There’s a happiness conundrum that needs solving. Despite living in a rich country with income levels that put us in the top 1% in the world, there are still many unhappy people. This post explores what we can do to elevate our happiness.
After a tense 14-12 softball victory, five of my teammates and I went to a nearby brewery for some beers and burgers. I ended up sitting next to our centerfielder who told me he used to hate his life. Let’s call him Biff.
In high school, Biff was a popular guy. At 6′ 5″ tall, he played varsity baseball and varsity basketball. But he admitted he was sometimes cruel to the smaller kids and exchange students. He wasn’t proud of his actions and wished he could apologize to them today.
After the financial crisis hit in 2008, Biff fell into a deep depression. He was told he couldn’t lose and that real estate was the surefire way to riches.
But, the house he had bought when he was 27 years old ended up losing half its value. Not only had he lost all his equity, but he also owed more than the house was worth.
He was so deep under water, all he wanted to do was turn in his keys and walk away as so many Americans did. There was just one problem. Florida was not a non-recourse state. As such, the lender could easily obtain a deficiency judgment and garish his future wages and non-exempt assets.
He was in a full on happiness conundrum and was miserable. Biff proceeded to gain over 100 pounds as he literally locked himself within his rapidly depreciating prison. At 30, he was morbidly obese, broke, and girlfriend-less. Life had no more meaning to him.
Solving The Happiness Conundrum
Then one day out of the blue, the state of Florida threw him a lifeline by offering him a free $75,000 to pay off some of his mortgage if he promised to keep up with regular payments. He took advantage of this tax payer’s money and fulfilled his side of the deal.
Despite feeling a little guilty for getting a bailout, Biff started gaining positive momentum in his life again. His happiness conundrum was slowly getting solved.
Over the ensuing two years, he lost 70 pounds, got a promotion, and finally at 32 found a girlfriend. He also stopped hating on anybody who seemed to be doing better than him because he was finally in a better place.
The first step to him feeling happy was to make sure his finances were no longer going in reverse. Once his finances had stabilized, Biff’s happiness grew because he found someone who loved him despite all his flaws. Today they are married and have a daughter.
Being rich didn’t matter anymore to Biff. Making progress did. Oh, and being able to crush a softball 350 feet as our cleanup hitter makes Biff and the rest of the team ecstatic.
Understanding The Happiness Conundrum
People say money doesn’t buy happiness because it’s true. After you make enough to comfortably survive, whether it’s $75,000 in Kansas City or $250,000 in San Francisco, having more money seldom significantly moves the happiness needle.
The World Happiness Report 2020 ranked Finland as the happiest country in the world. The report highlighted six significant factors which contribute to happiness: GDP per capita, social support, life expectancy, freedom to make life choices, generosity and corruption levels.
Despite the United States having by far the highest GDP in the world, the United States ranked only 18th in the survey. What a conundrum to be so rich, yet so thoroughly average in the happiness ranking.
Reasons For The Happiness Conundrum
Some of the reasons attributed to why Americans were not happier included: wealth inequality, obesity, substance abuse, and depression.
On a GDP per capita basis, the United States ranks about 19, which is in line with its happiness ranking. However, GDP per capita alone doesn’t neatly explain why more of the wealthiest countries aren’t in the top 10.
For example, Singapore has a per capita GDP of $93,900, yet ranks 34th in the latest World Happiness Report. The reason is probably because its too damn humid in Singapore!
Money And Happiness Are Loosely Correlated
Happiness is subjective and extremely difficult to quantify. But based on the data, it’s clear that money is only one part of the happiness equation.
In my opinion, money takes up at most 40% of determining your level of happiness. Once you get to the level where you have enough money to do what you want, your 40% is maxed out.
The remaining 60% that determines your happiness has to do with family, friends, and accomplishments. If money was a predominant happiness indicator, billionaires would never cry, never suffer, and definitely never get divorced.
What I realize today is that I’ve spent too much time trying to help readers and myself optimize the 40%, and not enough time trying to optimize the other 60%. One of Financial Samurai’s main goals, after all, is to help readers lead happier lives.
So, for the remainder of this post, let’s talk about the other 60%. As I get older, I expect the types of posts I write will correlate more closely to the percentages I believe make up our happiness levels.
Related: Why The Smartest Countries Aren’t The Happiest
Things To Help Solve The Happiness Conundrum
Out of all the things that can help solve the happiness conundrum, here are my top five.
1) Having independence
Independence grows over time. The first taste of independence usually comes when you’re able to live on your own without parental assistance. Perhaps it’s going away to school or landing your first job.
Independence continues to grow once you start gaining respect and mastery at your job. The better you are at your job, generally the more leeway you’re given to do what you want. You might eventually get promoted to run a team or a department, giving you even more independence.
You finally gain maximum independence when you no longer have to report to anybody. Most think retirement is the ultimate goal. But based on my experience, retirement isn’t a cure-all for happiness.
