13 Jun How money CAN make you happy – Michael Yardney
I remember growing up and hearing my parents talk about things like “Well, it’s not all about money,” and how filthy money is and “Money can’t make you happy,” and all that kind of stuff. Rubbish. We will tell you about the five ways money can make you happy.
Kevin: I remember growing up and hearing my parents talk about things like “Well, it’s not all about money,” and how filthy money is and “Money can’t make you happy,” and all that kind of stuff. I guess that’s all about conditioning, and it’s something that we’ve talked about in this show quite a few times, and that is the conditioning from your parents structuring you later in life.
“Five Ways That Money Can Make You Happy” is an article that’s been written by Michael Yardney, who joins me as a guest.
Good day, Michael. How are you?
Michael: Hello, Kevin. And you’re right; we were all told those funny things about money when we were young that makes us have mixed messages about money. I think we all recognize that you need much more than just money to make you truly wealthy. You need health, you need friends, you need spirituality, you need to be able to give back to the community, but a study has recently shown that, in fact, money can make you happier.
And Kevin, if it doesn’t, then you’re probably not spending it right.
Kevin: That’s the point, isn’t it? It’s not so much having the money; it’s actually how you use the money that’s going to make you happy. Is that fair?
Michael: Yes, it is, Kevin. That’s right.
Kevin: Let’s have a look at the five ways that money can make you happy, Michael.
Michael: This study found that the key to making you happy when you spend money is to understand the importance of spending it on things that make you happy as opposed to on things that don’t. Can we go through a couple of those things, please?
Kevin: Yes, please do.
Michael: The first one was buy more small things. Human psychology means that we tend to adapt so well to the stuff we buy that even making a big material purchase doesn’t always have long-lasting effects, but it also means the difference between buying something really big or making a small one interestingly is minimal and you can get lots of multiple pleasures for the cost of one big one.
I found that quite interesting, Kevin. It means you don’t need lots of money to buy one big thing when you can afford smaller things to make you happier and enjoy the journey along the way.
Kevin: Interesting, Michael. In a recent podcast, you and I talked about some of the lessons we can learn from Donald Trump, and I do recall a lot of that was all about how he uses money. He also looks at things like experience, and that was, I think, lesson number two about money making you happy. Is that right?
Michael: You’re right, Kevin. Research has found that people reported greater happiness when reflecting on an experience rather than buying something physical or material. The reason is that we tend to adapt to physical, material things quickly, so buying a shiny new toy will bring you some happiness in the moment, but after a day or two, sometimes it becomes an everyday item that we use.
In contrast, an experience takes you out of the everyday, and if you do it right, it actually can leave a lasting impression, something that makes you feel good for a long time. Imagine that trip that you did to Auckland skiing or something like that. That leaves a lasting impression, Kevin.
Kevin: Actually, you’d find it very hard to ski in Auckland, I think.
Michael: I realized that as I said it. It’s Queenstown everyone goes to skiing in New Zealand. You’re right.
Kevin: Sorry to correct you on that one. I couldn’t let that one go by, I’m afraid.
Michael, right at the front, we talked about it’s how you use the money. Is spending it on other people one of the ways to make you happy?
Michael: That’s right. You’re right, Kevin. We’re social beings. We appreciate and enjoy quality relationships and so therefore, spending it on others, on your loved ones, will also make you happy as well as them. That’s a nice way to do it.
Kevin: I know that you love to travel. I love to travel, as well. One of the things that I really enjoy is the planning process. If I’m going to go away on a trip, to know that we’re going to do it in six months’ time, just the excitement of that event coming up is another way that money can make you happy, Michael.
Michael: Exactly right. It’s actually looking forward to and anticipating something in the future. There have been lots of studies talking about delayed gratification, and it’s clear that those people who know how to delay gratification for the future are successful in all elements of their life.
In other words, they don’t spend all their money today; they know how to save and eventually then maybe buy the investment property or in this context that we’re talking about today, maybe they’ve just saved to be able to have that holiday six months down the track.
We think it’s going to make us happy having satisfaction right now, but in actuality that’s not true, Kevin. We tend to be happier when we’re eagerly awaiting something.
Kevin: And the final point, Michael?
Michael: Many people have big dreams – they want to buy a big house or have a big property portfolio – but if you keep wanting those and forget enjoying your day-to-day little successes, wins, the happy times, you’re going to miss out on the big picture. So, treat it one day at a time.
To be really wealthy, you have to feel grateful for what you have today. If you’re happy and grateful for the things around you – we’re living in the best country in the world at the best time in history to do that, and we have somebody to love and somebody who loves us – then you are a very wealthy person already, Kevin.
Kevin: I guess the bottom line, Michael, is that wealth alone is not going to provide you with a guarantee of a good life; what really matters a lot more than a big income is actually how you spend it, how you use that money.
Michael: Very correct, Kevin. It’s an interesting concept.
Thanks for your time, Michael.
Michael: My pleasure, Kevin.