#238 Does More Money Really Make You Happier?

Hey, everyone. Hope you've had another great week today. I want to dig into a topic that, let's face it, impacts every single one of us. And these are the two words that I want to talk about. Money and happiness. How do they intersect? And does more money truly bring more happiness? If this sounds interesting to you, stay tuned. You're going to enjoy this one. Welcome to the Passive Income MD Podcast, where we talk about creating your ideal life through multiple streams of income. If you enjoy hearing about this stuff, make sure to hit subscribe. Now, let's get on with the show. Okay, so I've been thinking about this topic of happiness, and it's been on my mind lately because I just came back from a conference, actually overseas. It was about seven days where I spent in Abu Dhabi, Dubai, and a little bit in India. And the topic of the conference was happiness. And I know that might lead a couple of people to scratch their heads, like, what are you doing going to a conference on happiness? But let's face it, that's what we all care about at the end of the day. How do we become happier? How do we live happier? How do we help our family and loved ones be happier? And I find that all of us as scientists, like, we don't realize that there's a formula to it. And if we can figure out how to be better ourselves, we can impact those around us, and ultimately, we can all be happier together. And one of the topics that of course came up was that the idea of money, does money make you happy? And there's this quote that I love. It says, if money doesn't make you happy, then you probably aren't spending it right now. It really opens up a really interesting conversation. Is happiness about how much money you have, or is it really about how you use it? I think the best way to start with this is to start with a perspective that I think we've all seen at one point or another. Or this could be us. In some ways, there are people who seem almost fearful of spending money. I mean, they'll go out of their way to save a couple cents per gallon of gas, or they'll avoid buying. Buying anything that they don't consider necessary. Now, this might just be a minimalist thing, but for many people, it's about money. On the other hand, there are those who spend really freely without much thought to where their money is going. Maybe they find themselves under financial strain and stress, but they still spend money. And I'll admit I've been at both of these extremes at some point in my life. And I don't think this has to do with how much money you make or where you're at in life. You just find yourself in one of these buckets at some time or another, depending on your experience, depending on, on how you grew up, whatever it might be. But what's fascinating though is that having a lot of money, of course there are studies on this that it shows that doesn't necessarily translate to being happier. Although I might disagree to a degree. There are studies that show that they're after certain income level, around 75,000 per year, according to some of this research. Additional income, it doesn't really significantly increase happiness on a day to day basis. And I know for some people, they worry that money will change you or that money changes people. But what I've learned over time, and this is through experience and through hearing from other people that I value their wisdom. Money doesn't actually change who you are. It really just amplifies who you are. Meaning that if you have certain habits, priorities or values, money will amplify those things. And what I mean by that is that let's say you're a generous person. If you have more money, I believe that that's going to amplify your generosity. But if you are kind of stingy and selfish, I think the more money necessarily doesn't do much for you, you'd probably be more stingy, more selective with how you spend your money. And I believe money is a tool like anything else. It's just most valuable when you decide how to spend it appropriately and use it purposefully. So maybe it's not about the amount of money that we have, and that's not the whole story. Maybe it's about how we use it. This makes me think of a great book that I read recently in the last couple years called Die with Zero by Bill Perkins. And I know I talk about it a lot, but if you haven't picked up that book, I highly suggest you take a quick read through it. One of the core ideas in that book is that our experiences, especially the ones that we can have while we're young and healthy, they often bring more happiness and fulfillment than just accumulating all this wealth for later. I know for many of us, we think about our wealth in terms of accumulating it as much as we can so that when we get to this magic number, we can retire and hopefully we won't run out of money before we die. However, the author here, Bill Perkins, argues that someday you're going to have the money but you might not have the health or the energy to be able to spend that money and enjoy certain experiences that you want. For example, maybe when you're younger, you might not have a good amount of money, but you love heliskiing, for example, which takes a lot of money to do. But someday in the future, if you don't actually spend the money, when you're able to do that, if you wait too long, you might have the money, but you might not have the health or the energy to be able to actually do that. So his message is all about maximizing those moments now while you're able to, both from an economic standpoint and from a health standpoint. And probably most people listening to this, you're somewhat in that prime time zone right now where you have some money, you have your health, and so this is a prime time. Hey everyone. Looking for a wealth strategy that offers flexibility and control. I mean, who wouldn't want that, right? Waystone Advisors has the solution. Waystone Advisors specializes in personalized wealth building strategies that go beyond traditional investing. And you know, I like that. By combining academically tested research with innovative financial solutions, Waystone empowers clients to pursue their most important financial goals with confidence. Founded on the belief that everyone deserves access to sound financial advice, Waystone Investment Advisors is dedicated to helping clients plan for a future that's both intentional and secure. Discover more@waystoneadvisors.com that's w a Y-S-T o n e advisors.com and start building your path to financial success. Now back to the show. So how are you going to use your money now to create those experiences and to, to really bring a lot more satisfaction, enjoyment in your life and psychological research backs all this up. And it shows again and again that when you spend money on experiences like travel, maybe some hobbies, learning something new, doing things with loved ones, that's going to bring you a lot more sustained happiness than spending it on material possessions. And I think we all know that from experience. We know that when we buy something, we get excited about it. And we see this in our kids too when we give them presents or gifts. How long does that joy last? It only lasts for maybe a couple hours, a couple days, definitely doesn't last years. But when we go on experiences like vacations and that connects us with all sorts of other people, it creates memories, we have pictures from it and we think about those trips again and again and they continue to pay dividends over time. In fact, that's probably something as you get older, you long for those times you long for those memories, and you try to bring those up. And if you think about those times, they'll bring a smile to your face. Even on a tough day, you think about it, you might laugh or whatever that might be. What you don't want to do is get caught in that cycle where you buy things, adjust to it, you adapt, and now that becomes the standard. And now you have to buy more things to get that same kind of dopamine hit or feel good. And that happiness fades really quickly. Some might call that the Hidanish treadmill. You might have heard that term before. And that's not to say like buying things is wrong or won't make you happy. The point is that if we really understand how we spend, how we spend on things versus experiences and find a balance there, we're more likely to use money in a way that really enhance our lives, enhance our happiness. But what's true is that our relationship with money, it's not just about how much money we have or what our life circumstances are. It usually shows or reflects some sort of deeper value that we have or our mindset about all this stuff. Like, what is your first thought that comes to mind when you think about money and happiness? Is it about security? Is it about freedom? Is it about helping other people? Or maybe it feels really stressful to think about that, or complicated. How you react to all this is really revealing about how you relate to money. And it might guide you in figuring out how you might want to focus your energy. If the thing that you value most is security, then maybe having a decent amount in your savings account might be the key to your happiness. So you want to at least have that bucket filled, at least to a certain degree. If it's about freedom, then maybe it's about spending your money on things that make you feel free, like going on vacations, learning new skills, and that'll create happiness, ultimately. The best piece of advice I've gotten around this is to at least conceptually create a spending plan that really aligns with your values, where you can feel like you're spending things intentionally to bring you joy or fulfill a purpose or feel better about your life and your finances. And again, I'm not one to judge anyone's spending habits because I think I'd be embarrassed sometimes to show people what I spend money on. But if something brings you joy in the short term and also the long term, like, you're probably doing it right. But the other thing to consider is that many of us believe that we'll find that elusive happiness once we reach a certain point or a certain financial milestone. But in reality, there's so many people who have reached those things, and then you need more.