Some people believe that entrepreneurship leads to maximum independence. Instead, entrepreneurship can lead to tremendous dependence if you hire workers and take in investors. What people really want is a profitable, bootstrapped solo-business or the financial independence to do whatever without caring about money.
My situation:
Although I was basically a grunt at my first job in NYC and had zero independence, I was grateful to just have a job. After about six months of appreciating employment, my happiness took a dive due to the 12-14 hour days. Happiness level: 6/10.
When I switched jobs and moved to San Francisco, my happiness took a tick higher because I was in a satellite office that offered more independence. My boss and I were a unit that covered west coast clients so there was much more independence compared to being at the NYC headquarters. Happiness level: 7.5/10.
Once my boss left to become a client, I gained even more independence. But I also felt a lot more pressure to maintain the business and eventually grow it. Therefore, my happiness remained steady or might have even taken a tick down, despite higher pay and title. Happiness level: 7/10.
It was only after I negotiated a severance in 2012 did my happiness level creep up to an 8/10 and has remained at roughly this level with temporary spikes to 10. I knew what I wanted to do post work and pursued it with abandon.
2) Having supportive parents and relatives
No matter how much of a knucklehead you are, most family members will provide unconditional love and forgiveness. They will support you no matter what.
It is estimated that the average friendship lasts only seven years because life gets in the way. While friends come and go, family members last for much longer. We must make an effort to regularly keep in touch with our parents and siblings.
My situation:
When I got in deep trouble in high school, they didn’t further chastise me. Instead, they provided comfort during a time of great distress. When it was time to find a job, I remember my dad doing his best to introduce me to many of his acquaintances he got to know while working in Asia.
When I wanted to leave for a new job for more money in NYC after 10 years with my existing firm, my mom counseled me not to join because she knew the misery wouldn’t be worth it. During the year leading up to leaving my job, my parents didn’t say I was crazy. They were supportive and helped me think things through.
Finally, when it came time to settle down, my parents welcomed my wife with open arms. I always wondered whether they’d try to push me towards a certain type of person like some parents do, but they did not.
I am so appreciative that my parents always provided counsel and never put up roadblocks whenever I made a decision. Having them in my adult life for so long has been a blessing. Losing them will be incredibly difficult.
3) Having your own family
If you are lucky to find a life partner, there is nobody you will love more in this world. If you want and have children, the amount of joy you will experience is beyond anything you can imagine.
I understand that not everybody wants children. In fact, 10% of you in my survey said you did not. That’s absolutely fine. Having a family made up of just you and your soulmate is incredibly powerful. Make it your mission to find someone who loves you as much as you love them.
My situation:
I lucked out and met my wife when I was a senior in college. Because I met my wife so early, I’ve always had this minimum elevated level of contentment. I knew that worst case, if I could only make minimum wage working at McDonald’s, at least I’d have her in my life and we’d make things work.
When we finally had our boy in 2017, my happiness temporarily rocketed to a 10+. It was as if I had unlocked a new feeling that remained hidden for decades.
But as many first-time stay at home parents know, taking care of a little one is very difficult for the first several years. Therefore, my happiness has faded back down to about an 8 on average and sometimes down to a 7 when my boy’s temper tantrums are out of control. Even so, I’d never give him up for the world.
Be forewarned. If your relationship is rocky before kids, having a kid will likely expedite an impending breakup.
Oh, I must now mention our daughter, who arrived six months after I wrote this post. She is an incredible blessing and I feel so thankful to have her. Her warmth and personality are wonderful.
4) The ability to stand up for yourself
One of the worst feelings is getting bullied and not being able to do anything about it. I saw this a lot as a minority growing up in Virginia.
In school, you might get picked on by a bigger kid. You want to fight back, but you’re afraid of getting seriously injured. You rationalize that it’s better to give him your lunch money and starve than face his wrath.
At work, you might get tormented by a senior colleague. You want to tell her to stop, but you’re afraid of getting a bad review. You need the money because you just bought a home.
Online, you’re afraid to say what you truly think out of fear of getting ridiculed. As a result, you keep quiet and join a mob that bullies others for thinking differently. The fear of standing up for yourself and others is one of the reasons why bad things stay bad for a very long time.
My situation:
Ever since I was in elementary school, I had the courage to fight back against bullies. I got in plenty of fist fights because I didn’t allow anybody to push me around or call me names.
I learned as a kid that once you stand up for yourself, even if you take a few blows, the bullies eventually stop. Some may even apologize. The repercussions were a couple suspensions, multiple trips to the principal’s office, and a few bruises. But it always felt great to defend my honor.
I’ve carried this attitude of standing up for myself throughout my entire adult life. When there was BS happening at work, I spoke up, often to my own detriment. I didn’t appreciate nepotism and often challenged senior employees whom I did not respect. This was not a good career strategy. When the big bosses in my corner were eventually pushed out, I was left with fewer backers.
