More Money = Happiness?
Trading options? Here’s an amazing article from David Brooks
The Sandra Bullock Trade
By DAVID BROOKS
Published: March 29, 2010
Two things happened to Sandra Bullock this month. First, she won an Academy Award for best actress. Then came the news reports claiming that her husband is an adulterous jerk. So the philosophic question of the day is: Would you take that as a deal? Would you exchange a tremendous professional triumph for a severe personal blow?
On the one hand, an Academy Award is nothing to sneeze at. Bullock has earned the admiration of her peers in a way very few experience. She’ll make more money for years to come. She may even live longer. Research by Donald A. Redelmeier and Sheldon M. Singh has found that, on average, Oscar winners live nearly four years longer than nominees that don’t win.
Nonetheless, if you had to take more than three seconds to think about this question, you are absolutely crazy. Marital happiness is far more important than anything else in determining personal well-being. If you have a successful marriage, it doesn’t matter how many professional setbacks you endure, you will be reasonably happy. If you have an unsuccessful marriage, it doesn’t matter how many career triumphs you record, you will remain significantly unfulfilled.
This isn’t just sermonizing. This is the age of research, so there’s data to back this up. Over the past few decades, teams of researchers have been studying happiness. Their work, which seemed flimsy at first, has developed an impressive rigor, and one of the key findings is that, just as the old sages predicted, worldly success has shallow roots while interpersonal bonds permeate through and through.
For example, the relationship between happiness and income is complicated, and after a point, tenuous. It is true that poor nations become happier as they become middle-class nations. But once the basic necessities have been achieved, future income is lightly connected to well-being.
Growing countries are slightly less happy than countries with slower growth rates, according to Carol Graham of the Brookings Institution and Eduardo Lora. The United States is much richer than it was 50 years ago, but this has produced no measurable increase in overall happiness. On the other hand, it has become a much more unequal country, but this inequality doesn’t seem to have reduced national happiness
On a personal scale, winning the lottery doesn’t seem to produce lasting gains in well-being. People aren’t happiest during the years when they are winning the most promotions. Instead, people are happy in their 20’s, dip in middle age and then, on average, hit peak happiness just after retirement at age 65.
People get slightly happier as they climb the income scale, but this depends on how they experience growth. Does wealth inflame unrealistic expectations? Does it destabilize settled relationships? Or does it flow from a virtuous cycle in which an interesting job produces hard work that in turn leads to more interesting opportunities?
If the relationship between money and well-being is complicated, the correspondence between personal relationships and happiness is not. The daily activities most associated with happiness are sex, socializing after work and having dinner with others. The daily activity most injurious to happiness is commuting. According to one study, joining a group that meets even just once a month produces the same happiness gain as doubling your income. According to another, being married produces a psychic gain equivalent to more than $100,000 a year.
If you want to find a good place to live, just ask people if they trust their neighbors. Levels of social trust vary enormously, but countries with high social trust have happier people, better health, more efficient government, more economic growth, and less fear of crime (regardless of whether actual crime rates are increasing or decreasing).
The overall impression from this research is that economic and professional success exists on the surface of life, and that they emerge out of interpersonal relationships, which are much deeper and more important.
The second impression is that most of us pay attention to the wrong things. Most people vastly overestimate the extent to which more money would improve our lives. Most schools and colleges spend too much time preparing students for careers and not enough preparing them to make social decisions. Most governments release a ton of data on economic trends but not enough on trust and other social conditions. In short, modern societies have developed vast institutions oriented around the things that are easy to count, not around the things that matter most. They have an affinity for material concerns and a primordial fear of moral and social ones.
This may be changing. There is a rash of compelling books — including “The Hidden Wealth of Nations” by David Halpern and “The Politics of Happiness” by Derek Bok — that argue that public institutions should pay attention to well-being and not just material growth narrowly conceived.
Governments keep initiating policies they think will produce prosperity, only to get sacked, time and again, from their spiritual blind side.
David Brooks
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Does having more money make you happy? I know I am happier. But that is because I see myself as more successful when I have more money. That sounds materialistic but when I have more money it means I am hitting my goals. And that makes me feel good. Do I consider myself better than someone with less money? No. It’s just a personal thing. As a trader if you are not making money you are not going a good job. And I like to see my account balances get higher every month.
Trading becomes like a game. The Account Balance is the score and the market is your playground. When you know the rules and how to play you can make your score go up almost at will. It’s an amazing feeling.
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Dave Brooks ,you are a wise man.so true..Having relationships of trust,peace and security give a fullfilment and a worth that leads to an exciting and yet asatisfying outcome from day to day.The hardest people Ifind to have a cnnection with are those who are so focused on themselves and their earthly endeavors of attaining,that they do not have the best gift to give to others , that is the gift of time to be with someone,of the 6 ways of loving genuinely, giving someone time is huge,we all have the same amount. Treasure the one who is willing to take time with you.God always will. dave
Money buys me freedom, to be free from punching a time clock, free to spend time with the ones I love, and above all, you don’t have to kiss anybody’s ass.
