How to Be Happier With Your Money

Flickr, Quinn. 

Kurt Vonnegut and novelist Joseph Heller were once allegedly at a party hosted by a billionaire hedge fund manager. Vonnegut mentioned that their wealthy host made more money in one day than Heller ever made from his novel Catch-22.

Heller responded: "Yes, but I have something he will never have: enough."

Whether it's true or not, I've always thought this to be one of the smartest finance stories ever told. 

All throughout college, I had one career plan: investment banking. The industry was attractive to me, and thousands of other students blinded by a lack of life experience, for one reason: You can make a lot of money. Six figures right out of school, and millions later in your career.

There's just one catch. Your life becomes abjectly miserable.

One-hundred-hour work weeks, the most pressure you've ever experienced, and less exposure to sunlight than death row inmates. They had a saying: "If you don't come to work on Saturday, don't bother coming back on Sunday." The senior bosses were worth millions, but stressed, overweight, anxious, never saw their kids, and hadn't taken a vacation in years -- I'm unfairly generalizing, but only slightly. Almost no one actually enjoys it. I quickly cried uncle, moved on, and never looked back.

In his book 30 Lessons for Living, gerontologist Karl Pillemer interviewed 1,000 elderly Americans (most in their 80s and 90s), seeking wisdom from those with the most experience. One quote from the book stuck out:

No one -- not a single person out of a thousand -- said that to be happy you should try to work as hard as you can to make money to buy the things you want.

No one -- not a single person -- said it's important to be at least as wealthy as the people around you, and if you have more than they do it's real success.

No one -- not a single person -- said you should choose your work based on your desired future earning power.

The elderly didn't say that money isn't important. They didn't even rule out that more money might have made them happier. They just seemed to understand the concept of enough

Studies show that money does increase happiness. The latest research shows there's not even a known satiation point -- a higher income makes virtually everyone happier, although each additional dollar delivers less happiness than the one before it.

But we tend to overestimate money's potential on our happiness by thinking of it out of context. Daniel Kahneman, a psychologist who won the Nobel Prize in economics, writes in the book This Will Make You Smarter:

On average, individuals with high incomes are in a better mood than people with lower income, but the difference is about a third as large as most people expect. When you think of rich and poor people, your thoughts are inevitably focused on circumstances in which income is important. But happiness depends on other factors more than it depends on income. 

In other words, young investment bankers assume a big income will make them happier because they think about a nice house and fancy cars, not working until 4 a.m. and having no social life. 

In a New York Times column three years ago, David Brooks put a twist on this thinking by analyzing the life of actress Sandra Bullock. He wrote: 

Two things happened to Sandra Bullock this month. First, she won an Academy Award for best actress. Then came the news reports claiming that her husband is an adulterous jerk. So the philosophic question of the day is: Would you take that as a deal? Would you exchange a tremendous professional triumph for a severe personal blow?

"If you had to take more than three seconds to think about this question, you are absolutely crazy." Brooks concludes. But for the same reason investment bankers choose a miserable life while assuming money will make them happier, I'm willing to bet many otherwise happy people would have gladly changed shoes with Bullock three years ago. Research is clear that some things completely override any happiness that can be gained from money or work success. It's just hard to realize that because money is tangible, measurable, and universal, whereas the "other factors" Kahneman mentions that have a greater impact on our happiness are vague and nuanced. 

What are those "other factors" Kahneman mentions?

The field of positive psychology studies what makes people happy. It's a young and constantly changing field, but researchers broadly agree that four major points have a big impact on making people happy:

  • Control over what you're doing.
  • Progress in what you're pursuing.
  • Connections to other people.
  • Having purpose and meaning.

That's it.

You'll notice "more money" isn't on the list. But you can easily see how money ties into these points. Money can grant you freedom from a nine-to-five job, offering control over what you're doing. It can provide the tools necessary to achieve progress in whatever you're pursuing. It can afford you time off to and a chance to spend time with other people. It can give you the ability to provide for people other than yourself, bringing meaning and purpose. To the extent that money can buy happiness, most of us would do better to think of how it can help us achieve these four points.

Everyone is different, though. So I want to ask you: How much is enough money? Are you there? Will you ever get there? Do you even want to? Share your thoughts in the comment section below. 

Check back every Tuesday and Friday for Morgan Housel's columns on finance and economics. 

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  • Report this Comment On July 02, 2013, at 12:28 PM, prginww wrote:

    Hi Morgan,

    Great article, as always. Anyway, just wanted to let you know that your link for the latest research on the satiation point for additional money is broken.

    It is of great interest to me.

    Is it possible for you to let us know the title of the research paper and its authors so that we can Google it? Thanks alot!


    Ser Jing

  • Report this Comment On July 02, 2013, at 12:30 PM, prginww wrote:
  • Report this Comment On July 02, 2013, at 12:36 PM, prginww wrote:

    Thanks Morgan!

    It works :)


    Ser Jing

  • Report this Comment On July 02, 2013, at 12:58 PM, prginww wrote:

    I'm not sure if my wife and I are there yet. But like a lot of others, I'm not sure if I'll even know when we get there. I think the best thing to do is strive for the four other factors you mention above and work your tail off along the way. With a little luck, it will all come together.

  • Report this Comment On July 02, 2013, at 1:20 PM, prginww wrote:

    "So I want to ask you: How much is enough money? Are you there? Will you ever get there? Do you even want to? Share your thoughts in the comment section below. "

    I started out like most people...young, not only broke, but in the hole, AND still living with my parents. Twenty years later, and my net worth today is right around 525k.