Online situation
Online, this site has grown large enough to attract unfortunately some hateful comments every week from people like the old Biff. Even if only 0.1% of the people hate your guts, however, that’s 1,000 people a month if you receive 1 million visitors a month.
I generally just delete 99% of the bad comments. But if there’s a particular commenter who keeps badgering me then I may take a stand because I’m thinking about the world my son will face growing up. As a parent, I see it as my duty to break the cycle of racism and hate.
One of the best benefits of being unemployed is that you can never get fired. So many people end up ruining their careers based on what they say and do online. Being able to stand up for yourself is definitely one of the biggest benefits of financial independence.
Standing up for yourself can initially feel scary. But the more you practice, the easier it will get.
5) Doing work that is helpful to others
One of the reasons why ~70% of people are disengaged at work is because they know what they do is probably not very helpful to society.
Imagine working at PepsiCo, whose entire goal is to sell sugary drinks and processed foods to get Americans addicted and sick. That can’t feel good given our obesity epidemic. Imagine working at Juul, whose main goal is to get adults and teenagers hooked on vaporized nicotine.
On the other hand, if you create or do something that’s helpful to others, you will feel extremely wealthy. Talk to veteran nurses, teachers, firefighters, and social workers. Many will glow about their rewarding careers.
My situation:
Before 9/11 happened, it felt great working in finance in NYC. After 9/11, I felt a tremendous amount of sadness. Suddenly, nothing I did at work mattered anymore compared to what the brave first responders did to try and rescue the people trapped in the World Trade Centers.
I wanted to join the U.S. Foreign Service like my parents and serve my country. But I did not because I was not smart enough or motivated enough to pass the Foreign Service entrance exam.
It took at least three years to get over my disillusionment of working in finance. During this time, I went to business school part-time, partly to see if I could gain some knowledge to do something else.
But part of the deal for having my tuition paid for was to continue working at my firm for at least two years after graduation. During this time, the financial crisis had hit in 2008 and there was nowhere I could go. The best I could do was hold on tight for my employment life as I had taken out a $1.1 million mortgage in 2006.
The 2008-2009 financial crisis forced me to once again re-assess what I wanted to do with my life. I wanted out but didn’t know what to do. I was in a happiness conundrum myself. So, I started Financial Samurai to help figure things out. Happiness level: 5.5/10.
Solving The Happiness Conundrum With Financial Samurai
It was not until 2011 that I decided that my biggest joy was writing and helping people get their finances straight. By then, Financial Samurai was constantly on my mind even while I was at work. So in 2012 I finally said goodbye to my employer.
The thing that has helped keep me going for so long has been the consistently positive feedback I get from readers that outnumber the negative feedback 200 to 1.
Over the past 10 years I’ve witnessed readers eradicate their debt, fix their spending habits, buy their first homes, leave toxic work environments, create thriving side hustles, build substantial retirement portfolios, start families and so much more. It’s been a wonderful journey and a treat to hear from each one of you.
Happiness level: 8/10.
Feeling Happy Is Worth The Effort
Hopefully this post has helped you solve your happiness conundrum. It certainly has made me think about what’s most important in life.
Before you reach financial independence you might get tricked into believing that money is the main reason why people are happy. It’s easy to lose sight of all the other things on your quest for greater wealth.
However, you can be the richest person in the world, but if you have nobody to share your fortune with, I doubt you’ll be happier than someone making $40,000 a year in a job in which he or she loves and who has a loving partner and supportive friends in real life.
For the sake of happiness, it’s worth staying fit, finding people in real life who love us as much as we love them, and doing something that’s helpful to others. Who knows. You might even reach a point where you’re so happy that money starts pouring in as a byproduct!
I’d love to hear your thoughts on how much money plays a role in your overall happiness. Do you believe there is a happiness conundrum? What are some other important things that make you incredibly happy? What are some things you notice happy people do that unhappy people don’t do?
Update 2021: The global pandemic and being cooped up at home for so long has really hammered home the importance of family and good relationships. Having money is nice, but having good friends and a loving family is so much better.
Unfortunately, I caught up with Biff at batting practice and he had gained back a lot of weight. He said he broke up with his girlfriend in July, but didn’t explain why. He was just happy to be out of the house and bashing balls again.
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Great post Sam. With a logical layout of data to relate or should I say unrelate happiness and money.
A bit of humility goes a long way toward feeling satisfied with one’s life. You don’t have to look very far to see others struggling with debt, health, or family problems to appreciate how blessed you are. Happiness comes not from having more than everyone else, but rather from enjoying what you have.
Hi Sam + readers, your blog and comments just go on getting better and better, so thanks to all from perfidious Albion.
It can be quite hard for us over here to relate to what seem like huge salaries (not to mention ‘compensation’, a hilarious term to me personally) over there, compared to what’s available to us. However, there have also been envious comments about our low income tax regime compared to yours, but the relatively modest advantage we have there is hugely overshadowed later on by essentially lifelong free healthcare; overall you probably can access more money in retirement owing to the MUCH lower rates of tax on inherited income/deferred salary pensions, so for the majority it’s probably a wash.
