How to buy happiness

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While I was driving home from my appointment I couldn’t help but feel nervous that I would forget to do something: peel the price tag off a thing I just bought in case somebody saw how much it cost.

I pulled onto a sidestreet and grabbed the plastic bag from the back seat. In it was a puck-sized container of a high-end hair paste. I scratched the little white sticker off. It was $35.00, and now only I knew.

Some paranoid financial conditioning somewhere in my head had me thinking it had been an extravagant purchase. But I thought about it for a minute and realized that no, for what it does for me, it’s some of the best value I’ll ever get for thirty-five bucks.

I’m 31 years old and it wasn’t until I started going to a well-reputed salon and buying 35-dollar hair paste that I finally began to really like my hair. This was a year ago. My mop had always been a point of self-consciousness for me. I liked myself, but never got along with my hair. It had evolved over the years, from crunchy gel spikes to a #2 buzz cut to a polite crop, but it was always a liability. I felt faintly uneasy about it, all the time. That problem spread itself across many thousands of days of my life, taking a little (sometimes a lot) of enjoyability from each of them.

Thinking back, I can’t even guess how many completely useless 35-dollar purchases I’ve made in my life — shirts I never wore, books I never read, drinks I didn’t need to drink, restaurant meals I could have made myself. When I consider what it really does for me, this hair paste is an astoundingly good investment. 

One container lasts about six months, and every day of those six months I feel good leaving the house, when it used to be normal to feel self conscious. That alone — the sensation of liking the way my head looks — is worth vastly more than the 15 cents a day it costs me. And that’s to say nothing of the endless secondary effects of that very inexpensive confidence: smoother socialization, better posture, more attention from women, a more easygoing mood, and all the tertiary effects that arise from those improvements, and so on.

Considering the real-world value it delivers to my life, this stupidly expensive hair paste is one of the most worthwhile purchases I’ve ever made.

All purchases are investments

This is a pile of most of the receipts from the last three months of 2011. It represents thousands of dollars of retail purchases. Each slip is a date-stamped record of how much money I decided to part with there and then, and what products and services I got in return. Thirty dollars here, fifty dollars there — and there are fistfuls.

I can look at most and quickly identify the things that are no longer contributing any value to my life: magazines I bought at the airport because they were slightly more appealing in the moment than reading the book I already had with me, desserts I bought with my groceries because I went shopping while hungry, unhealthy lunches I bought because I’d rather sleep twenty more minutes than make something to take to work, and dozens and dozens of elaborate espresso beverages that gave me nothing more than a ten-minute dopamine hit for five dollars a pop.

Each line item on those slips represent an investment. For each, I parted with money in the hopes that what I got in return would add something to my life, in the form of nourishment, ability, pleasure, or any other quality that improves my days. Some were good, lots were bad.

When it comes to our money, we tend to differentiate between consumer purchases, and investments as if they’re functionally different. But they work the same. As long as there has been wealth, people have tried to grow wealth by investing. We put value into something with the idea that it will return greater value to us over time.

When we’re talking about normal capital investments, getting a 10% return on investment is traditionally the “fantastic” benchmark. Putting 100 units of value into someting, and getting 110 back over a year is definitely a success.

That’s not the area where we have the most leverage over our finances though. When it comes to our consumer purchases we can do way better than getting an extra 10% worth of value out of our money.

All you can buy is quality of life

Making more cash with your cash is the idea of financial investments, but we’re talking gains of a few percent over what you already had.

By comparison, when it comes to consumer purchasing, the value of what you do trade a dollar for can vary tremendously. Fifty per cent. Two hundred per cent. Five thousand per cent. Between the different ways you can spend twenty bucks, there is a comparitavely astronomical range of possible return on investment.

And that’s because the value those purchases return isn’t monetary value, it’s experiences.

I have a twenty dollar bill. I can spend it on a few lattés, which adds to my life a only a few minutes of actual sipping pleasure, and maybe an hour of the mild feeling of security that comes with having another sip waiting for me in my hand.

That twenty dollars, spent that way, returns little else in terms of real value and also comes with some liabilities in the form of empty calories and coffee breath. The net value is less than zero. I have nothing to show for it an hour later except the needless calories in my body. Terrible investment.

