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I went to the mall the other day to pick up some family Christmas presents, and boy was it packed! What happened to all the doom and gloom in the media, complaining about inflation and recession fears?
Apparently, according to research conducted by Ipsos, who surveyed participants from Asia, North America, South America, and Europe:
“85% feel excited about celebrations and one-third on average feel more excited than last year. For many the party must go on, with Germany, the US, and the UK leading the way in saying rising costs will have no impact on their celebrations.”
So, I guess retail therapy is still alive and well! I’ve not a fan of retail therapy (except for that time I got addicted to luxury purses), but is there a way to spend to increase happiness?
I know in the FIRE community, we talk about how to optimize spending and how to buy back our time which, to me, is the still the best thing that money can buy.
But as I said before, the journey to FIRE isn’t meant to be a death march. If it’s not sustainable, it’s not achievable.
So, you need splurges and milestone celebrations along the way. But, maybe there’s a way we can splurge better? Is there a scientific way to hack your brain in order to maximize your happiness?
We know hedonic adaptation happens over time. The first bite of a soft, moist chocolate cake tastes amazing. But the 2nd, 3rd and 4th bites? Less and less amazing. Eventually your brain gets used to it, and you need more and more to feel the same level of happiness. It’s the same as buying stuff. I know because that’s exactly what happened when I bought luxury handbags.
But what if you could maximize the dopamine in your brain per dollar spent? What if we could optimize happiness, the way we optimize our spending and our portfolios?
To do this, let’s look at how happiness works. The way I see it, our happiness can be broken down into two categories:
One: Our day-to-day emotional wellbeing.
Two: Our overall life satisfaction.
The latter takes a lot more time and effort, and sometimes you need to build a community, build your passion, or work on yourself with therapy and mindfulness to get there, but the first one is more attainable with some changes you can make right now.
Here are 5 scientifically proven ways to buy happiness:
Buy Experiences Over Things
A study from the Review of General Psychology found that “allocating discretionary resources toward life experiences makes people happier than allocating discretionary resources toward material possessions.” Also, “thinking about experiential purchases has also been shown to produce more positive feelings than thinking about material purchases”.
Maybe this is why they say, “travel is the only thing you buy that makes you richer?” Bonus points if you can travel with friends or family that you love.
Just be aware that buying experiences the same way you buy material goods can also get old fast. Just like hurriedly checking off a bunch of tourist destinations when you vacation rather than living there like a local, absorbing the culture and eating the local food, if you treat experiences like collecting a bunch of trophies to show off on your social media feed, it can become boring. The first time you visit the Vatican, it might be mind-boggling, but after the 10th gilded dome church and the 15th jewel-studded Jesus statue, you start understanding why tourists came up with the term “ABC” (Another Bloody Church) when visiting Europe.
Sharing experiences with loved ones, gives you the transformative effect of the experience AND the social benefit. Plus the memories they generate will last years later when you look back and reminisce with friends and/or family.
Experiences also don’t have to be travel related or expensive. Take a fun class with a friend or family member. Go out to a comedy club. Go to a museum. Go to a Jjimjilbang.
Plus, with experiences there’s no extra stress in maintaining, cleaning, or storing it. Experiences don’t break, don’t need insurance, and don’t disintegrate over time. They exist as memories in your brain and pictures on your phone and what is life, but a series of memories? On your death bed, you will look back at these experiences, feel the same level of happiness again, and be grateful that you splurged on them.
Spend on Other People
Either through donating to a cause you care about or treating your friends out to dinner or a spa, spending money on other people increases the dopamine in your brain.
This is because it promotes social wellbeing because you’re enjoy an activity with people you love. And social wellbeing is one of the keys to longevity, as shown by the elders in Okinawa (one of the blue zones where residents live past the age of 100) Japan, who have lifelong friends and shared community values.
You can always look back at these shared memories and laugh about them with your besties. Unlike stuff that your brain quickly acclimatizes to, spending on others and sharing experiences will continue bringing you happiness years later.
Buy Quality over Quantity (without getting scammed)
You might be tempted to only splurge on experiences and never on things, but let’s be realistic. You still need things. The trick is to buy it once and have it last for years, rather than having to replace it every few months. That’s why we love our Osprey backpacks. We’ve abused them for over 5 years and they’re still going strong.