This is likely true of other aspects of life, like the weather as referred to in the comments section, which probably looms larger in our lives than yours – I’d never go to live in Canada or any of the Nordic countries, which are not only cold but dark for much of the year. Equally, I have lived in the tropics, but wouldn’t go back there in retirement. Places change, but have to admit that I did like Hawaii.
I’m currently retired for the third time, and think I’ve done enough to stay that way; no kids, sadly gone-before SO, so as for so many family and friends are now more important than anything else, along with the health to enjoy their company.
Clearly keeping active and alert into old age should probably be the primary goal now, and learning something every day is therefore important, and being grateful for what I have/achieved too. I love your definition of Nirvana, and the expression ‘happy as a clam’ to me quantifies that (if Nirvana can be quantified at all). This is b/c happiness and contentment are very different things; happiness is fleeting, that timeless moment of joy, whereas contentment is having enough of whatever you need and the knowledge that you have it, to me.
My guess would be that the differing percentages per country shown for the various aspects you have considered are largely down to local conditions, just as you’d expect, so a fascinating insight. Thanks again to all.
I think you are spot on that money is not a majority component of happiness. I noted that you had accomplishments on your list but it got short shrift in the article. I have always been a goal oriented person and achieving things is when my happiness quotient gets a lift, not buying or owning THINGS. How long do you feel better about the world after having accomplished an important goal versus having bought a new car?
Nice post Sam,
Money is so easy to focus on because of the quantifiable numbers but its only a little piece of a complicated happiness pie.
I do think happiness is somewhat baked into the FIRE movement though since some of it is about not focusing on external happiness motivators like fancy cars, and instead generating time to chase whatever does make you happy, like family time.
So maybe FIRE gets to be 50% not 40%. Still a long way to go to 100% though.
Raised by older parents who lived through the first depression, I was programmed with the mind set that money is the primary protection towards ones well-being and all that “that” implies.
I hate to admit it but my needle towards money being the primary happiness lever was at minimum 80% or more. Fortunately as humans we grow in wisdom on all levels and what I discovered at the age of 50 when I reached my financial independence was that in order for me to have a successful retirement; I had to take into account the holistic well-being of my family members not just their financial needs. This was especially true of my wife.
I also knew enough to work this process through as a case study and in order to have a successful completion, I had to figure out ways to test this reality. In my case it took another four years to work this project to fruition. It required me to work with my kids to assure each made it through their undergraduate studies and at least have a life goal. It also required me to work with each one of my family members individually to make sure they were capable of using their abilities to adapt, interpret, and learn how to take care of their own well-being.
Once I witnessed firsthand that they were well on their way i.e. graduated and employed, I knew it was time for Dad to be retired and I pulled the trigger at age 54. I can honestly say that had I not taken this path, I would still have been at a 80/20. Today my wife and I are are well positioned at a 60/40 allocation towards happiness.
This is a great article with great charts. I notice one of your charts on happiness is furnished by Charles Schwabb so I suspect it has some bias toward things money buys.
I have worked with clients with their money for over 20 years and I would modify those for an individual to use by personal preference so they can customize the usefulness, since people are so different! For example, a nature person who is happily single , and an introvert, may not family family at all. Independence could be achieved for not that much money if you are extremely frugal, smart, and disciplined…. so the amount of money needed has huge variations in definition.
Your blog is a great help for people to critically think about all these things. As a financial advisor, my most important training was in my philosophy courses in school, which is where I learned to know myself and be happy (Stoicism in particular).
Thanks. Bloomberg chart was a poll conducted nun Charles schwab with folks telling them what made them happy.
He is happiest be he king or peasant who finds peace at home!
I don’t think there is anything wrong with a personal finance blog spending the bulk of its posts talking about finance related matters. But I can see that haven’t been at it for a decade, it might be refreshing, exciting and a bit challenging to expand into other aspects of life.
Money plays a large part in my happiness. But it’s an interesting question to see how much. I would say personal health and health of close family and friends are by far the #1 part of being happy. Personal growth might be second, professional growth might be third. After that, money is probably next.
