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Does Money Buy Happiness? Evan’s Theory

How often do you hear that cliché statement, “Money doesn’t buy happiness”?  Well I think it does, and I have a theory on it!

Money Does Buy Happiness Theory

It is only a theory because I can’t prove it, although I am sure someone much smarter than I can prove it.  I was having a glass of whiskey in a co-worker/buddy’s office after we both had particularly rough days when a 3rd co-worker came to join us.

This particular co-worker, is a very nice woman but clueless to an annoying fault. I can’t guess how old she is (has to be mid to upper 30s) but still lives at home with mommy and daddy in a ridiculous house, and goes with them to “The Club” for dinner every weekend.  I once argued with her that her car was amazing (she was driving in an X5 BMW), and it was only after I proved to her that the MSRP on her car was more than 60% of her fellow American’s yearly income that she finally got where I was coming from.  Ms. Co-Worker does health insurance and not really financial planning.

Maybe it is because I work in a financial planning office with a lot of high net worth clients  but the conversation quickly turned to money, and I don’t know where it came from but Ms. Co-worker stated matter-a-fact that “Money Doesn’t buy Happiness.” I don’t know where it came from, but without thinking I shot back, “It is because you never had to worry about it.”

As we discussed the topic and drank more whiskey I came up with a theory on the dry erase board in my buddy’s office.   I can’t possibly be the first one to think of this theory, but I didn’t really research it before writing this post (maybe one of my smart readers can point me to further reading on the topic).  I should mention when describing theories or estate planning ideas, I like to draw pictures and flow chartsThe Wife hates it.

Does Money Buy Happiness

Money Brings Happiness in Diminishing Returns

If you hand someone $50,000 who has nothing – you tell me that money didn’t just bring them happiness!   That being said go hand Bill Gates $1,000,000 I don’t think it would change his life much.

Why Do I Believe that Money Buys Happiness?

Girl with Red Balloon replied to my Question “Does Money Buy Happiness” and I found her reply really interesting:

twitter with Girl with Red Ballon

My immediate reaction, was doesn’t she mean Yes then – Money can buy those experiences and things that make us happy.  Unless she meant the more abstract as to whether the paper itself brings joy, in which case I can’t say that I agree with her either, knowing that I have that paper to buy stuff/experiences/food does bring me happiness.  (Side Note: She is really active on Twitter you should check her out).

I think it has to do with the fact that money is the only tool for financial freedom in our modern world.  I can’t hunt, don’t like to fish, I am fond of my home, would like to pay my hosting bill so you can read me getting bashed when I talk about teachers.  I need cash to survive, and yes, without it I’d be pretty sad.

If you were wondering how the conversation ended with Ms. Co-Worker, she dismissed my awesome drawing and continued the conversation about how she didn’t care about money with the sentence, “When I was in the Hamptons last weekend…” It was at that point I put my glass down and said I was out!

Thoughts? Does Money Buy Happiness?



  1. Ha! You’ve drawn some interesting conclusions regarding Ms. Coworker, and I agree that it’s very different for those who have never had to worry about money.

    “Money can’t buy happiness.” The first image that comes to mind when I hear anyone say this is the proverbial billionaire with no family, no real friends, who treats money like it’s the be-all, end-all. If you’ve seen “Family Man,” Nicholas Cage’s character IS the guy who proves that money can’t buy you happiness. (Of course, that’s a movie, and it deals heavily in extreme circumstances that aren’t applicable to the every day man.)

    Coming from someone who knows what it’s like to donate plasma so I could eat, I will say that having money brings me comfort. Knowing that I can buy food makes me happy. But beyond the basic necessities of life, I don’t think money makes a difference. If I couldn’t pay for Internet, would I be sad? Well, I wouldn’t be shouting from the rooftops, but I could find free sources of Internet. (The library springs to mind.) If I couldn’t afford a self-hosted site, I could create a free one on Blogger or Wordpress. I think not having money for things that bring you happiness means that you find ways to have free fun (which is usually the best kind anyway) and you get creative.

    This comment is too long! Lol, thanks for linking me, Evan.

  2. I don’t believe that money can buy happiness — and neither can the things you buy with money. Happiness comes from how you view your life. But, money can certainly help to make things more comfortable, especially if you’re living paycheck to paycheck or are very poor. So in that sense, it can give you a better shot at happiness, since you’ll likely be spending less time worried and stressed.

    • It seems like from the comments by you and red – that it is the very fact of saying “money buys happiness” which is the problem.

      You Start witih “I don’t believe that money can buy happiness” and end with “it can give you a better shot at happiness, since you’ll likely be spending less time worried and stressed.”

      It is almost like you don’t want to believe it? Comfort to me is a sense of happiness.

  3. Hey Evan,

    Money can buy certain forms of happiness, to a degree. It can’t buy you love, or friendship (it can buy you friends, but that’s not real friendship…), and it certainly does buy you food, shelter, and clothing.

    However, is the difference between driving a Mazda 3 and an X5 the same as the difference between taking a bus and driving a $4000 car? I don’t think so. Being able to graduate from public transport dependency to having your own car is a much bigger jump, keeping up with the Joneses aside.

