Money Can Buy Happiness
How to Spend to Get the Life You Want
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YOU CAN AFFORD TO BE HAPPY
MP Dunleavey, personal finance columnist for the New York Times and creator of the award-winning “Women in Red” column on MSN Money, presents a radical new plan for attaining happiness—and it doesn’t involve taking money out of the equation. The secret to true and lasting contentment is learning how to spend your cash.
Don’t just spend on—invest in yourself!
Learn how to use your money to buy:
Peace of Mind
How many times have you been told money can’t buy happiness?
It’s time to abandon this old chestnut because money is a powerful tool, which can in fact buy you all of the things you never thought it could: peace of mind, a healthier lifestyle, more time to do the things you love, stronger relationships, security, and loads of fun.
In a world where we’re bombarded with the temptations of conspicuous consumption, personal finance columnist MP Dunleavey presents an antidote to empty spending. Through quizzes, worksheets, real life examples, and sound financial advice, MP shows you how to stop throwing your money away on fleeting pleasures like the hot new designer handbag, or the biggest house on the block, and start investing in your own portfolio of happiness.
Reallocating your assets to reflect what really satisfies you is the way to enjoy a life of true wealth. Money Can Buy Happiness is for anyone who believes finishing happy is more important than finishing rich.
Crown Publishing Group
; May 2007
225 pages; ISBN 9780767927741Read online
, or download in secure PDF format
Title: Money Can Buy Happiness
Author: Mp Dunleavey
Your Happiness Portfolio
There is a gigantic difference between earning a great deal of money and being rich.
For centuries, economists based their theories on the premise that man was a “rational actor” who could be counted on to make economic decisions in his own best interests at all times. (I know, I laughed when I learned that, too.)
As anyone who has put an overpriced vacation on Visa—or spent part of their rent money on clothes—can attest, neither man nor woman is terribly rational when it comes to making economic decisions. You know what you want—yet you go ahead and spend your money on something else. Just look at all the data on retirement: Repeated surveys have found that people aren’t saving enough for retirement; moreover, people know that they aren’t saving enough for retirement. Yet what are people most worried about? Not having enough money in retirement!
These inconsistencies don’t affect just how well we plan ahead; they seem to be a flaw in the way human beings were designed to think and act financially. That’s why it’s important to be aware of your own mixed impulses as you think about using your money to make you happier. Let’s do a short, fun exercise so you can see what I mean regarding some of your own quality-of-life choices thus far.
The Cost of Living
This exercise works like the old “Mad Libs,” but it’s a little more free-form. Just fill in the blanks with adjectives, verbs, nouns, whatever. Add words where you need to, improvise if you feel like it— have fun, be honest, and see what emerges. Time required: About two minutes, if that.
1. I earn a living by ____ ; I consider my job to be ____.
2. My dream job or career would be ____.
3. My home is ____ and a realtor would describe the location as ____ and ____.
4. After work I usually ____ and ____.
5. On the weekend I typically ____ and ____.
6. The top three things I spend money on are ____, ____, and ____.
7. I’d describe my friends as ____; when we see each other we usually ____.
8. My family is ____ and I sometimes wish I could ____.
9. The main things that keep me up at night are ____.
10. The three areas where my time is most committed are ____, ____, and ____.
11. My spiritual life consists of ____ and I feel ____ about that.
12. Sometimes I feel like my life is missing ____.
13. When I have a free hour or two, I usually ____ or ____.
14. My last vacation was ____ and it was ____.
15. If I could change three things about my life, they would be ____ ,____ , and ____.
16.When I’m eighty, I hope to look back on a life that was ____.
Ideally, this exercise should make you feel somewhat surprised or even uncomfortable. Or it might provoke a moment of clarity. When my husband did a test run of this exercise for me, he put down his pen and said, “Well, I’ve just figured out that I hate my job.” He knew that already, but these questions do have a way of giving you a fly- on-the-wall perspective so you can see how various lifestyle choices interconnect—and whether those choices are in sync with what’s most important or valuable to you.
What’s money? A man is a success if he gets up in the morning and goes to bed at night and in between does what he wants to do. —Bob Dylan
Now, as you begin to think like a happiness investor, here are some questions to ask yourself (you don’t have to write anything down here, but do take a couple of minutes to consider your answers):
• What surprised you about some of the answers you gave?