Boredom makes me unhappy. I like to feel that I’m constantly progressing physically, professionally, and artistically. For whatever reason, this year seems to be a trifecta of new experiences. I was asked to serve a two year role in a professional organization as a district representative which has allowed me to meet some really amazing peers which is exciting since I’ve gotten to learn about the innovative ways they work. I’ve worked in the same industry and for the same employer since graduating college 17 years ago so my exposure to other professionals outside my industry has been limited. A month ago, I was really bummed that my high intensity interval trainer for the past three years was retiring. As fate would have it, his retirement coincided with the expiration of a some pole dancing fitness classes I had purchased from Groupon back in January. This turned out to be the perfect activity to replace the high intensity classes. I never realized how much strength, flexibility, and grace was involved in working the pole. Anyone that can make it look effortless is a true athlete and artist in my opinion. The girls in the class are so diverse (none are strippers by the way) and interesting that it’s been fun making new friends. I’ve had a side hustle doing wedding flowers for a few years now but the all nighters I’ve pulled getting the flowers ready aren’t as fun as they used to be. Since I still love putting arrangements together, I’m learning how to set up a successful youtube channel to show others how to make flower arrangements. From a financial perspective, none of these activities are making me money but I sure am happy to have discretionary money to pay for fun classes and supplies for my YouTube channel. Just yesterday, after the pole fitness class, the girls decided to grab dinner together but one of the girls said “I can’t go to dinner tonight. I don’t have spending money right now since I want to pay for pole class and my dog needs a $400 operation next month.” I agree that money, up to a certain amount, does buy happiness.
Excellent, excellent post.
I was just talking to one of my coworkers about this. To my surprise, I reflected to when I made 1/3rd of what I do now, and how happy I was back then.
Then again, it could be because I was younger back then too :)
Kevin, I can totally relate as I had a similar conversation with a friend of mine recently. My first job out of college 40 years ago and I was making 18K/yr and having the time of my life. Single, summers at the lake, playing league softball, golfing with my buddies, dating, etc. I’d say that the first decade out of school was probably the peak of my happiness but not my joy.
Joy came from fulfillment which came as I began to develop a thriving career, worked on a successful marriage, raised a daughter to college age, achieving financial independence and beginning to embark on retirement. These may not rank as high on the fun meter but they certainly ring the bell on the fulfillment meter.
Money is not everything but i would like to have enough for myself and some extra to help the less fortunate because that’s where my happiness lies. (seeing that i can make a difference in someone else’s life)
I love that you’re writing about this, Sam! We had a debate a few months back about whether or not america is the best country in the world. This is the lens that I look at when I evaluate a country. Based on this, if we wanted to live in the happiest country in the world, we’d have to move to Finland or Iceland. Ironically, the reason I left Canada (reported as being happier than the US) is because of the cold!! This is one metric that I didn’t see on that list. My happiness is directly impacted by weather. When I’m warm, I feel comfortable. When it’s sunny, I feel happy. When it’s gloomy out – I feel that way too.
Either I’m alone in my deep connection to weather, or the folks that create these studies aren’t looking at it!
Caren, we moved 15 years ago from Wisconsin to Arizona for many of the same reasons you mentioned so I know exactly where you are coming from. I have been a lot happier in these surroundings and we also have quite the influx from Canada moving in ;)
A better question might be how much of a role does money play in your overall unhappiness? While I feel that I have enough money rationally emotionally I am always concerned. This may be a consequence of having grown up in poverty; but there is no doubt that no matter how far away the wolf is it is still there somewhere.
I almost feel as if the post is about the pursuit of happiness more than happiness itself. I guess the most we can hope for is contentment with occasional joy. Still, a great post, we should all assess and pursue that which we love, but outside of family finding that thing is much harder- I suppose some of us will always be like Don Quixote, Tilting at windmills in pursuit of an ideal and that probably never existed anyway.
I’d love to hear your thoughts on how much money plays a role in your overall happiness.
I tagged it at 30%. I know what it’s like to grow up with a little money and I know now what it’s like to have relatively a ton of money. Still, 30% tops for me.
What are some other important things that make you incredibly happy?
Control over my time which is often used to sit outside, go for walks with my wife, or day trips to go for a hike. My job at a non-profit is so rewarding as well. This is in line with your comments on social workers, firefighters, etc.
What are some things you notice happy people do that unhappy people don’t do?
Being grateful for what you have. Inversely, recognizing how much worse something could be. For example, I have MS. But it could be a lot worse. And even if it was worse, I would hope I could still be grateful for what I have.
Sam, great article but stop blaming Coke and Pepsi for the obesity in this country. As kids we drank all of that but never sat in front of a computer (didn’t have them) all day and we were all lean. People sit in front of a monitor all day then go home after sitting in traffic for an hour and look at their phone or computer. You could outlaw sugary drinks and it wouldn’t move the obesity meter at all.
Actually untrue- Preschool programs replaced whole milk and juice with low-fat and water and obesity dropped. IT IS ALWAYS EASIER TO CONSUME CALORIES THAN BURN THEM.
Blaming computers I’m seems to be the easy out when many kids used to watch TV and read a lot more – both highly sedentary activities.
Sorry, wrong, kids have shorter recesses (at least in CA) then 30 years ago. Also, kids do not have to take PE. blaming it on a soft drink is the easy way out.
So is not blaming it on soft drinks – it is highly apparent that while we are somewhat more sedentary, we eat many more calories, than previous generations. Soda, devoid of any other nutritional value is a leading culprit.
Laws of thermodynamics can be ignored but they still exist; sugary drinks supply 150- 200 calories. Two- three/ day in a child’s body is 9000 extra calories/ month. That’s a weeks worth of extra calories- take a whole lot more than 30 minutes recess to burn that off.