    Money will help me get out of the rat race, so in that sense, money will buy me happiness. Once I’ve accomplished that, though, more money makes it more comfortable, but the biggest jump was being able to leave the rat race in the first place. Like everything else in economics, there are diminishing returns. That’s a great point that you brought up.

  4. Hah, I would of loved to overheard that conversation. Ms. Coworker sounds oblivious to the fact that she was handed life on a silver platter…

    I agree with the statement that money doesn’t buy happiness, but it is the instrument through which we can buy experiences/things that make us happy. I think that good relationships are also ESSENTIAL to having true happiness, and THAT money cannot buy!

    • Ms. Co-worker literally has no clue. Today she bragged that unlike her non-working mid 30 to low 40 female, unmarried friends – she hasn’t hit up her trust fund. She literally said that.

  5. I think that when you don’t have it, money is seen as the thing that can buy happiness in the form of a comfortable home, enough food, and time off from work to spend with friends and family. Low wage workers who are struggling to make ends meet would certainly find having enough money to get by to be a certain kind of happiness.

    It’s not about excess in that way. It’s not the happiness of a shiny new BMW, but the freedom to take an afternoon off of work to play at the park with the kids, or have a sick day without worrying that you can’t pay the rent that month.

    Once basic needs are met and a person is able to sleep at night without financial worries, then perhaps money can’t buy happiness/peace of mind/contentment. But it’s awfully hard to have that without the basics met.

    • YES!

      “but the freedom to take an afternoon off of work to play at the park with the kids, or have a sick day without worrying that you can’t pay the rent that month.”

      I LOVE IT

  6. LOL! Money isn’t everything, but it sure beats whatever’s in second place!

    Define “happiness.” If expensive cars and dinners out at the country club make you happy, then sure. Money buys happiness.

    What money doesn’t buy is contentment. That’s quite a different thing and, IMHO, a better thing. You don’t need money to find contentment.

    • The term happiness is absolutely vague but I think I know what it means for me…freedom. Freedom to do what I want when I want. Is that telling the boss-man, “Peace I am out” or is it just going to dinner without having to worry about the mortgage or maybe taking that vacation.

      In my opinion the connotation of contentment is better but easier to obtain.

  7. I am definitely another vote for money can buy happiness if it gets you out of poverty.

    I think the “money doesn’t buy happiness” line comes from a couple of things. I almost think it should say “consumerism doesn’t buy happiness.” As you get more stuff, you have more things to take care of, more things to break, more things to organize and keep track of. You may have to work super stressful jobs to keep up with your expenses. Even if you don’t spend it, you have to worry about how to invest it and protect your net worth, etc, etc.

    I certainly don’t mind having those problems, but I think for most there is a happy medium. You have enough money to get your basic needs met, but not so much that you have to spend every spare minute of your life either earning it or worrying about it.

    Your colleague lacks some serious perspective.

    • My colleague is an idiot, but ignoring her…I think everything you said basically defines diminishing returns which I agree with

  8. OK, to somewhat play devil’s advocate here, I am not so sure we should jump so quickly to bash this girl (although I really really want to!) that Evan works with. I could be completely wrong but I am going to go out on a limb and say that 99.9% of the readers and responders on this FANTASTIC blog were not born into high net worth families, and are not even close to be considered high net worth individuals (yet!).

    However, if you might be considered high net-worth by others (whether inherited or self-made), you probably don’t consider yourself to be one, as you may look at others wealthier than you as just that…see? I feel like it’s all about perspective. You can’t say that the co-worker is happy or not because of money, because she has never gone beneath a certain level of wealth. We all grew up with loving parents (I hope), but with different financial status. I know it may seem crazy to say, but a BMW X5 might sound amazing to drive, but if you’ve been riding in one since birth, it may not seem like the biggest deal…and if that wasn’t the case, there wouldn’t be ferrari’s, lambo’s, and bugati’s to satisfy the “ultra” high net worth’s desires. Everyone has their own levels of status and their own goals to achieve…and not just with cars.

    So based on my observations (I’m trying to sound somewhat scientific to the theory), I can not agree 100% with the theory that money buys happiness. However, maybe we should expand the theory a bit, because Evan’s chart (while very pretty) shows something very important and true: An INCREASE in one’s wealth (money) can create (buy) happiness. Some may say that I’m arguing the same point, but I know a bunch of millionaires (self-made and inherited) that always wished they were wealthier or happier, and it’s not because they’re stuck up a-holes or spoiled, or any other adjective you want to use…it’s because we all have our own values and ideas of wealth; and while we will always be striving to be as wealthy (or wealthier) as someone else, someone wealthier than you, someone below us will always be working to achieve the status we’re at now.

  9. As a relatively poor person, I definitely think that money can buy happiness. It’s frightening not to have enough money to pay the rent or buy food. At the same time, I think that many people who are born into money don’t realize how lucky they are, as there are cases far worse than the rich coworker who insists that money can’t buy happiness. One constantly hears of the heirs of millionaires who could have made wonderful lives for themselves, yet do something stupid like go on drugs. Cameron Douglas comes to mind.