    I have been growing, mistakes and all, my then 5 figure equity portfolio at an annualized rate of 18% since May of 1998.

    I am 47 years old.

    Do I have "enough?"


    Do I "feel" rich?

    Not really.

    I still live in the same 2100 square foot house I put 30% down on over 15 years ago, I still eat at McDonalds, wear a plain white t-shirt damn near everyday, do my own taxes, cut my own grass, cut my own hair, and drive a beat up car half the time.

    I was dragged kicking and screaming to the apple store to buy a new iphone because my 5 year old model wouldn't hold a charge anymore.

    I opted for the 4 model, because it was only a dollar, but the cheapest model they had in stock was the 4s, which I upgraded to for 99 bucks. I could not believe my ears when I saw people were paying 6-700 bucks for a stupid phone.

    I had my one and only 32inch television set for 14 years before I finally gave it away last spring to goodwill and bought ( another 32 inch) flat screen HDTV model.

    Thus, you could say I don't love being rich nearly as much as I hated being poor. I (obviously) still follow the same principles that got me to where I am today.

    Am I am "happy?"

    Most of the time.

    Does having money solve all of your problems?

    Oh Hell no.

    The one thing you must never forget about having "money" is that it is very difficult to sustain wealth if you're spending most of all you make, or have made, all of the time.

    The one good thing I will say about having money is that it does give you options. If I can't stay in a four seasons hotel, I simply won't vacation in a place like Chicago or Miami anymore.

    Good day.

  • Report this Comment On July 02, 2013, at 1:57 PM, prginww wrote:

    Good post Daveandrae.

    I've been thinking of a career change into something like investment banking. But you sure didn't paint a rosy picture of it Morgan.

    How much money is enough really depends on where you live. My wife and I live very comfortably in Kansas on 80k a year (Hopefully that increases to 150k a year after she's done with her PhD). But I'd guess you'd need 120k-130k to have the same lifestyle in New York, Washington D.C., or other stupid high cost of living places.

    I do want to get there, but not at the expense of missing out on life. 100k is plenty if my wife and I only have to work 40-50 hours a week each. Is an extra 50k worth an extra 30 hours per week? No. I'm guessing it would take a million dollars for me to justify working 80-90 hours a week. But, even then, I'd only do it for a year just to earn the money, then go back to a reasonable 40-50 hours per week and make much less. Life is too short and there are too many other things to do, especially if you have kids. Plus I don't want to get fat because I have to eat crappy food real fast every day.

  • Report this Comment On July 02, 2013, at 3:03 PM, prginww wrote:

    Awesome piece, Morgan

  • Report this Comment On July 02, 2013, at 4:40 PM, prginww wrote:

    Financial independence is "enough" for me. I am solidly middle class, wife and two kids and a mortgage.

    But... It all hinges on someone else paying me. I hate that. It causes me untold stress that someone else who doesn't care if my kids eat or I lose my house can decide my fate.

    I'll have enough when my savings and investments can maintain what I have right now. I'll have enough when no one holds the well being of my family in their hands.

    Now go update the TMFHighYield and TMFHighYield2 portfolios!

  • Report this Comment On July 02, 2013, at 4:41 PM, prginww wrote:

    Hey Morgan,

    This is kind of off topic, but this article sparked a thought. I remember reading a study that said that people who have kids are generally less happy than those without kids.

    I wonder if a big reason why is that by having kids you really lose control over what you are doing. I know in my own life, my schedule is really no longer my own, as everything we do relates to keeping our kids fed/entertained/rested.

    It also constricts time that you would have spent connecting with friends, as it becomes a lot harder to say yes to activities on a whim.

    On the flip side, I do think that having kids give you more purpose and meaning to you life, which may offset the negatives listed above.

    An interesting piece, as usual.


  • Report this Comment On July 02, 2013, at 5:51 PM, prginww wrote:

    And yet, some of my happiest times were when I was broke but didn't know it. We're talking early 20s -- irresponsible, impulsive, unfocused. Youth is wasted on the young, eh? Or maybe I just thought I was happy, and the memory of that time improves with age. In any case, the definition of "enough" is certainly a moving target. The Great Recession has resculpted my definition of "enough," both for better or worse.

  • Report this Comment On July 03, 2013, at 8:20 AM, prginww wrote:


    Great article, but I have one nit to pick--more with David Brooks than you.

    The Sandra Bullock story really comes across as blaming Sandra Bullock for having her husband cheat on her. The implication is that she was too busy winning an Academy Award to prevent him from going astray. What are we to assume? She didn't pay enough attention to him? She wasn't vigilantly keeping an eye on him?

    The cheating and Academy Award are mutually exclusive events. My neighbor is a housewife. She stayed home and raised 3 children. She is getting divorced because her husband cheated on her. What did she do wrong? She sure didn't go out and win an Academy Award--as though that is some kind of personal failure for a wife.

    That's why the story doesn't sit right. Sandra Bullock is a "high achieving" woman and so her husband cheating is somehow her fault? What about all of the housewives who do nothing but serve their families and end up in the same situation?

    Shame on David Brooks for drawing such a terrible parallel.


  • Report this Comment On July 03, 2013, at 8:34 AM, prginww wrote:


    The kids point is a great one.

    Kids are an interesting nut. You lose control a LOT.

    It becomes a either a great connection to other people, or a source of endless hurt if one's relationship with one's kid(s) goes south.

