PF Hour Episode 23: JD rejoins Jim to talk Money and Happiness
JD rejoined the Personal Finance Hour after taking a bow and letting Baker fill in for him last week. The guys spent some time getting reacquainted as JD talked about his walking marathon and Jim shared some of his experiences from the IzeaFest (where he met up with Jeremy from GenXFinance, Cap from StopBuyingCrap, Ben from MoneySmartLife and SVB from The Digerati Life).
Money and Happiness
The topic for this week’s show was Money and Happiness. JD got the idea after he began working on his book. He wanted to conclude the book with a chapter on this very topic, however after talking to his publisher; he was convinced that this chapter should be put up front. Undertaking writing the chapter, he had to do a large amount of research that helped carry the topic throughout the show.
One thing that JD stressed was that there seems to be diminishing returns in relation to wealth and happiness. There is a certain base level at which someone feels happy with money, but after that, it really seems that the money people have doesn’t correlate to the amount of happiness they experience. Jim continued this thought with a smart anecdote saying, “Money is like air. You can have too much air and never be able to use it all. However, if you have too little air, you are in real trouble.”
A lot of people state that a fulfilling job can lead to happiness. However, JD states that doing what you love is not always plausible, even if you put a lot of effort into doing that thing which you enjoy so much. They did discuss that it is possible to do what you love and have it reap rewards long term, but for people that are just starting out in their careers, it is unlikely they will have the opportunity to do what they love when they are staring down at the problems we all face as to how we each pay rent, pay for food, etc.
One thing that seems to stress people, or make them unhappy, is when they compare themselves to others. Jim and JD agree that you should try your hardest to refrain from doing that. Especially if you compare yourself to co-workers, you have to focus on more things than just money. Shift your comparison to other things if you must, but comparing on money is always going to end up poorly.
The media causes us to want for things. The guys further expanded by how our friends make us wish we had things that we don’t have. A lot of people often notice that they spend more money when they are out with people that spend more. It’s not advised to abandon those individuals, but to be consciously aware of your attempts to live their more extravagant lifestyle could alter your behavior a bit and in turn make you happy with what you have.
JD cited that there are a lot of conflicting studies with regards to money and happiness. Some analytical studies say that income has a huge impact on a person’s happiness, while psychological studies say the exact opposite.
Chatters and Callers
Neal from WealthPilgrim first typed in the chat room that you can make any job enjoyable, or you can at least find ways to make it tolerable. This may or may not be the case, but viewing work as work may help you get through rough patches. When Neal called in later, he said that money at a certain point will make you happy. However, he wanted people to think back to when they were young and didn’t need money to enjoy life (college years!). In fact, it could be argued that the need to have more money and the pressure that’s associated with earning more can actually make someone less happy.
The guys agreed with Neal’s point and went on to discuss the Fulfillment Curve from Your Money or Your Life (to read more about the Fulfillment Curve, check out Trent’s Podcast dedicated to the topic).
Another further discussion popped up about maslow’s hierarchy of needs which vaulted the guys into a brief chat about Daniel Gilbert’s Stumbling on Happiness and his theory of miswanting.
Jim further expanded on a topic that we heard about when Greg Karp visited the show; Memories appreciate while “stuff” depreciates. That sentiment has hit Jim so hard that he blogged about it over at Bargaineering.
Baker (Man vs. Debt) called in to close out the show to talk about something that may be counterintuitive to most people. He mentioned something he read on ZenHabits where a lot of people tend to work toward their specific goals and that gives them happiness. However, Baker stated that it is entirely possible to be happy without goals. Without the stress of striving to achieve or the fear of failure, you are able to be happy without constantly measuring yourself up against an idea that you have set yourself towards.
Concluding Thoughts
The guys finished up by discussing Baker’s point about being happy without goals. Jim specifically said that having a goal just isn’t enough in terms of making someone happy, its the process toward that goal which should be the most enjoyable. Personal finance has a lot of “what now?’s” after completing a goal, which could lead to people feeling lost at times. That is why the journey is the most important part of any medium to long term goal.