This is also true for electronics. Never cheapen out on electronics. We travel with 2 Macbook Airs and they are so worth it! Light and reliable, we’ve never had to take them in for servicing while on the road.
And for phones, because they become obsolete so quickly, it makes no sense to splurge on the latest model. I’d much rather ride the depreciation curve and stay one version behind. That way when I’m forced to, yet again, replace it because it’s no longer being supported, I’m not continuously wasting money. Apple iPhones and Google Pixels are my go-to brands for phones.
I’ve recently discovered that mediocre clothes don’t matter if you have a stylish well-made bag and shoes. They elevate your whole outfit and makes you look put together without trying. So don’t blow all your dough on a fancy wardrobe. It’s more strategic to just buy a long lasting, timeless purse that you won’t have to buy again for another 5-10 years, and shoes that look polished and are comfortable. Plus, our brains acclimatize way too quickly to new pieces of clothing, so it makes no sense to constantly add to the landfill by filling your closet to the brim. The stress of maintaining all those clothes and dry cleaning them constantly takes up mental bandwidth. So, focus on quality over quantity. You only need one or two good bags and a few pairs of good quality shoes. But don’t get scammed by paying for status over quality.
Why do I say that? Well, I found out about this leather goods maker who buys expensive Louis Vuitton and Chanel wallets so he can dissect them and analyze their material costs. His channel is called “Is it Worth it?” and shockingly, he estimates this $1200 Chanel purse cost only $90 to make, so the vast majority of the price tag is just for status. He recommends lesser known Parisian brands like Polène, which is more stylist, hand-made in Ubrique, Spain (the same town that high end designer bags are made in), more durable, and way better value for money. There’s also a company called Italics which gives you “luxury without labels”. You get the same quality of goods made in the same factories as the high end stuff, but you’re not paying for the label and the status.
I’d rather own Louis Vuitton via my International ETFs. If other status-driven people want to be tricked into buying overpriced bags, I’ll happily take the profits made off of them via dividends.
One thing that’s worked out for me since I travel so much is replacing all my clothes with athleisure wear. They are super comfortable, dry quickly, don’t wrinkle, and take up very little room in my backpack. Plus, they are low maintenance and multi-functional, so you don’t need to own many pieces. I mostly buy good condition second hand Lululemon clothes from thrift stores or Facebook Marketplace. Most have little wear and tear and are 90% off what they cost to buy new. It scratches that “novelty/newness” itch without spending $100+ on each piece of clothing that I’ll just get sick of in a few months. This way I can refresh my wardrobe easily and guilt-free. I also don’t need to stress about ruin them if I accident get stains on them or rip them (If it’s not obvious by now, I’m quite clumsy and abusive to my clothes and backpacks). I love sticking to one high quality brand, which is the most flattering and fits me well, to reduce decision fatigue. Plus, buying second hand is good for the environment and Lululemon lasts forever.
The funny thing is I’ve gotten more compliments on my $5-$15 secondhand Lululemon finds than the expensive $120 Lululemon stuff I bought new. Maybe the people who sold me the second hand stuff just has better fashion sense than me? Or maybe Lululemon is degrading their quality and style over time?
Make Small Purchase More Frequently
A study done by the Journal of Consumer Psychology found that frequency matters more than intensity when it comes to happiness.
This is why you want to conserve your dopamine and spread the hits over a longer period of time, rather than blow it all in one shot.
…Wow, that sounded way less porny in my head…
So, instead of splurging on a one-hit-wonder like a fancy sports car, or a 5-star vacation package to the Maldives, it’s more strategic to use that for re-occuring small treats. For example, buy a smart watch one week, a few bacon lattes (yup, they do exist, and are delicious!) the next month, a pair of merino wool socks two months later, a beautiful leather-bound notebook, and then treat yourself to a Broadway show at the end of the year. Or simply get massages/manicures/spa days once or twice a week throughout the whole year.
That way you can hack your brain to get more happiness for the same amount of money.
Invest in Your Health
Imagine this. You’re given a car. You have no say in that car. It’s the only car you’ll ever have for the rest of your life.
