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Happiness CAN Buy Money

Updated: Oct 4, 2022

The left prefrontal cortex (or PFC) is part of the brain and is associated with generating happiness. Greater activity in the PFC is related to lower amounts of stress hormones which keeps moods more stable. A study of 1,000 older Dutch men and women’s PFCs showed that the ones that laughed more frequently, strove towards their goals, and looked towards the future, had a 29% lower risk of mortality than more pessimistic peers. There have been numerous studies that tend to show similar results, so let’s see if you can spot the pattern:

  • Thousands of first-year university students were rated on how cheerful they were and roughly 20 years later, the most cheerful were earning approximately 31% more than those that were least cheerful.

  • Happier employees tend to recover quicker from illness and stay home from work due to illness an average of 15 fewer days per annum compared to less happy employees.

  • Professional cricket players that are happier, have higher batting average than more negative players.

  • Happy CEOs tend to employ people that are more productive and generate more profits.

  • Higher salaries at companies are typically earned by people that are happier.

  • Day Traders that keep a good mood throughout the day, regardless of winning or losing money that day, tend to earn better returns over the longer-term.

What does this mean?

We as individuals may be seeking the wrong things. Instead of trying to make more money, try to make yourself happier and the money tends to follow. Spend time seeking out the things you enjoy and that tend to enhance your mood over time. By focusing on yourself you focus on what matters. No one can really tell you what makes you happy, better than you can, but think on this; you can spend money on ‘having’ things, on ‘doing’ things or on ‘being’. Having things means you buy more stuff (cars, appliances, trinkets, etc). Having things tends to have diminishing returns so it’s less valuable to people the more of it you buy (like a drug addiction). Doing things means having experiences, like holidays, travel, family events, parties, etc. Being means devoting yourself to a cause, an idea or something bigger than yourself. Think of volunteering within your community, fundraising, mentoring, or making a difference in others’ lives. ‘Doing’ and ‘Being’ tend to provide the higher amounts of happiness and meaning compared to ‘having’. Ultimately, thinking about what you want is the best way to figure out what you want to spend your money on intentionally, which can make you happier and can lead to more money earned and greater money habits. This is easier said than done, because what we are really getting at here is the grand question of “what is the meaning of life?” and that’s a bit tricky to answer. So our view is to talk with someone that can help you sort out what brings you joy, happiness, delight, playfulness, and lifts you up with someone whether that's an adviser or someone else you know and trust. That person may be a counselor, psychiatrist or therapist, but they don’t have to be. A high-quality adviser can actually do the same thing very effectively. If that interests you, we have more content on the benefits of working with an adviser, that you can watch or read up on.

Written by: Cam Irvine

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