And as this is a post on happiness, obesity does not make children or adults any happier.
I do not understand why parental and personal responsibility are ignored in the obesity epidemic. We got at best one coke a week growing up. And we better ask for a snack and few to choose from. But then again we didn’t care because we couldn’t wait to go outside and play. Learning to control oneself by example is always better than controlling others or a product.
Great post. Money isn’t the only currency in life.
Thank you for taking the time to write such a well thought out post. I am glad you are planning to focus more on the other aspects of life. Money, in my opinion does a few things to promote happiness. First, it buys you food and shelter. Next it buys you healthcare. After that, the next big benefit is buying you freedom to do whatever you want in life. After that, it no longer has any further utility, only the power detract from your happiness if you allow it. I like to define wealth as three subsets, money, happiness, and health. Perhaps you have already written about it, but it would great to see you concentrate on health as well. Health also ties into happiness as going for a long walk with a friend or loved one will do wonders to efficiently promote both. Cheers
Thanks Sam for all of your regular posts and reminders on how to live your best life. Please count me in your list of huge fans who has gained a ton of practical and intellectual skills based on the guidance from the Financial Samurai.
As always, so well written and researched. I found the anti-depression medication statistics eye opening.
I wonder what the first graph means in the lavender color labeled “dystopia”. Do the respondents think they live in a dystopia and the researchers said that is good?!?! Any idea where the image came from so I can further review it?
People always ask me “will student loans/debt ruin your life?” My answer is no. The discipline you’ll learn and sense of accomplishment you’ll feel after paying off debt will make you very happy and translate into other areas of life. You’ll start asking yourself what else you can do.
I maintain that struggle with purpose is the main source of happiness.
On another subject, I was an intern and later full time employee at a hospital that treated some of the survivors from the Pentagon on 9/11. I too felt anything I did after college was meaningless.
Then I watched men my age go to war and I felt even more worthless.
This lasted into my 30s and finally lifted somewhat.
I think we underestimate how that even impacted us.
Financial independence and security definitely has an impact on happiness imo as long as it isn’t taken for granted. I think little to no stress also has a big impact on overall happiness. Stress is like a poison that creates chaos and spreads out in every direction. Having outlets outside of work and hobbies also help increase happiness. Even if you love your work, it helps to do something else fun during the week to mix things up.
Very thorough post Sam! Thanks for sharing so many tips, stories, and charts.
> Because I met my wife so early, I’ve always had this minimum elevated level of contentment
Sam should write a romance novel ;-)
Sam, I am a very Happy Camper! My son and daughter in law just broke the news to us that we were going to be Grandpa and Grandma by Christmas time. Certainly, brought tears to my eyes.
Wonderful! Congrats!
I firmly believe that money does not guarantee happiness but lack of money guarantees unhappiness. In other words it is asymmetrical. You need a certain amount of money just for the necessities in life (shelter, clothing, food, safety). You cannot be happy if you are living on the street in rags, filthy, starving, etc. Beyond that, each incremental dollar buys less happiness. Look at Maslov’s Hierarchy of Needs. The lower order needs can largely be obtained with money. As you move up the pyramid, the higher order needs have less to do with money and more to do with non-monetary and inward facing needs.
Agreed.
“People say money doesn’t buy happiness because it’s true. After you make enough to comfortably survive, whether it’s $75,000 in Kansas City or $250,000 in San Francisco, having more money seldom significantly moves the happiness needle.”
I think if you had money and a certain lifestyle that you enjoyed, and then lost it all, you’d probably have a different perspective on how important money is to achieving happiness. My guess is if you took this survey before and after, your perception of happiness tied to money after losing everything would probably rise dramatically.
Sure. What percentage did you choose if you don’t agree with my 40% figure?
I did lose a ton during the financial crisis. Don’t want to go back to those times again.
I think both money and health are requirements for baseline happiness. I can work on the other stuff but if I don’t have enough of the first two, it’s hard to focus on the rest.
Thank you Sam for providing candid personal info to accompany your post. I am in my late 20s and still looking for what I really wanna do with my life in terms of career wise and it’s refreshing to see that you also had to continually re-evaluate your choices and decisions throughout your life. I think one thing I really respect and enjoy about this blog is your consistency in your beliefs, staying stealthy is what I find to be the #1 key in being truly happy. I have my own blog as well and I have to watch out what I say, even though I have done my due diligence of not leaking any personal info but I’m sure employers and recruiters alike can dig it up haha but just like you, the blog is the perfect medium to convey my thoughts out loud and I will continue it by staying motivated from you and the rest of the awesome FIRE community!
I think money counts for 60%, at least. Having more money above a certain point doesn’t add to happiness much, but not having enough can make you really miserable.
This year has been really tough for me. My mom is dealing with a health issue, our condo isn’t selling, and income is down. I’m less happy than last year, but still pretty good overall. I’d say a 7. Once a condo is sold, it should be much better. It’s hard to quantify happiness because it is so subjective.
