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By Michael Yardney

How to Be Happier with Your Money

You're probably reading this blog because you want to become rich.

But how much money do you need?


A lot of research has gone into whether money does truly make you happy and it has been found that, in general, humans are never satisfied.

We always think that if we had a little bit more money would be happier. But when we get there we are not.

For some people the more money they have the more they want, but the more they have, the paradox is that it becomes less effective at bringing them joy.

I recently heard a story about a wealthy couple who were at a party hosted by a multi – multi-millionaire.

The wife said to her husband: “Do you realise that our host makes more money in one day than you do in a year.”

Interestingly her spouse’s response was: "Yes, but I have something he will never have: enough."

Now that’s a great lesson to learn, isn’t it?

How much money is really enough?

I grew up in a poor household where money was scarce and while I can’t really remember when it was, I know I was quite young when I decided I wanted to become wealthy through property investing after seeing the lifestyle of some of my friends’ parents enjoyed.

What I didn’t realise at the time was that it would take me at least 30 years to develop a big enough asset base to give me the sizeable passive income I desired.

And it hadn’t dawned on me that along the way I would need a real job, I’d have to practice delayed gratification and money discipline, and I would have to work long hours and hard and save, invest and reinvest my money.

Back then I didn’t realise that you need to do the hard work early in your life so you can have an easy life later on.

What I do remember was that I wanted to be a millionaire by the age of 30 – back then (and that was more than 50 years ago) $ 1 million worth a lot more than it is today.

So how much money is enough?

One million dollars might have been sufficient 50 years ago but how much is enough today?

And how do you even work it out?


In his book 30 Lessons for Living: Tried and True Advice from the Wisest Americans, gerontologist Karl Pillemer interviewed well over 1,000 elderly people (mainly aged from 80 to 100+), looking for a source of unique guidance from those who had who have lived “rich and fulfilling lives.

One thing I found interesting was that:

  • Not one person of the thousand interviewed said that to be happy you should try to work as hard as you can to make money to buy the things you want.
  • Not a single person said it's important to be at least as wealthy as the people around you, and if you have more than they do it's real success.
  • No one -- not a single person -- said you should choose your work based on your desired future earning power.

Now to be clear…

  • the elderly didn't say that money isn't important – because it is.
  • they didn't rule out that more money might have made them happier because it most likely would.
  • Remember…any problem that money can solve isn’t really a problem – is it?

But it seems like the elderly people understood the important concept of enough.

Studies show that money does increase happiness.

Research we quote in our book Rich Habits Poor Habits shows there's not even a known satiation point -a higher income makes virtually everyone happier, although each additional dollar delivers less happiness than the one before it.

Interestingly psychologist Daniel Kahneman writes in the book This Will Make You Smarter:

“On average, individuals with high incomes are in a better mood than people with lower incomes, but the difference is about a third as large as most people expect.

When you think of rich and poor people, your thoughts are inevitably focused on circumstances in which income is important.

But happiness depends on other factors more than it depends on income.

In other words, when I was young and saw all those rich landlords and wanted to become one myself, I imagined a big income would make me happier (I was pretty miserable growing up) because I thought about the luxury imported cars they drove and the nice houses they lived in rather than the years of hard work they had to put in and lack of family life they sacrificed.

Just look what happens to all those actors and sporting heroes who earn staggering incomes yet ruin their family lives.

Money Magnet2

So what does make you happier?

Not surprisingly psychological studies have looked into what makes people happy and researchers broadly agree that four major points have a big impact on making people happy:

  • Control over what you're doing.
  • Progress in what you're pursuing.
  • Connections to other people.
  • Having purpose and meaning.

That's it.

You'll notice "more money" isn't on the list.

But you can easily see how money ties into these points.

  • Money can grant you freedom from being locked into a job that you don’t enjoy.
  • Money can provide the tools necessary to achieve progress in pursuing your goals.
  • Money can afford you time off and a chance to spend time with people that matter to you.
  • Money can give you the ability to provide charity and community contribution, bringing meaning and purpose to your life.

Yes, money is important in those areas where it is important, and not at all important in those areas where it is not important.

So I believe striving to be Rich, striving for financial independence is worthwhile, but it’s a marathon rather than a sprint.

Yet it’s a race worth running because it will allow you to live your life by design.

You will be more in control of your life.

But think about it…how much money is enough?

How will you know when you have enough?

Will you ever know when enough is enough?

About Michael Yardney Michael is a director of Metropole Property Strategists who help their clients grow, protect and pass on their wealth through independent, unbiased property advice and advocacy. He's once again been voted Australia's leading property investment adviser and one of Australia's 50 most influential Thought Leaders. His opinions are regularly featured in the media.
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