Money primarily serves to eliminate stress and barriers to happiness rather than being a direct source of joy.
Achieving financial goals can lead to existential crises for entrepreneurs, as hope and ambition may not translate into lasting fulfillment.
Deep dives
Understanding Wealth with Kubera
A comprehensive wealth management platform provides a real-time perspective on assets across various classes such as bank accounts, stocks, real estate, and personal collectibles. It emphasizes the importance of not only tracking current wealth but also modeling future financial scenarios to prepare for potential market shifts or investments. By utilizing such tools, individuals can gain clarity on their wealth trajectory, which aids in financial planning and decision-making. This proactive approach to wealth management helps in understanding one's financial position and making informed decisions about future investments.
Reevaluating the Happiness Threshold
The concept of a 'happiness threshold' in relation to wealth suggests that there is a specific amount of money needed to achieve happiness, but this premise is now challenged. While earlier studies indicated that happiness plateaus after reaching a salary of around $75,000 to $110,000, recent insights argue that happiness does not solely come from money but is affected by personal circumstances and mental health. The conversation has shifted from simply identifying a monetary number toward understanding that money serves a more complex role in our lives. It can eliminate barriers to happiness rather than directly increase joy, which reshapes how we perceive financial success.
The Subtractive Nature of Money
Money is viewed as a subtractive tool that can alleviate stress and remove obstacles to happiness rather than a source that directly adds joy. While it can provide temporary pleasures or experiences, these do not contribute to lasting contentment or fulfillment. The podcast discusses how meaningful connections, purpose-driven activities, and emotional well-being are inherently non-monetary, highlighting that money cannot create emotional depth or relational ties. This perspective suggests a fundamental shift in how individuals approach wealth, focusing more on its capacity to remove problems rather than as a means to add happiness.
Hope and Wealth: The Psychological Trade-off
Once financial goals are met, individuals often face an existential crisis as they transition from a mindset of hope and ambition to one of reality. The idea of hope fuels many entrepreneurs, leading them to pursue wealth, but reaching that wealth can lead to a sense of loss when the anticipated emotional fulfillment does not materialize. This phenomenon can contribute to a decrease in life satisfaction among those who were previously driven by the promise of financial success. Reflecting on personal motivations and redefining success beyond monetary figures allows individuals to regain a sense of purpose and happiness beyond the pursuit of wealth.
There is no amount of money that will make you happy. There is also no amount that will stop making you more happy.
Both of those things are true.
Our producer is not rich. But she has talked to 100+ people who are, and she (I) has learned a lot about your kind (is that wrong to say?).
In the Moneywise pilot, we asked the question “at what point will more money stop making you happy”. Turns out, that was a pretty stupid question. So in this episode, we’re fixing that.
This is an episode of Moneywise unlike any other. This is a solo essay-style inside-outsider's take on wealth and happiness, based on the past year of peaking behind the curtain at what truly makes millionaires lives better… and worse. Backed up by quotes from our guests and of course, real studies.
Here’s what we talk about:
Money doesn’t make you happy. It can only remove stress.
The “happiness number” is a myth but knowing your “freedom number” changes everything.
Most people don’t want money, they want the freedom they think money will give them.
Hitting your financial goal won’t feel like you imagined.
Founders often feel lost post-exit because they unknowingly traded hope for cash.
Wealth adds new stress.
Money can’t buy you meaningful experiences, and you need to stop thinking it can.
If you expect money to do the emotional heavy lifting in your life, you will never be satisfied.
Money is the key, not the door. It unlocks your potential but it won’t add anything more to your life.
Chapters: (00:00) Introduction and Confession (00:35) Reflecting on 50 Episodes (02:24) Revisiting the Happiness Threshold (03:09) Money as a Subtractive Tool (03:48) The Freedom Number vs. Happiness (05:07) Studies and Research on Wealth and Happiness (14:39) The Hedonic Treadmill and Wealth's Paradox (17:45) Hope and the Entrepreneur's Journey (25:26) Concluding Thoughts and Freedom Numbers
This podcast is a ridiculous concept: high-net-worth people reveal their personal finances.
Inspired by real conversations happening in the Hampton community.
You Host - Jackie Lamport
Not really the host, but the producer.
Wrote this sentence.
Older than I appear, I promise.
References:
Kahneman, D., & Deaton, A. (2010). "High income improves evaluation of life but not emotional well-being." Proceedings of the National Academy of Sciences, 107(38), 16489-16493. DOI: 10.1073/pnas.1011492107
Jebb, A. T., Tay, L., Diener, E., & Oishi, S. (2018). "Happiness, income satiation and turning points around the world." Nature Human Behaviour, 2, 33-38. DOI: 10.1038/s41562-017-0277-0
Killingsworth, M. A. (2021). "Experienced well-being rises with income, even above $75,000 per year." Proceedings of the National Academy of Sciences, 118(4). DOI: 10.1073/pnas.2016976118 Link, B. G., Phelan, J., Bresnahan, M., Stueve, A., & Moore, R. E. (1995). American Journal of Orthopsychiatry, 65(3), 347-354. DOI: 10.1037/h0079653
Donnelly, G. E., Zheng, T., Haisley, E., & Norton, M. I. (2018). "The Amount and Source of Millionaires’ Wealth (Moderately) Predicts Their Happiness." Personality and Social Psychology Bulletin, 44(5), 684-699. DOI: 10.1177/0146167217746340
Luthar, S. S., & Becker, B. E. (2002). "Privileged but Pressured? A Study of Affluent Youth." Child Development, 73(5), 1593-1610. DOI: 10.1111/1467-8624.00492.
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