    There is either constant inevitable progress as they successfully grow up, or a strong sense of failure.

    And related to that, they either give strong purpose/meaning, or they destroy it completely if you fail with them.

    I would add a fifth category to the four Morgan highlighted: Having your health and getting sleep. These obviously relate to having control, but I think go beyond it. Having kids also wrecks a bit of havoc on one's sleep and consequently to some extent on one's health.

    I think all of this is why Jeff Benjamin made the following statement: "The real risks in life are not the stock market. If you want risk, get married. And if you want more risk have children." (Jeff Benjamin, Investment News, April 29, 2013 (quoting behavioral finance expert Meir Statman)).



  • Report this Comment On July 03, 2013, at 5:19 PM, prginww wrote:

    Great Article..

    Here are my humble thoughts on the 4 points

    1. Control over what you're doing:-

    Certain amount of control is good. But there has to be certain level confusion and that gives a greater freedom. Certain amount of insanity is what keeps people sane.

    2. Progress in what you're pursuing:-

    We only pursue what we don't have. Lot of People in America purse for Love and People in Poor countries purse for wealth..

    Life should never be in pursuit of happiness rather it should be an expression of happiness.

    3.Connections to other people:-

    Why limit to just people. Connecting with every animate and inanimate would be much wonderful.

    4.Having purpose and meaning:-

    If we look deep, people who think too much about themselves (self absorbed) try to define purpose and meaning in life. If you take the whole existence, we are simply a piece of life which appears to be highly evolved. Attaching meanings and definitions is just keep our Ego up.

    Nothing against my favorite writer Housel, but just my 2 cents..

  • Report this Comment On July 03, 2013, at 5:27 PM, prginww wrote:

    This planet has — or rather had — a problem, which was this: most of the people living on it were unhappy for pretty much of the time. Many solutions were suggested for this problem, but most of these were largely concerned with the movement of small green pieces of paper, which was odd because on the whole it wasn't the small green pieces of paper that were unhappy.

    Douglas Adams, in The Hitchhiker's Guide to the Galaxy (1979), Introduction

  • Report this Comment On July 03, 2013, at 5:36 PM, prginww wrote:

    I am 67 stage 4 cancer. Prognosis is 6 months. That said, wife and I worked all our lives, had jobs, and owned a business for 10 years. With all that and mid 6 figure inheritance we have about 2.4 in all assets. Is that enough? Probably not with medical (even under O'bamacare), and her life expectancy of another 25 to 30 years.

    I remember an old American Express TV commercial from probably 30+ years ago starring Carl Mauldin sitting on a park bench with an overcoat on. His one question was will you have enough? That scared the H__l out of me and I have been accumulating ever since. I won't get to enjoy it, but at least I go believing my wife will be O.K. And not end up in a nursing home on Medicaid.

    Good article. Thanks

  • Report this Comment On July 03, 2013, at 5:39 PM, prginww wrote:

    Somehow, I don't think bullock is going to fall apart or probably even cares.

    On the serious side, I find many of your articles thoughtfully and intelligently crafted.

  • Report this Comment On July 03, 2013, at 5:42 PM, prginww wrote:

    I wish there was a condensed and simple checklist of items for people to do with their money. Essentially, this one page checklist would be help people plan earlier in life to reach for the next retirement goal.

    I've started putting one together myself but don't feel as though I have all the information. For example, this checklist would start off with creating a will, a power of attorney, a medical power of attorney. Next on the checklist, payoff all debt (except for maybe a vehicle or mortgage). Next, establish a money market (savings) account for 6 month (provide a formula) of emergency funds that can be liquidate quickly. Next, establish a 401k (if your employer offers one) and if possible contribute the maximum annual amount to it. Next, establish a self-directed IRA and contribute, if possible, the maximum amount to that. Next, contribute to a Roth account (again, the maximum annual amount possible). On and on it goes...with the overall theme of building a wealth management roadmap of paying yourself first and living off of the rest.

    Anyway, I believe that a checklist like this could grow and mature quickly if a few "smart people" got a hold of it. It would also provide a great starting point (goal setting) for folks in their 20's.

    Keep in mind, what I listed above is by no means a complete list or in no particular order. Like I stated earlier, I don't have all of the information and am by no means a financial planner. Just a guy searching for answers while trying to keep it simple.

    My $.02...

  • Report this Comment On July 03, 2013, at 5:42 PM, prginww wrote:

    Do I have enough money? I believe I do. Does it buy freedom? To a certain extent. Does it buy happiness? If long hours spent away from family and friends makes you happy, then money buys you happiness. On the other hand, if you look back on life and say I wish I hadn't worked as much and was around more to see my children grow up then you are poorer for the waste of time.

    Money can't buy time, once time is spent you can't get it back.

  • Report this Comment On July 03, 2013, at 5:57 PM, prginww wrote:

    I would suggest that there's more cultural and substantive value in Bullock's Academy Award than there ever was in the morally bankrupt thug she was dating. I'd look for a better example...

  • Report this Comment On July 03, 2013, at 6:04 PM, prginww wrote:

    Well, I'm 71 (in the low end of the bracket of those interviewed). I'm recently retired, and I must say I don't think I've ever read a better summary of "what's REALLY important in life". This should be REQUIRED READING for everyone just starting out. It would be revealing to know how "youngsters" would answer these questions. Maybe it's like my H.S. students, who all thought, buying their first car was going to make them wickedly happy. As if.

