How often do you hear that cliché statement, “Money doesn’t buy happiness”?  Well I think it does, and I have a theory on it!

Money Does Buy Happiness Theory

It is only a theory because I can’t prove it, although I am sure someone much smarter than I can prove it.  I was having a glass of whiskey in a co-worker/buddy’s office after we both had particularly rough days when a 3rd co-worker came to join us.

This particular co-worker, is a very nice woman but clueless to an annoying fault. I can’t guess how old she is (has to be mid to upper 30s) but still lives at home with mommy and daddy in a ridiculous house, and goes with them to “The Club” for dinner every weekend.  I once argued with her that her car was amazing (she was driving in an X5 BMW), and it was only after I proved to her that the MSRP on her car was more than 60% of her fellow American’s yearly income that she finally got where I was coming from.  Ms. Co-Worker does health insurance and not really financial planning.

Maybe it is because I work in a financial planning office with a lot of high net worth clients  but the conversation quickly turned to money, and I don’t know where it came from but Ms. Co-worker stated matter-a-fact that “Money Doesn’t buy Happiness.” I don’t know where it came from, but without thinking I shot back, “It is because you never had to worry about it.”

As we discussed the topic and drank more whiskey I came up with a theory on the dry erase board in my buddy’s office.   I can’t possibly be the first one to think of this theory, but I didn’t really research it before writing this post (maybe one of my smart readers can point me to further reading on the topic).  I should mention when describing theories or estate planning ideas, I like to draw pictures and flow chartsThe Wife hates it.

Does Money Buy Happiness

Money Brings Happiness in Diminishing Returns

If you hand someone $50,000 who has nothing – you tell me that money didn’t just bring them happiness!   That being said go hand Bill Gates $1,000,000 I don’t think it would change his life much.

Why Do I Believe that Money Buys Happiness?

Girl with Red Balloon replied to my Question “Does Money Buy Happiness” and I found her reply really interesting:

twitter with Girl with Red Ballon

My immediate reaction, was doesn’t she mean Yes then – Money can buy those experiences and things that make us happy.  Unless she meant the more abstract as to whether the paper itself brings joy, in which case I can’t say that I agree with her either, knowing that I have that paper to buy stuff/experiences/food does bring me happiness.  (Side Note: She is really active on Twitter you should check her out).

I think it has to do with the fact that money is the only tool for financial freedom in our modern world.  I can’t hunt, don’t like to fish, I am fond of my home, would like to pay my hosting bill so you can read me getting bashed when I talk about teachers.  I need cash to survive, and yes, without it I’d be pretty sad.

If you were wondering how the conversation ended with Ms. Co-Worker, she dismissed my awesome drawing and continued the conversation about how she didn’t care about money with the sentence, “When I was in the Hamptons last weekend…” It was at that point I put my glass down and said I was out!

Thoughts? Does Money Buy Happiness?