Saturday, October 9, 2010

spending = happiness

I watched an interesting documentary about the science of happiness. Of particular interest was the correlation of the degree of happiness a person gets relative to the money he/she spends. Researchers noted that money spent on experiences like going out with family and friends, or traveling to a new place or trying out something new like scuba diving contributes to a much greater and longer lasting sense of happiness and satisfaction compared to money spent on things like clothes or furniture or cars. The researchers also noted that at a certain point, the degree of happiness one gets from acquiring something levels off. Let's say we rate happiness from 0 to 100 and you currently don't have a car. When you buy a used car, you are happiness rate jumps from 0 to 75. Let's say you then buy a brand new car, it jumps to 85 and when you buy a mercedes it jumps to 90. Therefore you keep on spending more money for little increases in the happiness rate compared to the small amount spent for a huge jump in happiness when you bought the used car. I guess this is why some people buy $20,000 bags when you can have a good leather bag for $500 or less. This research put things in perspective. If you know that spending 1000 today for an item that will make you happy for let's say 2 months or so, wouldn't it be better if you invest that 1000 and make it grow?

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