That’s a lot! And I disagree. Do you think if you had like a million more dollars you wouldn’t care whether your condo sells or not? Maybe you’d just keep it, or keep it empty as an extra unit or something?
I don’t know, there’s financial thresholds for everything. Fully agree with the main thrust of the post but it’s a matter of perspective.
I have been working 2 or even 3 jobs over the course of this year so far, even peaking in the top 1% for a month for California household incomes according to various sources I can find online, but I am also heavier than I have ever been in my life, got seriously run down, and am just now pulling out of the funk I was in even with the prospect of going down to 1 gig and losing 160k of income as a result.
But I realized I just don’t care, I make more than enough money for myself even with the higher expense tab I had going up to SF every other week money was still being saved at a solid rate, and everything above that is just a financial bonanza / windfall. But it’s a sacrifice and is it worth it? Individual question but not in a relationship currently and if I can squirrel enough nuts away I can go do something I find more meaningful with my life… more money above some line in the short term I would suggest can be a straight negative, but does that outweigh the long term benefit if you aren’t spending it?
Harder and more interesting question for me anyway.
Money is not worth sacrificing your health. Your situation seems like it is agreeing with me that money is not the major driving factor to happiness.
See: https://www.financialsamurai.com/the-health-benefits-of-early-retirement-are-priceless/
Sam, my takeaway from this (excellent) post is that you must be quite easy to talk to. ‘Biff’ really opened up and was vulnerable and humble, in his time with you after the game. That must have been a great evening for you both, winning the game, some friendly socializing with teammates, and a great one-on-one convo. Thanks for sharing it, as well as the thoughts on happiness.
When you win a nail-biter and have all you can drink pitchers b/c its on the company corporate card, the words start flowing! I spend about 70% of my time listening in general. It’s fun to hear stories. Boring to hear myself speak cause I already know my story.
Diet pepsi ! All the fun without the sugar
In the past few years, I think I’ve become a bit obsessed with personal finance and savings. I think what I really crave is enough money to achieve independence while achieving my minimally acceptable standard of living. I’ve never been “good” at nor do I enjoy corporate life, but seem to lack the creativity to start my own independent business. So here I sit, plodding away, saving money and reading blogs like yours.
I guess I’m also realizing that most folks who read FS are trying to optimize that 40% I believe in, and they may go elsewhere to understand and optimize the remaining 60%. Makes sense given the DNA of this site.
I just want to expand a little more as life is way more than just money.
I’ve found that happy people don’t ask a lot of questions to others about their lifestyles, decisions, etc. They are a bit more carefree and concerned about how to optimize their own lives and continue to be happy.
There is a lot of unhappiness because the world has gotten smaller and there’s just too much comparison. People who say and do bad things on social media are idiots. But they are also people who have some problems with their lives that needs sorting out.
That kid who said racist things in a private Google chat dock and got his Harvard admissions revoked comes to mind. But there are so many other people who have screwed themselves while still needing a job and income to survive.
It’s always good to forgive and move on. But these idiots need to first apologize before they can move on.
True. Social media risk:reward is not very good, especially if you need a job to survive. Social media is mostly for getting some attention and feeding the ego IMO. We all need some ego massaging… but it’s worth minimizing time on the platforms.
Spending most of your time trying to make online friends instead of real life friends is suboptimal.
Sam, I’ve closely followed and commented on many of your posts over the last two years. For me, I think this is one of the better ones because I related to so many things you said.
“When there was BS happening at work, I spoke up often to my own detriment. I didn’t appreciate nepotism and often challenged senior employees whom I did not respect. This was not a good career strategy. When the big bosses in my corner were eventually pushed out, I was left with fewer backers.”
It is as if you wrote this specifically about me. This was my MO throughout my 36-year corporate life. People would always come up and thank me for speaking out in meetings on their behalf. It was just a shame that they benefitted from my comments solely because they didn’t have the courage to take on any of the dirty work while I took the hit to my corporate credibility as someone who rightly made executives uncomfortable instead of towing the company line. In the end, my career basically ended as part of a restructure. They could never push me out because of performance but they could move me out at 57 as part of a reduction in force.
Fortunately, my wife and I planned well and became FI many years ago so I’ve had the luxury to help start a business with some former peers and work on this for the last 4 years. I’m now about to retire for the second time while my wife wishes to continue on for a few more years. This has given me a lot of time to reflect and ponder the future.
One comment I would have about the FIRE community at large is that I believe they have done a disservice to focus so much on “RE” instead of “FI.” I think the mantra of “retire early” has been overblown. To me, success is achieving FI in order to do what you think is best for you, your family and for others. The end game is not necessarily always “RE.”
I think we need a new movement called “FISO” with the “SO” meaning serving others. Achieve independence by focusing on “Success” in the first half of your life and then focus on “Significance” in the second half of your life. There is a great book called “Halftime” by Bob Buford that discusses this in depth.
