of it (and we've had lots of practice given the number of people we are acquainted with who have hocked themselves up to the eyeballs to fund 2 new cars every year, 3 holidays and large houses).

The thing people miss is that it is time that is the one limited factor in your life. Once you've achieved a certain level of income then you really have to look at what you value most. Having a toddler really brings this home, our daughters favourite Saturday morning treat is to go and see the donkeys in the field up the road. Completely free, and yet she prefers this to a myriad of other, more expensive options.

I think that taking the time to enjoy the "pleasure of small things" is the real secret of happiness which gets lost in our consumerist society which defines success through the (apparent) ownership of stuff and the debt treadmill this puts you on.

http://www.youtube.com/watch?v=obJygNaMY3s

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