I’m happy to see Mr Ritholtz take on one of my pet/favourite topics: the connection between wealth and happiness. His review of the latest Pew research is worth perusing: the findings of the recent survey agree with what’s been said before. That is:
- More money = more happiness, until basic needs are met. Then there is precious little correlation between the two.
- Despite having very high relative incomes, Western Europe/US/Japan just don’t seem as happy as several developing countries, particularly religiously-devout Latin American ones.
- Beyond basic needs, money spent on items gives less happiness than money spent on experiences. The latter includes charitable donations. So ‘bang for buck’ goes to buying better experiences.
- An interesting angle here: Ritholtz quotes another survey, showing the wealthy get considerable pleasure from saving/investing. Maybe part of the reason they’re wealthy…?
This all agrees with my interpretation of the ‘extreme retirement’ movement. Spending little on items, but enjoying experiences such as travel. Enjoying saving/investing, with the intention of creating a passive income. Instead of working for a fancier house/car/stereo, minimising expenditures to allow more time for those valuable experiences. Sounds like a way to maximising happiness, frankly.