    As an aside, let me take exception to Schneidku40's characterization of to cost of living in Washington DC as "stupidly high". Of course, there are some seriously expensive areas, but, it is no longer the law that you must live in them. I have a 3BR condo, 15 minutes from downtown, with a sweeping view of the Capitol, Washington Monument, etc. I'd be lucky to get $400K for it. Sorry, I've seen Kansas, and, believe me, you are quite welcome to it.

  • Report this Comment On July 03, 2013, at 6:14 PM, prginww wrote:

    Brooks concludes: "If you had to take more than three seconds to think about this question, you are absolutely crazy." Yeah, Academy Award all the way! Huge numbers of people have marital issues; only an extremely small number of people have ever won an Academy Award. And the AA won't prevent you from working on your marriage.

  • Report this Comment On July 03, 2013, at 6:33 PM, prginww wrote:

    saunafool. You see nuance where I see none. Interesting. I too would take umbrage if Brooks deliberately implied such!

  • Report this Comment On July 03, 2013, at 6:37 PM, prginww wrote:

    I talked to an old guy who seemed very happy. He said "I just don't allow myself to worry about anything. Nothing."

  • Report this Comment On July 03, 2013, at 6:51 PM, prginww wrote:

    There is one or perhaps two things more important than living your life as a so called wealthy (rich) person on this planet. Know what it is?

    You will know the answer if you have been blessed with the spirit. Someone once told me, " open the brain and show me a soul and I will believe". My response was, "You can answer that yourself if you can show me what brain part drives one's life for the better compared to others. Live your life for others to be truely rich.......

  • Report this Comment On July 03, 2013, at 7:12 PM, prginww wrote:

    I am happy. Do I have enough? Good luck with anyone truly know that answer. Who knows what will happen tomorrow. I am 67 with health issues ( had to learn to walk again due to a spinal cord issue). My wife and I worked, and fairly hard, whatever that means. Raised two kids, both with Master Degrees. My wife worked as a nurse and continued her education obtaining a PhD. She loved doing this. Have we taken great worldwide vacations? Nope, but we sure had fun on the ones we did take and so did the kids. Now we are very fortunate. We play golf anytime we want, I am 10 minutes from great fly fishing, have a bunch of friends and get to help our granddaughter get an education. We are extremely happy, mainly because we try to be happy everyday. ( no we didn't always get that done, but what a great ride).

  • Report this Comment On July 03, 2013, at 7:36 PM, prginww wrote:

    Excellent piece. I was happy living out of backpack, sleeping on park benches in Barcelona, with only $500 in my pocket, because I was living out my dream of touring Europe when I was 26. After six months of this, I returned to the states and took on the major risks: Job, Marriage, Children, Mortgage. I have enough money now, but we sacrificed big time: Two of our cars have over 200,000 miles, we live in an old house, a fixer-upper, but it is paid for. No debt and lots of savings and investments give us freedom. Ultimately, I guess that is what I've always wanted: Freedom.

  • Report this Comment On July 03, 2013, at 8:20 PM, prginww wrote:

    I am one month short of my first year of retirement. I could have stayed on for a few more years and maxed out my benefits, but I figured that the stress and the wear-and-tear of the job was increasing and would kill or at least damage my health if I stayed, so I bit the bullet and did it. My biggest worry, not surprisingly, was "Would I have enough?" So, assessing after 11 months, the answer is "Yes", and the reality is that it's more than enough. I probably could have pulled the plug years earlier, but then I was still enjoying the work. It took things getting ugly from the recession to make my mind up. So I guess you could say I stayed as long as the work made me happy. When it didn't, I left. I have no regrets and all the worries I had before I did it were false. I guess that makes me a success story. Oh, and I've not spared more than a passing thought for my old job...

  • Report this Comment On July 03, 2013, at 9:25 PM, prginww wrote:

    Here are my amendments:

    Control: Can we ever really have any control? It's an illusion. Being happy comes from loving whatever is around you. And knowing it will change. And loving whatever change brings. Knowing that too will be perfect in some way even though you may not fully appreciate until later.

    Progress: Doesn't that assume judgements that the times before were worse and now they are better? May I offer that Happiness is when you know that times are just different and that life always brings you just the right thing.

    Connections to other people: Yes!

    Having purpose and meaning: Isn't this just a point of view?

    I agree that happiness is always having enough. That comes from knowing that when you let go of it, something else amazing will show up!

  • Report this Comment On July 03, 2013, at 9:46 PM, prginww wrote:

    At 72 and with 4 stents, I suppose like most retirees, I'm happy to be alive. I'm happy to have two kids and 4 grandkids that I get to interact with. Money, despite the limitations brought about by not having enough to do "everything" I'd like to do is not a driving force. If I have any regrets, they will come from what I could have or might have done to improve my relationships with people and family. Since my primary relationship is with the Lord, I'll get to see many on the other side of this life. This life is not an end all, its only the beginning. Therein lies contentment.

  • Report this Comment On July 03, 2013, at 9:56 PM, prginww wrote:

    Here's my access to happiness in every moment. Muster the balls to throw it all away. Start with absolutely nothing. Discover and experience how surprisingly easy it is to live comfortably with less than most "street people" have in this country. It will hit you between the eyes as you're sitting on a curb in the middle of the Apache Reservation in New Mexico, as I did. You'll see that survival is way easier than most have been brainwashed to believe in this country. And, you'll discover pure joy, happiness, even bliss in having nothing. Then when you come back to the "real" world, you'll always be present to overwhelming gratitude and appreciation for the most simple things. Like your next breath, or a glass of water from the tap.

