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- Can You Buy Happiness? - December 26, 2022
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.
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.
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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