• Did you notice any discrepancies between where your resources go and what you find most satisfying in life?
• What are some ways that you’re using your money, time, or energy that yield the biggest payoff in terms of your own happiness?
• What are some of the ways you’re using your money, time, or energy for paltry gains?
• If you could change one thing this week, maybe even today, that might be a better investment in your own happiness, what would it be?
LIFE IS RICH: INVEST WISELY
It may seem strange to equate your personal well-being with an investment portfolio, but it’s a pretty useful metaphor. It reminds you, the stockholder, that you have a fair amount of control over where you invest and why. And just as every financial investor has very different stakes in his or her portfolio, it’s the same with happiness. Savvy money managers may know to put a certain amount of capital into something solid like bonds, blue chip stocks, or large- cap mutual funds, but the precise investments they choose are up to each individual. Likewise, how you decide to balance your assets in order to enhance your own happiness is ultimately up to you.
After all, how people define happiness is an extremely subjective matter, not to say downright idiosyncratic at times. It’s pretty amazing to imagine the myriad types of joy, pleasure, contentment, and elation each person can have—even within a single day:
• There’s the deliciousness of your first sip of coffee in the morning…
• the thrill of overcoming a challenge…
• the bliss of lying in the sun…
• the physical rush of exercise …
• the peace you feel while watching a child sleep …
• the fun of fall-off-your-chair laughter with friends …
• the satisfaction of doing your best …
• the joy when you hold someone you love …
• the tingly relief of a shower after a sweaty workout …
• the excitement when you’ve landed a new job …
• the ordinary happiness of knowing, thank God, it’s Friday.
You could add dozens of items to this list, and so could I, but the bigger question is: How do you decide which type of happiness to invest in? Are some better investments than others?
Yes, as it turns out, some are. Eons of human experience plus quite a bit of research have left a fairly thick trail of bread crumbs that show where the path to happiness lies. And as your official happiness adviser, those are the stocks that I’m going to recommend you put at the heart of your portfolio. I’ve outlined them below and will explore them in detail in the coming chapters.
ASSET #1: YOUR VALUABLE TIME
People talk about how much time they spend doing this or that, but how often do you think about the “spending” part of the equation? Yet how you spend or save or waste your time has just as much of an impact on your quality of life as the way you choose to spend your cash. Chapter 3 is about the trade-offs you can make to reclaim your time—and invest in a happier life.
ASSET #2: YOUR PERSONAL RESOURCES
When talking about happiness, Aristotle used the Greek word eudaimonia —which doesn’t refer to the upbeat outlook we moderns associate with being happy, but rather to the life well-lived: the inner satisfaction you gain when you live up to your strengths and make the most of your talents. Today the field of positive psychology has generated numerous studies about the immense benefit of being engaged in activities that stretch the envelope of who you are—and that by being more active and positive in your approach to your own life and goals, it is possible to up your happiness quotient. Investing in yourself is what chapter 4 is all about.
ASSET #3: YOUR HEALTH
Most people think of good health as a positive thing on its own. Investing in your health as a means of increasing your total well- being is still a relatively new idea, even though science supports the rather obvious conclusion that healthier people are happier. Chapter 6 shows how small but steady investments in your physical plant are key to the overall performance of your portfolio. (Besides, shoring up your physical well-being will save you money in the long run—dividends that you can use to further invest in your quality of life as well.)
ASSET #4: FINANCIAL CONTROL
For many people, worrying about money has become a way of life—and scientists are now connecting persistent financial angst with serious mental and physical ailments. Small wonder that learning better money management skills in order to invest in your own ongoing financial sanity is so important. In chapters 3, 7, 8, and 9, I’ll show you how to ditch bad money habits, vanquish debt, buy yourself greater peace of mind—and take control of your future. If you feel euphoric at the very thought of a stress-free, well-ordered financial life—you know what a vital part of your happiness portfolio this will be.
ASSET #5: MUTUAL FUN
You don’t need me to sell you on the importance of developing a strong fun strategy. (And you don’t need to see The Shining to know that “all work and no play” really doesn’t work out well for anyone in the end.) In chapter 10 we’ll tackle the all-important fun sector and the countless ways it can boost your portfolio’s overall performance. I’ll also reveal the groundbreaking results of my Highly Unscientific National Fun Survey.