What a message David, thanks.
I wish I could read this wise advice last week. It is more important to spend times with the ones you love! My daddy died, and I wish that I could spend more times talking to him last week. It is too late now! I learned the lesson and now, I will spend times with my husband, my children, and other family members more everyday.
It is better and easier to be happy to be rich, slim and healthy than poor, fat and broke. But health can not be purchased – directly. However the most important of all is what goes on in one’s head.
It appears to me that Allen is philisophically minded (as I am) so I would like to share some thoughts from my favorite book. Please excuse me if this seems long winded…:-)
” All truth: material, philosophic, or spiritual — is both beautiful and good. All real beauty — material art or spiritual symmetry — is both true and good. All genuine goodness — whether personal morality, social equity, or divine ministry — is equally true and beautiful. Health, sanity, and happiness are integrations of truth, beauty, and goodness as they are blended in human experience. ”
Happiness depends on health and sanity and flows from the integration of those things that are important to life. Human experience includes encouraging the attainment of goals. Money is one mechanism that allows for all of the above. In particular, if I can share what I’ve learned with those who would otherwise depend on an increasingly tyrannical government, I will have attained one of my goals in life. Above all however, is the realization that, while happiness is wonderful, what matters most is integrity in regards to those around us. And, as research shows, that leads to the greatest satisfaction.
More money does not make one happier but lack of it makes one unhappy.
Prakash
I am looking forward to the time when I can make “my score go up almost at will” at the present time I am down about 500 and I hope to get happy by the end of the month.
I like Prakashs remark.
Very good thought provoking article. More money cannot buy happiness, because things or possessions do not satisfy. The love of money is the root of all evil. Accomplishments in life can bring happiness when shared with those closest to you. Possessions when shared or given to those in real need can bring a sense of fulfillment in helping others.
What matters most is your relationship with God first and family second to really bring right perspective and happiness that lasts and is meaningful.
There is a say
Money can’t buy you everything,yet without it you have nothing.
All I can say is the mega millions lottery is up to $242 million and Im going to be buying a few tickets tomorrow. We are kidding ourselves if we say we wouldnt like to be rich. I am happy with my life, I am very grateful for what I have, but if I could be rich I would be a really, really happy guy, much happier than I am now. My wife would be really happy too. We wouldnt have to work anymore.
I often felt that you were some kind of ego maniac for labeling yourself “optiongenious”. But, for this article alone you’re “option god”. It’s super; thanks for sharing.
Ainsley.
Glad you liked it. But please dont compare me to God. I am not even a genius. That’s just the name of the site. We went through a whole bunch of names, but this was the most catchy for which the domain name was still available. :). The other one was optiongeneral.com but that just didnt sound right.
As I understand it, from I think it was the book “Thrive: Finding Happiness the Blue Zones Way”, happiness caps out at about $75,000 a year, depending on where you live and what the cost of living there is. Ways to increase your happiness that are not related to money are engaging, diet, exercise, and being around other happy people. You increase your happiness drastically by doing things such as joining a club of some sort that requires attendance at least once a month and also, surprisingly, I believe the statistic is that your happiness increases by about 34% if you have a happy neighbor.
http://www.thehawnfoundation.org/ The Hawn Foundation is an organization that works with children to help them learn “happiness skills” One of the focuses of the “Mind Up” program is helping children develop empathy, which in turn increases their own happiness.
Increasing empathy, in my opinion, is a good place to start if I want to encourage people to contribute to charities all over the world. If we can’t identify with other people, we will not be inclined to help them.
Thank you for encouraging people through this site and your services to help others. Keep raising the bar!
The meaning of everything is the meaning that I give it. This may be said by each of us. If money means happines to one and not to another that is the meaning givin to it by that person. Money to me is a tool to be used to trade for things in life that are of value to my family and myself. I trade for the fun and challenge of the trade, when one is succesful in a trade it can be very rewarding. Merrill
My thoughts on money (and paying the rent): I was laid off 8 months ago, haven’t succeeded in obtaining employment, need an income, have recently opened and funded my thinkorswim account, and am studying trading iron condors (your specialty) and how to adjust them when the underlying approaches one of the sold legs. One little problem: May 2010, IE the next FLASH CRASH cometh and nobody knoweth when. Check out the April / May 2010 performance of a few dozen of your competitors (several website names removed) and notice that ALL these iron condor advisories lost between 70 to 100% in April / May of last year. Wow am I ever excited to trade I.C.’s and wipeout my life savings in the next debacle / computer glitch or what?!?!? Do I sound angry? I sure hope so! How did you do in May 2010 and what is your solution for a person to achieve the 8% a month return that you state without losing 90% of his or her life savings in the next wipeout / meltdown / debacle / flash crash / computer glitch / wall street bullshi_??? When it’s the first of the month and the rent money is due, philosophy doesn’t pay my bills. Cash alone does. The 1 to 9 reward to risk ratio of I.C.’s is a drag. I am not willing to risk 90% of my life savings to make 8% a month unless I find an acceptable solution to the dilemma above. I await your response. Sorry about the hostility. Its focused towards wall street and the clueless regulators, not you. ~ M
Number 1. You dont play with money you can’t afford to lose. If you need to pay the rent, you need a job not a trading account. Sorry but that is just the way it is.
