I’m unabashedly pro-wealth. I think the recognition of personal freedoms that allow capitalist systems to function has done more to benefit mankind than any other development since humans discovered how to wield fire. That said, I’ve thought and written much about money and happiness lately, and much of what I’ve been reading and thinking about indicates that money, at the personal level, can cause quite a bit of unhappiness. This, and the other posts before it, are not meant to dissuade anyone from creating, or even desiring, money. They are just things to be aware of as you do.
Luxury Begets Self-Interest
Interesting research out of the Harvard and London Business Schools:
mere exposure to luxury goods increases individuals’ propensity to prioritize self-interests over others’ interests, influencing the decisions they make. [In one experiment] participants primed with luxury goods were more likely than those primed with non-luxury goods to endorse business decisions that benefit themselves but could potentially harm others.
A bit scary. As we become more successful, we get more decision making power, and most of us tend to surround ourselves with more luxurious stuff. Whether it’s a nicer office chair, or nicer clothes, or a nicer car, or a nicer house, these are ways most successful people spend some of their hard-earned money. But, those luxury items, the things we get because we worked hard and presumably helped other people, can make us behave badly toward other people. Weird, but definitely something to keep in mind. Makes super luxurious corporate offices seem like an even worse idea. Perhaps a spartan “decision making center” could help. Q & A with one of the researchers here.
Wealth Prevents Us From Enjoying The Roses
There seems to be quite a bit of evidence that wealth prevents us from enjoying the little things. This makes a bit of sense, intuitively. If you’re used to flying in a private jet, flying coach is going to be that much more miserable. But, studies also suggest that if you’re used to luxuries like flying in private jet, you start failing to appreciate all sorts of smaller things, like sunsets or roses.
So, are we doomed to be constantly underwhelmed once we get rich? Maybe it depends what you spend your money on?
Buying Experiences, Not Possessions, Leads to Greater Happiness
A new study shows that satisfying higher-order needs leads to greater happiness. Spending money on dinner at a nice restaurant or theater tickets satisfies our need for social connectedness and vitality, whereas spending money on clothes or housing satisfies our need for protection and shelter.
Experiences also led to longer-term satisfaction. “Purchased experiences provide memory capital”, Howell [the author of the study] said. “We don’t tend to get bored of happy memories like we do of a material object.” This was shown to be true regardless of the cost of the experiences or the income of the participant.
Very interesting, and makes complete sense. We are social animals. We are creatures of memory. Even when it comes to possessions, I’m more attached to things I’ve had, or the memories of those things, than I am to things I still currently own.
Speaking of being social, money also plays an important role in relationships:
Insecurity in Relationships Bind People to Possessions
Humans are social creatures with vulnerabilities. Close relationships affords protections. For examples, infants wouldn’t survive without other people. But material possessions also afford protection and security. Humans need food, clothing and shelter to survive. So, it takes a mix of things to make you feel secure. But, if you heighten one source of security, people feel less concerned about the others.
We conducted two studies, and the basic finding in both is that if you make people feel interpersonally secure, they’ll place a lower monetary value on possessions.
So, when people don’t feel loved and accepted by others, the importance they place on material items rises. Be wary if your significant other cherishes that pair of shoes just a little too much.
Finally, some good news. I think.
Money Isn’t The Root of Most Divorces
Jan Anderson, associate professor at CSU Sacramento, says that “As a predictor of divorce, money problems are … so minor. If we look at all the causes of divorce, financial problems can only account for 5% of the effect.” In fact, recent studies of the causes of divorce have rarely ranked money problems higher than fourth or fifth, with other causes — incompatibility, lack of emotional support, abuse and sexual problems — typically ranking higher.
Anderson hypothesizes that it may simply be easier to blame money, rather than take a hard look at your own flaws, that accounts for money ranking even as high as it does. At least one therapist agrees: “It’s always what the money represents: dependency, control, freedom, security, pleasure, self-worth”.
Conclusion
So, getting rich doesn’t mean you have to be unhappy and get divorced. But if you don’t keep these things in mind, money could very well lead to unhappiness, and it might make a great scapegoat for why you got divorced.