ASSET #6: GET INTO BONDS
Scientists squabble about whether happier people tend to have more active social lives—or whether having vibrant connections to others makes you happier. It’s possible to see the issue either way, but one thing seems indisputable: We are people who need people, as the schmaltzy old song goes. The correlation between having friends, being part of a community and/or close to your family, and being happy is a strong one. The data on the long-term benefits of marriage are also striking.
That doesn’t mean you have to win a popularity contest or leap into a romantic relationship to be happier. But investing more in the people who are most important to you is essential to having a life that’s fulfilling. More on that in chapter 11.
ASSET #7: GIVING TO FEEL GOOD
Donating your time and money to help others is always presented as the “right” thing to do. The fact that it makes you feel good, too, has been largely ignored as a minor fringe benefit. Now researchers are finding that the act of giving bestows numerous gifts on the giver as well: It supports and strengthens social bonds, enriches your life, enhances your health, and even boosts longevity. It’s like discovering that eating a can of spinach really will turn you into a hero, although I promise chapter 12 makes no mention of eating your vegetables.
So does this mean you must invest in this little lineup of so-called happiness stocks or risk a life of low returns? Nope. These are just some of the areas that researchers have found that contribute to personal satisfaction and quality of life. Only you can decide how you want to invest this portfolio of yours. In the financial world, people use different methods to determine their asset allocation—and the same seems to be true of well-being: How you choose to allocate your assets will be based on numerous factors in your own life.
In early 2006, I attended a symposium on Economics and Happiness at the University of Southern California. There I met Mariano Rojas, an economist at the Universidad de las Americas in Puebla, Mexico, whose research supports the idea that happiness is a mix, you might say, of different stocks.
Rojas surveyed 579 people in five districts in Mexico about their overall well-being, and then asked how satisfied they were in various areas of life—work and career, family and community, health, and so on. Like many economists, he found that some arenas have a greater impact on people’s contentment with life—for example, a rewarding family life was a key ingredient in overall life satisfaction, whereas work tended not to have as big an impact. But Rojas also found that it’s possible to increase your individual happiness by investing more in the areas that will have the most impact for you— and less in those that don’t. “Hence a person who is very unsatisfied in her family domain and satisfied in her economic domains may benefit the most from an increase in family rather than [increasing] economic satisfaction,” Rojas writes.
His point isn’t that we all need to invest in the same things, but rather that the way people choose to invest in their happiness is “contingent on a person’s own circumstances.” If you’re in good health and have a happy home life, you don’t need to invest more in those domains. Rather, like any savvy investor, you’re better off paying more attention to the sectors of your portfolio that aren’t delivering the returns you’d like to see. Perhaps you need to have more fun, to reduce stress, spend more time with friends, or find more time for yourself.
The essential thing to remember as you go through this book is that “joy” and “satisfaction” and “happiness” aren’t just pleasant, abstract notions; investing in a happier way of life requires making new decisions about how you spend your money and time.
For years, Wendy and Peter didn’t think they could afford anything but the lifestyle they had. They were both working full-time jobs in a big West Coast city. Peter commuted an hour to and from work. They earned quite a good living, but that was paling beside the escalating levels of stress in their lives. “We were emotionally, mentally, and physically depleted—and I had all kinds of health issues that were made worse by the way we were living,” Wendy says. “Peter was exhausted by driving an hour each way. He would come home at 7:30, our daughter went to bed at 8:00, and that was his day.”
Like many people, for years the two struggled to figure a way out of all these demands. Maybe Wendy could quit her job or work part-time; maybe they could live on less. But as we all know, it’s hard to make a change when the treadmill of life just keeps moving forward, pulling you with it. Then, Peter was offered a job in another city— and that became the catalyst they both needed to invest in a new way of life.
Peter now had a ten-minute commute to his job. Wendy wasn’t sure what would happen when she left her job—but it turned out that her managers were willing to make it work long- distance. So what she feared might be a flying leap into unemployment turned out to be a gentle step into telecommuting—but at a reduced salary. “I started working twenty-four hours a week and took a huge pay cut,” she says, “but it’s been worth every penny.”
Did she and her husband have to cut back, watch what they spent, become more careful with money? Sure, but not nearly as much as they’d feared. Even though they now were making less, it turned out that with more time to devote to their newly sane life, the two were better money managers. “We didn’t have the energy before,” Wendy admits.
From the Hardcover edition.