  • Report this Comment On July 03, 2013, at 10:29 PM, prginww wrote:

    Try summarizing happiness this way: Commitment, challenge, control, connections. Use them all to make the world a better place because you were here.--Tom Reilly

  • Report this Comment On July 03, 2013, at 10:35 PM, prginww wrote:

    I love this quote

    "The happiest man is not the one who has the most but the one who needs the least."


  • Report this Comment On July 03, 2013, at 10:42 PM, prginww wrote:

    Morgan...I, like so many others, greatly enjoy your thought provoking and intellectual articles. This article is especially thought provoking for me since I will turn 70 in two weeks and am still working at a job that is better than I could have ever imagined. I get paid very well and have total control over my time. I have been very conservative with my investments and think that I will be able to purchase the place my wife and I will retire in, sell our current home, which is way too big, and pay off the mortgage on our final residence. For me enough is having planned as best you can to financially meet your needs until you pass on, leave enough for your spouse if you die before your spouse does and not end up with some catastrophic medical expense that drains all your resources. I would add one other happiness goal to your 4 goals, have a wonderful, fulfilling marriage and caring, loving children. Keep the wonderful articles coming....

  • Report this Comment On July 03, 2013, at 10:45 PM, prginww wrote:

    I think we all would like to get to a place where we feel we can provide a comfortable living for ourselves and our family, no matter what happens in the economy. I got to that place thirty years ago.

    But, it has been unbelievable what has happened in the economy, plus we don't know what the future holds from this point on.

    I'm still in fine shape, but, I now realize that, unless one accumulates a net worth of $20,000,000, or more, in today's dollars, there is no such thing as immunity from forces over which we have no control.

    Enjoy what you have, but be ever vigilant.

  • Report this Comment On July 03, 2013, at 11:24 PM, prginww wrote:


    I'm a father and I have a beautiful, free spirited 3 year old daughter. Before I had my first daughter, it didn't bother me if my wife and I would ever have a children. Once my first daughter was born, I felt my life was complete. It's the most wonderful' joyous feeling ever. I'm more happier than ever in my life because of my wife and my daughter. Children bring so much joy and it's worth every negligible sacrifice I make, some of which u mentioned. I still make time for my self and for my's all about balance, but my family, faith in god is the most thing in my life. Not wanting to do whatever I want anytime I want or work too much where I don't have time to enjoy my family. My wife and I would love to have 2 or 3 more children and we r working on it. Yes, u make sacrifice s when raising children, but it's worth every second.

    To me I just can see why parents would me less unhappy when they have kids compared to not having kids. More than 99% of people I know who have kids are happier than without kids.

  • Report this Comment On July 03, 2013, at 11:38 PM, prginww wrote:

    Ah, Mr. Hausel, another fine, inspirational piece! Made more so, because I loved, printed off, have kept, and read parts of your March 4, 2011 article, "When Rich People Do Stupid Things," shortly after it appeared to the five Weight Watchers groups I lead. I read selected sections in order to get to the second-to-last paragraph wherein you stated the same four what-makes-us-happy criteria that appear in this article. Everyone in my groups agreed that having control over their eating and actions, progress toward a weight or other goal, connecting to others in the group, and creating purpose and meaning have all been instrumental in their weight-loss journies and hallmarks of Weight Watchers for 50 years. (I have also followed the stories of the criminal sentencing of Rajat Gupta and, perhaps, Raj Rajaratnam, names from your article of two years ago.) Does money make me happy? Yes -- I am grateful that I don't have to worry about whether I can afford to get something I want. It also feels good to know the difference between "need" and "want." Do I have enough? Absolutely! Am I rich? According to what my attorney and financial planner tell me, yes. Do I "feel rich?" Absolutely not. I am happy with my life and grateful for all I have been given by God.

  • Report this Comment On July 04, 2013, at 12:23 AM, prginww wrote:

    He who dies with the most toys still dies...

    Work to live...don't live to work...

    Take time to smell the flowers...

    Fast money sprouts wings towards Heaven...

    A fool and his money are soon parted...but not a Motley Fool!

  • Report this Comment On July 04, 2013, at 12:26 AM, prginww wrote:

    Money in the hands of stupid people is dangerous...

    Napoleon Hill

  • Report this Comment On July 04, 2013, at 12:42 AM, prginww wrote:

    I agree with Megatron1, children are the greatest gift we can be been given! Do they restrict your freedom? Sure they do, my life isn't my own to determine exactly what I want to do when I want to do it. Yes, It can frustrating at times but life isn't perfect, there are always tradeoffs in every decision we make and every path we follow. The joy a child brings far outweighs any negatives in my book and I wouldn't trade them for anything.

    Regarding wealth and do we have enough, I read a book back in my 20's (I'm in my 40's now) called "The Wealthy Barber". It is a simple book and it basically preaches the pay yourself first method and do it consistently over time. I've been following it for the past 2 decades and to many I may now be considered wealthy, to others, not so much. Wealth really is a relative term. I have a roof over my head, a healthy family, and have enough savings that I don't worry about whether the car breaks down tomorrow or not. All in all, I'm happy and satisfied, especially when I think that most of us today in the developed world have more than most humans have had over the entire course of our existence. How can we really complain about that? Would I prefer to have been born in the Middle Ages or some other time period (the answer is NO)? I choose to be happy.

