It’s More Important To Be Happy Than To Be Rich By

This article is the final installment of a 14-part series that explored the core tenets of Get Rich Slowly.

Here’s the opening paragraph from my forthcoming book, Financial Fertility: Your Missing Money Link. It’s the sum of everything I’ve learned during my five year journey to get rich slowly:

You don’t want to be rich; you want what you believe the money will buy you to make you happy. Many people mistakenly believe that the former leads to the latter. While it’s certainly true that money can help you achieve your goals, provide for your future, and make life more enjoyable, merely having money doesn’t guarantee happiness.

Many of us (including me) get wrapped up in the belief that having more money is the key to a better life. It’s not, the key to a better life is increased happiness. For some people, that does mean more money. But according to the research Tal Ben-Shahar shares in his book Happier, most of us would be better served by:

Creating rituals around the things we love to do.

Expressing gratitude for the good things in our lives.

Setting meaningful goals that reflect our values and interests.

Playing to our strengths instead of dwelling on weaknesses.

Simplifying our lives, not just the Stuff, the time.

We’re more likely to lead happy lives by putting these principles into practice than by getting another raise at work, especially if the increased income would only lead to increased spending. When we focus on monetary goals, we run the risk of becoming trapped on the “hedonic treadmill” (also known as lifestyle inflation), working harder and harder to make more and more money. This does not lead to happiness.

Sometimes money can buy happiness

Wealth and happiness aren’t mutually exclusive, of course. According to financial writer Jonathan Clements, financial stability improves your well-being in three ways:

If you have money, you don’t have to worry about it. By living below your means, you can obtain a degree of financial control even if you aren’t rich. Avoiding debt gives you options.

Money can give you the freedom to pursue your passions. What is it you want out of life? What gives you a sense of purpose? These are the sorts of things you want to pursue in retirement. Better yet, try to structure your career around something you love to do.

Money can buy you time with friends and family. In fact, Clements says, true wealth comes from relationships, not from dollars and cents. Social capital is worth more than financial capital.

Money is a tool. As with any tool, a skilled craftsman can use it to build something amazing: a meaningful life filled with family and friends. If you’re not careful, if you don’t have a plan, the life you construct with your money can be a tenuous thing, even dangerous.

Lessons learned

Studies show that the pursuit of money is less likely to bring personal fulfillment than focusing on self-improvement and, especially, close relationships with others. Here are a handful of lessons I’ve learned during my research into the connection between money and wealth. I didn’t come up with any of these ideas; they’re products of actual research into what makes us happy:

People who are materialistic tend to be less happy than those who aren’t. If your aim is to have more money and more Stuff, you’ll be less content than others whose goals are built around relationships or mental/spiritual fulfillment. (Life will pay you what you ask of it.)

Over saving does not lead to happiness. While it’s important to save for the future (and to cope with current emergencies), research shows that over saving can actually have a negative impact on your quality of life. If you’re meeting your goals for saving, it’s okay to spend some on the things that make you happy.

Experiences tend to make us happier than material things. We have different reactions to the money we spend on experiences and the money we spend on Stuff: When we spend on experiences, our perceptions are magnified (meaning we feel happier or sadder than when we spend on Stuff), and the feelings tend to linger longer. And since most of our experiences are positive, spending on activities instead of material goods generally makes us happier.

When we lower our expectations, our happiness increases. High expectations come when we compare ourselves to others or when advertising bombards us. We come to accept the things we see on TV as “normal”, and because we don’t have these things, we feel inadequate.

Our expectations rise, and before long we’re caught up in lifestyle inflation. If we can consciously manage our expectations, both financial and otherwise we increase our sense of well-being.

Really, there’s only one-way to ever be satisfied with how much money you have: You must define how much is enough. True happiness comes when you learn to be content with what you have. If you don’t take the time to figure out what enough means to you, you’ll always be unhappy with your financial situation.

How much is enough?

Enough looks different to each of us. It’s not just different amounts of money, but different types of wealth. For me, enough is being debt free with the time freedom to travel the world to participate in the many bicycle events and to train in different environments to enrich my experience of cycling. For you, enough may mean living in a small apartment but owning a boat and having the freedom to sail for months at a time.

To find enough, you have to set goals. You have to look inside to find your morals, values and beliefs that make up your blueprint. It can take months or years to get clear on what makes a meaningful life for you, or it can take a moment to find clarity, once you’ve done this, you can make choices that reflect your priorities.

After all, that’s why you’re doing this. You’re not building wealth just so you can bathe in buckets of cash. You’re building wealth so you don’t have to worry about money, so you can pursue your passions, and so you can spend time with your family and friends.

Remember, my friends: True wealth isn’t about money. True wealth is about relationships, about good health, and about continued self-improvement. True wealth is about happiness. Ultimately, it’s more important to be happy than it is to be rich because success without fulfillment is failure.