You can’t swap it up for a newer car. You can’t take it apart and re-build it into a better, newer car.
You are stuck with it because that’s all you’re ever going to get.
Knowing this, how would you treat this car?
Would you read the heck out of the manual? Consistently change the oil? Only put premium gas into it? Fix it as soon as there is a tiny bit of rust, so it doesn’t spread?
This is the analogy Warren Buffett used to describe our bodies.
And yet, people don’t treat their health the way they should, knowing that they will only have this one body for the rest of their lives. They forget that once their health is gone, they can never buy it back.
And remember, it’s not only physically health but also mental health that takes a toll when we choose our ego and overemphasize work over our health.
This is why splurging on health is one of the best uses of money. But I don’t mean buying the $200 juice cleanses that the shiny ads trick you into drinking. That’s the same as the LV and Chanel bags trying to trick you into thinking higher cost = higher quality. You can’t work 80 hours a week and then juice cleanse to fix the damage.
Using money to buy back your time, spending time in nature (which can be free!), splurging on self-care (go to a spa or jimjilbang every now and then), buying healthy organic vegetables and meat—that is all money well spent.
You only have one body. Take care of it. Or as Warren Buffett puts it:
“If you don’t take care of your mind and body now, by the time you’re 40 or 50, you’ll be like a car that can’t go anywhere.”
Hope you get some well-deserved rest and relaxation! Happy Holidays and we’ll see you in the New Year!
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19 thoughts on “Can You Buy Happiness?”
I’m also a fan of Warren Buffet. He’s currently 92 years old and he reportedly drinks five cans of Coke every day. His business partner, Charlie Munger, is 98 years old and I’m guessing he drinks even more Coke than Warren Buffet does.
..my prediction for 2023: Warren Buffet goes all in on Bitcoin.
Make small purchases more frequently. That was one I hadn’t thought of. I really like it. Gonna incorporate that into my way of life a bit. Always love your posts and really track with your way of thinking. Good job on the brand name fleeces at the Thrift Store!
Traveling definitely is NOT something that makes me happy.
The hassle, the stress, the long airplane rides, the long lines, the sleeping in beds hundreds/thousands of strangers have slept on, the waking up at ungodly hours to catch a ride to the airport, all the packing and unpacking, the security inspections, all the waiting and more waiting, all the flight cancellations and re-schedulings, all the layovers, all the sleeping in airports, all the sitting in dirty airplane seats, all the jetlags, etc.
I’ve always wondered why other people like to travel.
The one kind of spending that truly makes me happy is BUYING stock investments.
I agree; travel may have once been fairly tolerable and even a bit pleasant, but now it’s just a giant frustration! Pretty much anywhere you would like to go is crowded and noisy, you get nickel and dimed left and right. Cigarette smokers seem more prevalent in other countries. Tourists have targets on their backs. I used to have a huge travel bucket list, but it’s dwindled considerably in the last few years!
Thank you so much for saying this! I’ve thought this for years—I definitely can’t relate to the people who “love to travel.” I mean, I like actually being in new places and exploring, so I do force myself to go places, but the whole hassle of getting there (and knowing that I’ll have to go through the same nonsense to get home) really does take away some of the enjoyment for me. Just my opinion.
Wow !! So true !!
Once I’m at the destination it’s great, but the actual travel part is agonizingly unpleasant… My prediction is that travel will continue to be miserable until we have Star Trek style “Transporters”.
My secret for wealth is the Dopamine surge. I get massive dopamine surges seeing my savings and brokerage accounts ever growing and flush. I don’t get pleasure out of spending and get down right apprehensive paying bills online or at the register
Yep. I’m the same way as many here:
Spending money does not bring me any joy.
But saving money and seeing my investments grow make me happy.
Can you buy happiness?
Absolutely yes, if you spend the money on the acquisition of memories through experiences!
The mystery here is…what do you like to experience?
Damn! Firecracker is looking so hooooooot 🔥🔥🔥🔥 someone pull the 🧯🧯🧯🧯🧯🧯!!
Thanks for the post guys, you have become my personal Heroes.