  • Report this Comment On July 04, 2013, at 12:57 AM, prginww wrote:

    TMFHousel hits another home run.

    control, progress, connection, purpose...

    If you think about all of these you can answer them something like Mr. Heller answered the one about money.

    The best thing in life is satisfaction, and 'being satisfied' is a moving target just like how much money is enough. It's largely determined between your ears.

    When I was a teenager, I wanted a Jaguar XKE. I never got one, but the old, used family Volvo i got (and they weren't particularly upscale in 1969) made me very happy.

    The blue collar job that got me pretty good pay, and plenty of time for the family as well as vacation time, but not much respect from XKE drivers was really a marvelous 32 year run (three employers). I was (or felt) necessary, useful, and appreciated.

    I met a guy complaining about his 'wasted life' once, and pointed out that he had raised three kids, still had the same wife (that still made love to him), had a house, an income, and so on. He seemed to feel somewhat better, but I'm guessing in a day he was right back to his old bad habits, and they DO become habits, so smile more, and try to feel satisfied.

  • Report this Comment On July 04, 2013, at 2:21 AM, prginww wrote:

    mbivy - You got it exactly right - Good for you !

    I am a corporate executive retired for 10 years - healthy - 73 - with a loving wife and children. I drive a 12 year old BMW . Live in a town house on which I owe nothing and my investment income is no big deal , but sufficient for our needs.

    I am happy !

  • Report this Comment On July 04, 2013, at 2:47 AM, prginww wrote:

    Having children makes you focus on their need which answers the observations about giving to others. You can do this the right way or the wrong. I will explain.

    I have 2 children from a first marriage. We had them when I was still studying to be a professional architect. We were financially crippled and I focused on trying to provide a house, car furniture and all the pieces that go with raising modern day children. I was doing this while working 5 days in 4 (7am to 9pm) university part time 1 day a week and my weekends and holidays spent in my garage churning out the coursework for the architecture education. The stress in the end broke me.

    I had all the aspirations about where we needed to live so that my children could go to the best schools, in the best areas to live so they had respectable friends and not fall in with the wrong crowd etc…. and where an architect could conceivably allow oneself to live.

    When my wife finally asked me to leave as my depression (you only know this after the event) was having such a negative impact on all of us, one of the first things I remember was the sense of release from all the stress of the mantra of house, car, kids. I no longer had to worry about the price of the house and where we lived. Unfortunately the depression about ‘providing’ changed to depression about not being with the children. But then, I never had been – had I?

    The next 10 years I lived in squalor. I would see me children every other weekend where I had to take them to my parents’ house as my living arrangements where not appropriate. However, there were times I had to take them home and even to this day they laugh about the broken stairs, the bare floorboards with nails hanging out, the bathroom with a hole in the floor down to the kitchen, the clapped out old car that we wondered if it would make the end of the street, yet alone the 80 mile drive to my parents’ house. My ex-wife quickly remarried and still lives in our ex-marital home. Visiting the children there was not an option.

    This time allowed me to repair me. I did manage to travel a little bit but only for 2 weeks at a time because I was still financially committed to provide maintenance money for the children and my ex-wife. I managed to become a fully qualified architect. However, what with maintenance money, the debt that I took from our marriage (and I took all of it), finishing my education and the additional money to sustain me (just), I was in a really bad financial state. Spiritually though I was on the mend. This time taught me some valuable lessons. The thing that hurts the most though was the time I lost not being with my children to watch them grow each day. Not being the guy who taught them to ride their bikes or pick them up when they fell off. Not being the guy to take my son to his first football game, the noise of the crowd, the greenness of the grass….

    This time also taught me that one should not be reckless about money, but one can live with less and you need to live in ‘the now’ and worry less about retirement (I’m not saying don’t worry at all). To ‘over’ worry now is to place yourself in all the same stress as before about buying houses etc.. but just on a different subject - retirement.

    Also in these last 5 years I have lost some friends whose lives were taken much before their time. This brings life into sharp focus. You don’t know what is around the corner, but I don’t want any regrets when that time comes. Not having a pile of cash will not be a regret for me.

    I remember having one of those Friday afternoon/evening drinks at work and was talking to a colleague over a glass of wine. She was telling me that she was about to move to a new area because her and her husband had aspirations for her teenage daughters to go to university and so this school in that district had a better reputation for exam results etc…… I replied, good for you. Is it what your daughters want? She stopped in her tracks and gave me this most awful gaze. She had no idea.

    I then told her that after what my children had been through with separated parents, my only aspiration for them was to be happy. Usually that just meant getting valuable time with me. That’s as much as I was able to control anymore. The truth is that it is all they ever wanted. They didn’t even care about my squalor. They just wanted to spend time with me. This is even true of my own parents. They haven’t a penny in savings. They spent all their time with me and my sister. They are my best friends and most precious commodity. How did I manage to get this all so terribly wrong?

    So now I am remarried. I have a 2 year old son (he is amazing!). I have only now just paid off all my debt and I am now building to a future that will enable me to work less and spend more time with him.

    So what is enough?

    Enough for me will be when I can sustain myself without having to work too much so that I can be around for this son to teach him to ride a bike and take him to his first football game. I’ve resigned myself to the fact I’m never going to have a Palace or a Rolls Royce. However, I’m not going to waste my second chance. Also, I had better get to that place soon because my son from my first marriage is approaching 18 and will need me around when he has children for sure. I’m planning to be available for him and his sister in that period of their lives and hopefully this will make up for the time we missed when they were small.