Number 2. I lost money in May 2010 but it was less than 50%. And I lost that, not because of the flash crash but because I got greedy and did not exit my trades when I was up money. I could have had a decent month and avoided the whole flash crash thing altogether.
Number 3. You dont put 100% of your money into iron condors or any one asset class. Hedge your bets.
Good luck in your quest to find the holy grail.
David Brooks sometimes says some sensible things but he is sometimes the dullest writer on the planet. My answer to this question about money and happiness is simple: Chalk and cheese, chalk and cheese. You cannot put a figure on Happiness v. Money or Good Relationship v. Money.. They are two utterly different phenomena. Take a single person, with a cat.. Would he or she be happier with a lot of money than with a little? Again, a silly question. Best to put it another way. Scads of money doesn’t necessarily make you happy. Take Richard Fulk. I have never seen an unhappier looking man – nor Grover Norquist, for that matter. Norquists has lost the bioligical ability to smile (if he ever had it). Everything is dead serious, with the accent on the first adjective.
So the question should be: all other things being equal, is it more gratifying to have enough money to get by or to be down and out, as so many Americans are RIGHT NOW? The answer is a no-brainer, surely. Money opens up possibilities so that, should you want to, you can eat – go to a conference on Lepidoptera in Iceland. You might be as unhappy as hell in either situation. You might be unhappy anywhere. But the point is you would be somewhat more miserable if you wanted to eat, or go to the conference and couldn’t because you were broke.
Money won’t buy a good relationship. Lack of money tends to harm a good one, partly because you worry about money all the time – and that’s puts anyone off, including yourself. The only way to have a good relationship is to find a good partner and love the bejusus out of him or her. Money might be a minor help in the relationship. But it sure as hell isn’t minor if you want to go to that conference. I know. I just had to turn down the invitation because I was broke. It makes me madder than hell. That’s why I signed up with the option genius. I don’t want happiness (a really stupid aim). I want some more cash. Not a lot more. Just some – you know, about 1000 per month.
Desire for anything more would be greedy. Poor Richard Fulk: he is unhappy, greedy, rich and still, like Richard Murdoch, hungry. Their hunger can never be satisfied. They are ‘rich’ and they are in hell. For myself, I can live on very little. But a little more would be very useful. I ciould get my grandson a better guitar, instead of saving, and saving, and getting it to him posthumously!
More Money=Happiness?? well I dont know. Maybe its not about happiness after a certain point. Maybe its all about winning..I dont know. Sorry, I aint philosophical!!
I love my job and love waking up for it..So more money would not mean quitting my day job.
I have a great family and I dont think our happiness measure would change with more money..
I trade not for a living, but for the fun of it. I love trading stocks and options. If I win on the trades, I am happy, heck even if its breakeven I aint sad..
I agree more money makes me happier.Then again some people say true happiness comes from within.I’m a trader myself and I love seeing my account balance go up on a weekly basis.Make me feel like I’m doing something right.After all that’s the point right?To make more money to provide a better quality life of life for you and your family.
it is true. if u r successful u will be able to make other people happy, by doing some charity work and involving your self in social activities.
kamlesh
Happiness is a state of mind. As is material well being. Eastern philosophies and cultures have known and espoused this since several millenia. Some cultures and societies are just waking up to it… maybe!
As for Sandra Bullock and her husband, it is not for anyone else to comment. It is their personal life to be to be let alone. Just because she is an actress does not give anyone the right to intrude into or comment on her personal married life. Judge them not by one’s own standards which under rigorous scrutiny may aslo be found wanting. It is perfectly possible that they both share a bond that goes well above such corporeal matters. Only shallow minds think thus and equal sexual fidelity to real love and committment.
“Myself when young did oft frequent
Doctors and Saints and hear great argument
About it and Around it but ever more,
Came out the same door as in I went.”
That quote is from Khayyam, a mideaval poet/philosopher who belonged to one of the older and glorious cultures of this world, now long past – Persia. Today, nouvou riche countires are bent on starving the children of his ancient land, bent on wiping out a culture on flimsy pretexts in the name of global collective good and happiness. We all know the real motive – same as in Iraq -OIL.
Equally, many countries in the middle east exhibit poor tolerence to other cultures and religions and add to global strife.
For happiness to spread globally let the western world reduce its material consumption by half and share with others not so fortunate. In return the let the older cultures rich in philosohy and widom share it with the new cultures and show them the emotional and cerebral path to achieve happiness.
Id not see it happening anytime soon. So let’s leave happiness for some other time, some other place, some other forum and get on with what seems the primary objective of this site… making money!
Of course, it is possible – faintly but disctinctly possible – that the primary objective of this site is not making money…