  10. I see money simply as a way to remove so many obstacles and stresses in life and allows us to focus on the things in life that we are truly interested in and want to pursue (eg. charity, travel, helping others)…often things that don’t provide a great means for money.

    So in this sense, I think money, indirectly, leads to happiness…but not because of the material things it can by, but because of the intangible things it allows us to do.

  11. Everyone is assuming that poor people are unhappy. I grew up worrying about money but I had a happy childhood and I don’t think the fact that I have more money than my parents ever did makes me any happier now than I was then.

    I think money can bring some monents of joy, especially if you fall into a bunch of it at once, but long-term happiness is independent of money.

    I have chosen to take a pay cut to do a job that makes me happier and (as a teacher), I could have chosen a career that makes more money. I still have that option. But I’m happy as a teacher.

    • I don’t think poor people are unhappy. I think that 0money sad face indicator can be applied to anyone’s starting point where they are unhappy.

      “I think money can bring some moments of joy…but long term happiness is independent of money”
      – That was the exact same point the Wife made when she read this point.

      Considering your last two points you may like:

      and if you really want to hate me:

      • I enjoyed the article on things to consider besides money. Autonomy and mental stimulation are essential to me for any long-term position,but benefits are pretty high up there too.

        I put so much effort and pride into work that I can’t imagine being very happy if I couldn’t find fulfillment in my job, even if the pay was great.

  12. I am a big believer that money isn’t everything…that being said, it does help with a lot of the stresses in life! I don’t think money alone can buy happiness. I think the reason people have trouble agreeing with that statement is because it’s so broad. Nothing ALONE can buy someone happiness. It’s a bunch of things together that do it.

  13. I love the perspective that people that have never had to work for anything gives. It’s frustrating, but makes me just want to work that much harder to achieve what they were handed 🙂

    I do think that money doesn’t buy happiness directly. You can buy excitement, fun, fame, and maybe even fleeting joy to a point, but long lasting, real happiness is hard to quantify especially between different people and their situations. Some people are only happy when they are serving others which costs nothing but time and some or only happy when they are traveling in a new land which costs plenty.

    • “Some people are only happy when they are serving others which costs nothing but time and some or only happy when they are traveling in a new land which costs plenty.”

      Serving others which costs nothing? How are they eating? When serving others you are not working – so they need income or assets else where to sustain that. Think about it, if you were one of those awesome people who loves to help others, how much happier would you be with a couple hundred grand in your account so you can help people EVEN MORE.

      • 🙂 Always stirring the pot over here hah

        I didn’t mean they don’t have a job, but am saying they aren’t happy in their job. They serve people to make themselves happy on their own time..but you make a good point.

        Like I said, this question can never be answered in a way that suits everyone 🙂 (I think many, myself included, will argue against money buying happiness to the end of time because it gives us hope that the world isn’t as bad as it seems, that it doesn’t really revolve around money and that there are more important things out there)

  14. You know evan you are right. I made alot of money at a business that my my wife and I own. The work itself was so stressful that we decided to change business even though our other business was doing great. we sold it and opened up a service business. now people come to me and i dont have to go out and stress myself. I am truly happier without the stress though my happiness would not be possible without a real life key component “money”. Technically sir you are right!

  15. This is a very complicated topic, but here’s my take… I personally know a lot of extremely wealthy people–$50 million to a few billion. I have learned a lot from them over the years, and I think money buys happiness if you have everything to go along with it. This is not as simple of a statement as it sounds. First, ‘everything’ depends–the richer you begin, the more you require to be happy; if you don’t grow up wealthy, you will be unhappy if you are always surrounded by wealthier people than you; and if you grow up poor, it may take less, but it could take more. It’s all about perspective–which comes from experiences, perceptions, and other psychological attributes-out of the scope of this comment. Second, ‘everything’ also includes health, self-esteem, and whatever else a person values. Your silver-spoon co-worker has money, but she isn’t happy. Therefore, she concludes money can’t buy happiness. She’s right, though, because she obviously doesn’t have everything she wants. As far as relationships, in the context of marrying for money, I think many people who do this are either morally bankrupt, desperate, or incredibly shallow, and many are able to convince themselves that they actually love the person for some period of time. Two of the five people I know who blatantly married for wealth are divorced, the others haven’t been married long enough or are contemplating it. Of the two divorces, one is male, one is female. The former lasted about 6 years, the latter lasted 22. She ended up marrying the builder who was making her 12k sq ft home 24k + sq ft. Of the 22 years, I don’t know how many were happy, but I do not have contact with her anymore. Personally, I’m analytical and deep, so kidding myself isn’t going to happen. I would have been far better off financially had I married and divorced at least one of the wealthy men I’ve dated, but it’s just not how I’m wired….maybe I would think differently had I made the mistakes many women who marry for money seem to have made-debt, no education, low self-esteem, child, etc. etc. Rich men seem to love their damsels in distress, which shows how poor they really are.


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