  • Report this Comment On July 04, 2013, at 2:53 AM, prginww wrote:

    How much do I need to be happy? Enough to maintain current lifestyle/standard of living +15%.

    Will that in itself make me happy? Probably not. But, not having to worry about generating adequate revenue to meet the physical needs of my family would free me to concentrate on my spiritual and emotional satisfaction.

    No matter what mental tricks you teach yourself, it's much more difficult to be happy when you're concerned with where your next meal is coming from and where you're going to sleep tonite.

  • Report this Comment On July 04, 2013, at 4:01 AM, prginww wrote:

    The math behind "enough" is compelling.

    you need to save ~25x of your spending rate to maintain complete financial independence from a job (less if over 60). (some might argue 30x).

    This means that for every extra dollar of spending habit you must save $25 to continue that spending habit.

    So don't get in the habit of spending. The less you habitually spend, the earlier you achieve independence.

  • Report this Comment On July 04, 2013, at 10:11 AM, prginww wrote:

    Hi Morgan, I'm there. Got "there" at 51. Thought about which ten years of the rest of my life would be the healthiest and sold my company the next day. Kept teaching. Retired from that at 61. Things are nearly perfect. turf125

  • Report this Comment On July 04, 2013, at 10:48 AM, prginww wrote:

    The quandry of 'enough' has been with us a long time. Jean-Pierre Vernant very well summarized the Greek view: "Ultimately wealth has no object but becomes its own end, a univeral, insatiable, boundless craving that nothing will ever be able to assuage." This insight I obtained from my favorite professor, Dr. S. Todd Lowry in the commerce school at Washington & Lee University, who authored the book, "The Archaeology of Economic Ideas: The Classical Greek Condition". The Greek view was accurate then and it remains applicable today.

  • Report this Comment On July 04, 2013, at 1:11 PM, prginww wrote:

    First, money does not bring happiness. It can however allow you access to the elements that provide a more comfortable existence (happiness??).

    In a vacuum, true happiness is first achieved by accomplishment, i.e. setting goals and achieving them. If your financial goal is $1M and you achieve it, you have a measure of accomplishment.

    True happiness is being comfortable in yourself, having a support system of a spouse or significant other that loves you, a family of children and friends and knowing that you have achieved a majority of your personal goals.

  • Report this Comment On July 04, 2013, at 2:53 PM, prginww wrote:

    Good Balanced Article looking at both sides of the coin. "He who lusts after silver will never be satisfied with silver, and he who lusts after gold will never be satisfied with gold." (Ecclesiates 5:10)

  • Report this Comment On July 04, 2013, at 9:05 PM, prginww wrote:

    Thanks for the recent series on Kahneman's work.

    I think in a few of his studies he's shown income's contribution to happiness saturates around $75,000, though I saw him give a talk where he stated this saturation point needs to be modified based on one's environment (ala 75k in NYC is different from 75k in Mobile AL, is different from 75k in an upper class neighborhood is different than 75k in a lower class neighborhood). The take home message is happiness saturates when you make a fair amount more than those you tend to associate with.

  • Report this Comment On July 05, 2013, at 9:18 AM, prginww wrote:

    Or you can take what Ray Liotta's character said in the movie Blow and just realize that:

    "money isn't real"

    When you figure out what those 3 words truly mean, you will be far closer to knowing the meaning of life than 99% of the population.


  • Report this Comment On July 05, 2013, at 10:01 AM, prginww wrote:

    Stuartrudd, Thanks for your story and may it continue to bless you. It is obvious that as you have learned, you have tried to pass on to others the futility of what brought you grief. When children become trophies, you have missed the boat.

  • Report this Comment On July 05, 2013, at 11:26 AM, prginww wrote:

    I am currently in my early twenties and in the final year of graduate school. This article has come at a great time for me as it is something to consider as I venture into the work force. I too believe that money can't buy you happiness but coming from 5 going on 6 years of financial "struggle", making 10-14 dollars an hour on a part-time basis... No money can be just as bad as having too much money! I would argue that money can bring comfort and a way for you to reach the goals that you have set for yourself. Starpark88 I have heard of Kahneman's work and I can agree that depending on where you are and what your desired standard of living is 75,000 dollars a year for a single person is a great thing. All in all, personally I would be happy with a resonable salary that allows me to, travel, live comfortably, comfortable support a family and have freedom to do the things I want to do. I don't need a million dollars or even 500,000 a year to have the aformentioned things. Any advice?

  • Report this Comment On July 05, 2013, at 12:45 PM, prginww wrote:

    I am 22, have been trading for approximately 2-3 years, but overall I am up nearly 50%. I feel that as long as I can beat the APY on banks (which is a joke) and beat the markets (Not that hard) I will be OK. I need other people my age to believe the same thing. I am studying accounting and many people my age have no idea what I am doing but they want a piece of the action (money). I just hope in the end this will change the younger generations view to understand trading isn't just good for them.

    Nice article Housel.

  • Report this Comment On July 05, 2013, at 7:03 PM, prginww wrote:


    Over the last three years, the s&p 500 has been compounding at an annualized rate of 17.74%. Thus, you are deluding yourself if you believe you have been beating the "market." .....and this simple fact ignores the anxiety, brokerage fees, trading commissions, and capital gains taxes which you have, without question, accumulated along the way.

    Using both arithmetic and Logic, it is impossible to trade in and out of index that is compounding at 17.74% (equities), into an asset class that yields 0% (cash), over a three year period and come out ahead of 17.74%.

