Does Money Buy Happiness?

Investing
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By Jonathan DeYoe

Learn more about Jonathan on NerdWallet’s Ask an Advisor

It’s an old question: Can money buy you happiness? Up to a point, yes. But without deep personal relationships, more dollars don’t make you happy.

Last night, I sat with my father and we talked about happiness and satisfaction. My question was simple: Looking back at his life, was he satisfied?

True to form, he proclaimed my brother and I are his greatest achievements. While I agree my brother and I are amazing, I was hoping for deeper insight.

“Dad,” I asked, “what creates happiness?”

We talked about setting and reaching goals, life timelines and the aged Polonius’s lessons for his son, Laertes (Hamlet, Act 1, Scene 3), such as: Keep close friends, don’t lie, “neither a borrower nor a lender be” and “to thine ownself be true.”  We talked about the many categories of goals and about the tendency in our culture for our life goals to devolve into financial ones.

We want to spend money on stuff and experiences. We want a comfortable and fun retirement, want to send our kids and grandkids to quality schools. We want great, or at least decent, health care in our last years. These things cost money, more and more money all the time until our life plan becomes our financial plan.

We lose sight of the experiences and the education and mark our milestones as expenses we can afford, sacrifices we have to make or trade-offs we willingly accept. Researchers at the University of Michigan recently maintained in a study that money does buy happiness and riches do buy satisfaction in life. Plus, happiness and satisfaction increase with wealth.

“Studies by us and others have pointed to a robust positive relationship between well-being and income across countries and over time,” the researchers exclaim. It seems happiness in life does come down to cash.

This attitude is dangerous, even paradoxical. The more about money life becomes, the less real-life satisfaction we take. When the goal is enough money for our children’s education, we justify working longer hours instead of coming home and reading to them. When the goal is a big income for us and our spouse’s retirement, we work weekends instead of spending time with the spouse. We sacrifice the certainty now to afford the mere possibility later.

Money is important, but why let it measure us?  We need to make life about the amount and quality of time with our loved ones. If we make this change – push money aside in favor of the four pillars of life satisfaction: health, expertise, relationships and giving back (not necessarily in that order) – we can be happier and meet with greater life satisfaction than if we simply measure ourselves financially against our peers, neighbors or relatives.

According to the golfer character Ty Webb in Caddyshack, we don’t have to measure ourselves at all:

Judge Smails: Ty, what did you shoot today?

Ty Webb: Oh, Judge, I don’t keep score.

Judge Smails: Then how do you measure yourself with other golfers?

Ty Webb: By height.

I’m 6-foot-5, so this could work for me.

Except life isn’t about your height or bank statements or the color of ribbon you won, but about your relationships with the people you love and your contribution, not just to an individual retirement account, but to the world around you.

DeYoe, California Insurance License #0C21749, is a registered principal with and securities and advisory services offered through LPL Financial, a Registered Investment Advisor – Member FINRA/SIPC.

The opinions in this material do not necessarily reflect the views of LPL Financial and are for general information only and are not intended to provide specific advice or recommendations to any individual. For your individual investing needs, please see your investment professional regarding retirement planning.