Thanks again for this post. It really hit home with me.
At least you were able to make a 36 year career! That’s great and I would say RARE nowadays. Hopefully you got a nice pension or a severance.
26 of the 36 years were with two companies of which both my wife and I worked. Fortunately, we have pensions from both companies and we both negotiated severance packages through each of our respective layoffs.
I would call our severance “fair” but not extraordinary.
I’ve met many Biff Tanners of the world. Guys who thought they were hot stuff in high school but never moved on as an adult. Most end up losers. And because they end up losers as adults, they are one of the main types of people who hate on other people.
Think the dorks in high school who end up being cops and brutalizing the victims they are meant to protect.
I’m glad your Biff turned his life around!
So many Biff Tanners! It’s pretty amazing how folks get stuck in high school glory days like Al Bundy from Married With Children. I am glad my Biff turned it around, b/c being in his position sounded extremely terrible.
Confidence and happiness go way up when you are looking and feeling good. It’s just natural. I know of several Biffs online who are part of the Internet Retirement Police and its pretty sad. Not sure what the female version of Biff is. Gotta come up with a name if you think of one.
We just returned from a trip to Greece. After talking to so many people there, they are working harder for less money and not very happy about it. Although Greeks LOVE their families and value them more than money- they spend a lot of time together! We felt bad for the young people there- they complained they are working 15 hours per day for little money….probably to pay for the sins of the elderly and the government there. Very sad. But they eat really healthy which makes us want to change our lifestyles here in the US. Socialism doesn’t work does it.
Hi Sam,
In regards to standing up for yourself, depending on the situation, it’s hard to do just that. Especially with our Asian culture, we are to respect everyone especially the elderly and not talk back. What if it’s family relatives (could be in-laws or own relatives) that don’t respect you or treat you like you are a nobody or gives you a hard time?
Even if you are successful, you are still being treated as a nobody and still being criticized of not being good enough. What’s worse, being compared to someone else who is pretty much the same or worse than me! In other words, how is it fair when someone tells me be like this person when this person is worse than I am or have the same things that I have? At what point do you say, “No, I’m very capable and stop with your immature ways”? Till this day I am too scared to speak up and defend for myself. I’m afraid that I will be considered as disrespectful and not a good person.
I am a grown woman and still feel helpless when trying to stand up for myself in front of Asian relatives and in-laws.
Has anyone felt this way before?
I’m Asian, from the Indian subcontinent, it’s very hard for Asian women to stand up for themselves. I’ve been demonized by my community and in/laws, but I decided to pay that price, so I could live without their toxic behaviors. My kids are grown and I find that helping others, whether it’s a shelter, soup kitchen, community garden, gives me the happiness I’ve lacked from my “Asian” family.
Hi Seema,
Thank you for sharing! And thank you for sticking up for yourself and helping others! Good to hear that you are helping out your community. It’s so hard to be recognized sometimes even when/if you speak up, it doesn’t get noticed :/
I would ignore them and stop associating with them. Or, I would speak to them directly and say how they are making you feel. Then asking them WHY they want to make you feel this way. These direct questions cannot be ignored, and you will slowly peel back an onion to find out the reasons why.
My close relatives do this to me as well. After I achieve a milestone on my site, one close relative will ask, “but what about XYZ bigger site?” It’s never good enough for him, and I’ve heard him always try and compare me to someone richer, better, etc my entire life.
It used to get me down, but now I just roll with it. I understand his background of setbacks, and it’s his way of keeping me down so I can feel what he felt. But I am a SUPER OPTIMISTIC. When I sprain my ankle, I give thanks I didn’t break my ankle. When I lost my money in the recession, I get motivated to do something new like start Financial Samurai, whoo hoo!
Do not feel helpless. Stand your ground. Be proud of your accomplishments. What is the worst that can happen if you stand proud and speak up for yourself? Respect.
First, I’m an Asian guy.
Even before I achieved FI, I recognized that some peoples opinions didn’t matter to me. I’m not going to waste my time proving my point or trying to change their opinion. Now that I’m older, I just don’t care what they say or think.
Please follow Sam’s advice “just roll with it” and don’t let it bother you. Because in the end – you shouldn’t let their insecurities become yours.
Excellent post and topic Sam.
Money is definitely not the source of happiness. It is a tool and just like any other tool needs to be properly used to be effective at doing the desired job.
Relationships and experiences are what you are going to take with you and remember on your death bed. Not your back account highs.
Getty was the richest man in the world at one point but he was an absolute miser and looked like he was trapped by his riches. Not a life I would want.
xrayvsn, always enjoy your comments and this one reminded me of a quote…
“Money isn’t everything. But it helps you stay in touch with your children.” – J. Paul Getty
Never heard of that one. Good one! The Gettys are here in SF. I see a couple of the heirs about once a quarter as well during Sunday brunch. Kinda intimidating folks!