    I agree that many young people your age have no idea what they're doing. If I were you, I would add myself to that list.

    History has clearly and repeatedly demonstrated that arrogance is far more of a liability than an asset in this business.

    Good day.

  • Report this Comment On July 06, 2013, at 11:44 PM, prginww wrote:

    The principle of diminishing returns is in effect here with happiness and money. I want my income to increase to keep up with basic living expenses.

  • Report this Comment On July 07, 2013, at 6:52 PM, prginww wrote:

    Morgan, I would have hoped you left investment banking for moral reasons than for lifestyle.

    If I could save a million dollars over 5 years of miserable work I would take it.

    According to Forbes 70% of Americans hate their jobs anyway. If you have the luxury of a fulfilling career consider yourself lucky. Most people work just to make it to the weekend.

  • Report this Comment On July 08, 2013, at 10:18 AM, prginww wrote:

    To me there is one thing more valuable and finite than money and that is time. This article hits the nail on the head when discussing the drawbacks of being an investment banker. Money can always be remade, but time can never be recovered once lost. There has to be a balance between making money and enjoying life, I would rather be comfortable and financially independent with great memories of my past than be filthy rich and look back on life and all the things I missed, Just my opinion though. Great article as always.

  • Report this Comment On July 08, 2013, at 11:15 AM, prginww wrote:

    This has been idealized and over-simplified.

    The cliche of money and time. If you want to think deep (as was Mikecart1 mentioned) neither is real.

    When I am in Mexico I watch the fisherman getting up at 5 am to return to the drudgery of their daily catch. I vacation there to do the same thing as they but I am paying them because I enjoy it - but I wouldn't enjoy it if I had to do it every day for a living.

    Work is work.

    (And once again DaveandRae is great with money because he cuts his own hair)

  • Report this Comment On July 08, 2013, at 8:23 PM, prginww wrote:

    Speaking of which....

    I recently read that Chad Johnson, the flamboyant former NFL wide receiver, spends 250 bucks a month on "grooming." .........and he's both BALD and unemployed!!!

    It should come as no surprise to the reader that people like him are burning through 45,000, or the equivalent of 1% of his net worth, per month. Thus, at the rate he's going, he'll be broke in about 8 years in spite of having a present net worth of 4.7 million.

    Evel Knivel made 58 million over his career. Guess what? he still died a destitute, old, man. Why? Because he spent 63 million over the same time period.

    That is a very, powerful, life, lesson

    The great philosopher Seneca once said, "the wealthy man is the one who has attuned himself to his limited means"

    Think about for a moment.

    I do everyday.

    No matter how much money you have, if you're not "in tune" with it can, and cannot do for you, its only a matter of time before you blow through it all.


  • Report this Comment On July 09, 2013, at 11:13 AM, prginww wrote:

    ^ Wealth as a bucket of water with a hole in the bottom. The size of the hole is how much you spend. If your bucket is full you feel wealthy (even if it is not a large bucket).

    Maybe the investment banker walks around with a HUGE bucket that is too big to ever fill. No satisfaction.

  • Report this Comment On July 09, 2013, at 2:15 PM, prginww wrote:

    I respectfully disagree.

    Wealth is not a proverbial "bucket of water" Nor is wealth, as it has been clearly demonstrated, over, and over and over again, a bunch of zero's in your Merrill Lynch account.

    Wealth is simply, freedom.

    The financial freedom to tell someone, "NO"...I don't have to work for you, or anyone else for that matter, if I don't want to.

    I got a taste of such a freedom this very year when my business partner and I took the entire month of January off due to her surgery. We had prepared for this long in advance so I took my family skiing, painted and re-tiled my entire bedroom bathroom, painted my bedroom ceiling, trim, AND replaced all of my bedding sheets too.

    Since that time, my investment portfolio has appreciated by 13.84%, of spite of our business decision. Thus, glory to God, my "bucket" is flowing over.

    Once again, at the end of the day, it doesn't matter how big your "bucket" is. If you're not free, you're not wealthy.

    Good day :-)

  • Report this Comment On July 10, 2013, at 3:43 PM, prginww wrote:


    Thanks for reminding me I wasn't in the market earlier. I started my own account in March of 2011, the lowest point for the S&P then, was $1300 (gentaleman's) and today looking now it's $1656 (High). You are right sir! I have no idea what I am doing, all I am saying is I know a bit more than some. NOBODY knows what will happen with markets. I wish I got into the market when my father told me when I was a child,I would know more, shame on me.

    But in January when you spent all that cash, If you threw that to me I could have invested that for you and flipped it more than 13%. Since that time, I am at 20% (without dividends) without having enough money to be able to play with!

    but I could do better...

  • Report this Comment On July 11, 2013, at 2:37 PM, prginww wrote:

    Hey daveandrae,

    your last two comments also conflict... If you were to take months off of work, go family skiing, paint and re-tile the entire bedroom bathroom, paint the bedroom ceiling, trim, and replace all of the bedding sheets "TOO", every year I'm sure you would be as broke as Chad Johnson in 8 years.

    Quick update from yesturday, since I started my CAGR is 22.276%, I think that that is a lot better than 17.74%. I know I am arrogant, but not bad eyy?

    ... Yet still, I could do better

  • Report this Comment On December 06, 2013, at 7:27 PM, prginww wrote:

    How to become RICH--Stop spending your money!

    How much money do you need?

    Just a few dollars more!

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