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There was this one study where they asked people, how much money do you feel is necessary? Or how much do you feel like you should earn to be at a place where you feel really secure about where you're at? And it didn't matter if somebody made fifty thousand, a hundred thousand, two hundred fifty thousand. Everyone's answer usually landed around the double mark of what they currently had. Meaning that if somebody made $100,000, they felt like they needed to make 200 to be secure, but if somebody made 250,000, they felt like they need to make 500,000 to be secure. I think that's just like a human thing where we always feel like we need more, more to feel security. And we adapt unfortunately over time and our lifestyle tends to increase according to how much we make. In fact, I know somebody that literally has over a hundred million dollars in the bank and one of his biggest concerns and fears is that he's going to run out of money before he dies. And I couldn't understand that. But it's kind of shows that this is more of a mindset thing versus a mechanics or actual value of money. The other thing that has been shown again and again to boost your happiness levels when it comes to money is not just spending money on yourself, but spending money on other people. Now have you noticed that in your own life? Like, you know when you spend money on something for yourself and you get a reaction, I mean, of course you're happy that you spend money on it, but when you spend money on someone else and you see the impact of that, like how much more joy does that bring to you because you get to share it with somebody else, whether that's somebody you know, whether it's donating to a cause or supporting someone, obviously there's a deep sense of fulfillment that's hard to get in any other way but spending your hard earned money and helping somebody in need. So to sum it all up, there's no single answer for this ultimately comes down to understanding what brings you happiness and finding a balance that really aligns with your values and lifestyle. So take a moment this week. I know that as doctors, we don't always love talking about money. In fact, it's probably taboo to talk about it at work. But this is the passive income MD community where we talk about money, we talk about life, we talk about freedom, happiness, and all these things are important and it's okay to talk about these things because that's real life. Think about where your money's going and how it's supporting or not supporting your happiness. Maybe you can adjust your spending even in small ways to better align with your goals. And I found that sometimes that makes a big difference. Just booking that one trip or upgrading it a little bit or you know, spending it on somebody else, just making a small difference there can really impact how you feel about your own finances and the impact that you're making. So in any case, I hope this episode sparked some new thoughts about your own relationship, money and happiness. Again, there's no one size fits all. It's about finding what works for you and the people that you love the most. So have an amazing weekend. And again, remember, it's all about using money as a tool to amplify the best parts of who you are. I hope you've enjoyed this. Let's talk again soon. Thanks everyone.

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