June 17, 2024
Money can't make you happy, but it can make you rich

“Money cannot buy you happiness” goes the saying.

Jorgen Vik

But it doesn’t mean money is worthless.

Numerous studies have found that people with higher incomes tend to be happier overall.

Which makes sense; not worrying about paying the bills or what to do if the car dies take a load off.

But the more money we have, the less value an additional dollar may add to our mood; the old “diminishing returns” thing.

And the value of money isn’t just the ability to buy more stuff.

More money may also introduce us to more choices.

What neighborhood to live in, sending children to college, keeping up with more expensive car maintenance schedules at the local dealership.

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Another set of choices relates to our time.

Some abhor yard work. If you have the money, you may pay someone else to do it.

You get to enjoy a beautiful yard, and rather than mulch and mow, you might have spent time with good friends over lunch.

Then, there’s expectations.

We may be influenced by our childhood environments in that we expect something similar for ourselves.

The wealthy child growing into a lower, yet middle-class, lifestyle may feel deprived in a way the poor child with the same adult lifestyle does not.

I think our nature plays a role, too. It really is personal.

Some are more prone to worry than others.

Some want certainty of reaching a specific amount of money before they feel they have enough, while others will look at their amount and decide to make it enough.

Beware though: When assessing money-happiness studies, there’s a risk of getting the direction of influence wrong.

It could be that innate happiness leads to more money simply because the happier person, worrying less, feels freer to purse her ambitions which again could lead to higher remuneration.

In the end, we all wish to be happy. Money can certainly help in allowing us to avoid harder choices and circumstances, but I believe inner peace requires far more than money.

Do your best, and don’t beat yourself up when life serves you a curveball.

Jorgen Vik is a certified financial planner and partner with SKV Group LLC. Investment products and services are offered through Wells Fargo Advisors Financial Network. SKV Group is a separate entity from WFAFN.

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