How To (Potentially) Buy Happiness

We’re all familiar with the old adage “you can’t buy happiness”. But is this really true? In my experience, both from my own life and working with thousands of clients over the last 15 years, having your financial life organized is certainly an integral component of happiness. For the majority of people, happiness is determined by being able to have what you want, and having everything that you want costing less than what you have coming in.

So if your wants are minimal, you can certainly be very happy with not a lot. But if your wants are abundant, you’re going to need an abundance of money too. In my opinion, unhappiness simply stems from what you want not matching up with your reality.

It’s for this reason that a lot of people struggle with finding happiness in their working years. They want a lot, but they don’t manage their money in such a way that they are able to have a lot. This creates a mismatch that inevitably leads to unhappiness.

Having your financial life in order on the other hand, means you don’t have to worry. For
example, you might ponder over what flavor of ice cream you want, but you never have to worry about if you can have the ice cream. This ice cream analogy is the perfect metaphor for financial happiness.

So how to achieve this?

When it comes to money, boring is GOOD! Being boring and normal with your money is
usually what produces the best results. If we have predictable income that exceeds the cost of our wants, then we are in a great place. Consistency and regularity of income are key.

The real icing on the cake (if we’re continuing with the dessert theme), is procuring methods to maintain this income without working as much, as this really takes the strain off. You can still choose whether or not to work as hard as you do, but not having to work indefinitely for what you want is where the magic lies.

Let us define “rich” as having passive income that exceeds your expenses. And let us
assume that having passive income that exceeds your expenses (lightening the professional burden to generate active, or earned, income) will make you happy.

Therefore, money can indeed buy you happiness. But only if spent (or invested) on the
things that you truly want. So the question is, what is it that you want? What is it that is going to generate the most feelings of happiness for you?

According to research by Harvard Business Review, 80% of people surveyed reported
deriving more happiness from buying experiences than from buying things.

Buying back time by delegating undesirable activities also appears to cause significant
increases in happiness. As part of a 2017 study*, 60 participants received $40 to spend on a time-saving purchase. On another weekend they received $40 to spend on a material thing.

Buying time led people to experience more positive moods and reduced their feelings of time pressure. Yet when asked how they would spend a $40 windfall, only 2% planned to make a time-saving purchase. So whilst in principle, people may think that buying “things” or experiences is going to make them happier than buying back time, the reality may be a little different. This makes sense as time, after all, is our most valuable resource.

As for me, my personal favorite way to buy happiness is to buy time. Nothing pleases me more than the ability to do anything I want at any given moment. Not everyday is like this, of course, but those days certainly are some of the best for me. This is only possible if there is enough wealth or passive income streams to sustain your lifestyle.

Another pleasure is having the money to pay extra for time-saving experiences. Disney charges materially extra to skip lines, but it’s worth it if you want to spend your day riding the rides instead of waiting in lines. Another important form of happiness that money buys (and what I work with many of my clients to achieve) is the peace of mind of knowing that they are financially stable. I’m not sure that it’s consciously appreciated enough.

People sometimes get so immersed in work and generally being “busy” that they don’t often internalize the value of financial stability. The knowledge that your bills will be paid, that you have access to world class healthcare, housing, food and clothing is invaluable. If this is accomplished with passive income your financial plan is a success – once again, happiness is bought.

The distant third form of happiness money buys is access to exquisite experiences. Have
you ever sipped a $50 glass of port? Or heard music played from a $100,000 sound system? Ridden in a car with a V12 engine? Flown to a remote island in a private plane? All these experiences cost money and, while none is necessary for true happiness, I assure you none of these experiences would ruin your day!

Whether it’s your time, peace of mind, or quality experiences, the claim that money can’t buy you happiness is absolutely correct – and, at the same time, couldn’t be farther from the truth.

Here’s to your wealth,


Michael W. Hanna

Michael Hanna is a registered representative of and offers securities, investment advisory and financial planning services through MML Investor Services, LLC. MEMBER SIPC. WWW.SIPC.ORG. 420 LEXINGTON AVE, SUITE 2510, NEW YORK, NY 10170, (212) 578-0300.

Representatives do not provide tax and/or legal advice. Any discussion of taxes is for general purposes only, does not purport to be complete or cover every situation, and should not be construed as legal, tax or accounting advice. This article is educational and is not advice or a recommendation for any specific investment product, strategy, or service. The views and opinions expressed are those of Michael Hanna only. Any examples used are generic, hypothetical and for illustration purposes only. Investing involves risks, and past performance is not indicative of future results. Clients should confer with their qualified legal, tax and accounting advisors as appropriate.


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