I find that the experiences I enjoy the most also involve some fairly expensive equipment. I’ve loved fishing from being a young child all the way through retirement. But to catch fish in my area you have to have a fishing boat and all the tackle and equipment that go with it. I don’t care about the equipment in itself, just that it lets me fish. Same thing about my tennis equipment, my hiking and camping gear, my pickleball stuff and a vehicle to get out to wilderness trailheads. It all adds up but it’s all necessary to pursue active hobbies at a high level. I rarely give a thought about owning the equipment, it’s the experiences my wife and I enjoy that count, but without the gear we would not have the same quality experiences.
I don’t think that money buys me joy per se, BUT: I’ve been both with and without it, and being without money didn’t do anything for my morale, that’s for sure!
Hey, is the photo the Venetian in Macau?
Happy New Year, everybody!
Nice post. At the end of the day life is largely about economics. How can we get the most benefit out of our time, energy, and money?
Buying things that you find important, minimally and in quality is a strategy I also like to employ. This year I bought a couple of higher ticket items than usual, but I feel good about them. I bought my first brand new mountain bike in over 20 years. Given that I got it at almost 50% off (I worked in a bike shop during the pandemic) and that I kept my last new bike for over a decade, I don’t begrudge myself my Trek Roscoe 7. I also waited over a year for it to arrive due to supply issues, so you can imagine my excitement when I finally got to assemble it and take it for a ride.
For Christmas I bought the spouse (and myself) an entry-level Italian-made automatic espresso machine. After years of coffee made with grounds and reusable pods in a Keurig, the taste of freshly made espresso is a joy. And while the machine was fairly expensive at $1,100, if it lasts the 10,000-15,000 cups as advertised the total per cup price will be somewhere around $0.60, including beans and maintenance. That’s a far cry better than using pods or buying at a coffee shop.
I research the heck out of my bigger purchases. That has the dual benefit of giving me the joy of anticipation of a new toy and increasing the odds that I end up buying something with good value.
Regarding sports cars, I still have my ’99 Miata that I bought in 2011 for $9,000. If I were to sell it today, I figure I could get… roughly $9,000. Add in the $4,000-$5,000 in maintenance and upgrades I spent over nearly 12 years and I’d say I’ve gotten quite a bit of enjoyment out of it for the money spent. It’s a modest sports car, but far more reliable and cheaper to maintain than the boutique brands. And although the $150,000 Porsches were far faster around the Mont Tremblant Circuit at my last track day, I’m not sure I was having much less fun. Less than $300/year for full insurance coverage is nothing to sneer at, either.
Regarding travel: I’ll be spending the day in Brussels tomorrow. In the past month or two work has had me a day or two each in Rome, Tokyo, and Mainz, Germany (nice Christmas market). I could take it or leave it at this point. Even though I could travel all over the world for virtually peanuts and have the time to do it, I rarely do anymore. I have 11 days off in a row in January – I plan on working on my pilot’s licenses and sleeping in my own bed.
Thank you for this post. It served as a great reminder to me regarding how little you need with the ‘right’ quality products. I know this firsthand because several years back I spent a year backpacking around Australia and needed to carry everything for a year (I loved refreshing my wardrobe at the local opportunity (thrift) shops). After reading your book a year ago, I realized I could go back to my nomadic ways if I’m intentional now.
Your new bag is stunning, if I had not ‘just’ purchased a new bag I expect to last for 2/3 years on a Black Friday sale I’d place an order from that company right away.
I haven’t made it to a thrift store in person since well before the pandemic, but I’ve had good luck getting used pieces that I know I want at poshmark and ebay. They are not typically $15 — more like half off — but gently used and exactly what I want, at least thus far. Like a Boden top in a pattern that came out five years ago that I never got at the time and was bummed when it was out of stock. I got a nice Fossil bag too. If you know the name of the pattern and style and ideally size, searching is easier online than in person.
In my personal opinion, happiness can be achieved to a certain extent.
I think happiness cannot be bought. But I also believe that people who are not happy are interested in such questions. This may mean that there are some psychological problems that need to be solved. You probably don’t know how to solve such problems. But I will tell you that an effective method is communication with a therapist. Here you go better help code In this reference you will be able to find interesting information for yourself, which I hope will help you solve these problems and become happy.
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