I could have spent that same twenty dollars on two yoga classes, and gotten real, lasting value out of it — the type of value that builds more value indefinitely.

Just the classes themselves are reliable oases of calmness, and come with a rare sense of assuredness that I’m not wasting my time or being indulgent. But the bulk of the value comes in dividends in the days between and after the classes. I walk around with better posture. I’m slightly fitter and more inclined to do more exercise. Fewer moments that week are spent lost in thought. I get that mild post-exertion muscle soreness that I like so much. I get a persistent feeling of optimism that can be felt in many of the hours between and around the classes. Good investment!

We just have to remember that it’s not the money that has value. Money has no value except what you can trade it for. Most of the time we’re trading our money for things — objects such as cars, shoes and microwaves. Most of the rest of it is exchanged for services — bus rides, massages, carpet cleaning. But we purchase those goods and services only for the experiences they can lend us — or spare us.

Value amounts to positive experiences. Wealth is ultimately the capacity to create worthwhile experiences in life, and to prevent bad experiences. There’s nothing of value except experiences, and assets that can continue to supply good experiences. That’s all money is good for.

If you can stay conscious of what the real-life value of your purchase really is, in terms of the experience it offers, then you can find enormous leverage in what investments you make. That’s where we can really profit, if we recognize that wealth is not actually money, it’s capacity for quality of life.

What really pays off depends on the person, but you can get a huge amount of mileage out of simply stopping to look at what form of value you’re actually getting. All of it is going to amount to feelings anyway, but what feelings, and how long do they last, and are they going to create conditions that help to make more in the future?

There’s way more to be gained by finding leverage in the kinds of experiences you spend your money on than there is in trying to increase your income, or trying to maximize your financial return on investment.

You can shop around all day trying to make 3 per cent on your savings instead of 2.75, and then go eat a forgettable meal at Applebee’s just because it’s Friday, and obliterate a year’s worth of gains.

It’s the same mentality shared by the people who drive across town to the gas station that’s selling fuel a few cents cheaper. They don’t know where the value lies. They react to numbers.

Lessons from chocolate

For most of us middle-classers, or greatest financial leverage is not in what mutual funds we buy, but in how we gauge the real-life value of our consumer purchases. You can multiply what you get out of your discretionary income by asking: what form does this value come in, in terms of experiences? How long does it last? Will it leave me with some kind of value-producing asset, such as a skill or a tool?

The cost of something is not limited to the amount of money you forfeit for it. Purchases often come with negative total value. Yesterday while at the grocery store I had a lapse, and threw a large bar of dark chocolate into my basket.

I am eating it as I write this, and I’m excited for it to be gone so I don’t have to look at it any more. It’s really not that great. I don’t feel good right now.

The best part was the first two bites, which in terms of actual value only yields about fifteeen seconds of pretty modest pleasure. But it’s here, and I don’t really feel like putting it back in the fridge.

The moment when I was in the chocolate aisle deciding which flavor to grab — that was a moment where I weilded a great amount of leverage, if only over a small amount of money. All I need to make far better investments in future scenarios like it is to stay rational when I feel urges to buy chocolate. I need to realistically assess the value of what experiences I’m actually buying.

I won’t argue with what chocolate adds to your life — some people swear some of their finest moments come while experiencing chocolate, but I know for me it’s a really terrible investment.

The net value is less than zero. I’m a little bit fatter, all its positive value is gone and I’m left with the liabilities. I would have gotten more net value out of throwing a two-dollar coin in the river than I did by eating a giant mid-quality chocolate bar by myself.

Don’t wait until you’re in front of the chocolate to make these assesments. Look through some receipts. What was the real-life value there? What form is it in? What remains of it? Would you rather give that value back, and have the cash in hand again? What liabilities does it come with?

You might think you already do this kind of evaluation, but it’s unlikely. We buy things for all kinds of reasons, and it’s usually quite unconscious. You put something on the grocery list because you’re used to having it and you’re out of it. Then you buy it because it’s on the list. The cycle renews itself without your ever considering what you’re actually adding to your life for that money.

Right beside my laptop, there are several fistfuls of receipts. A single wad of those receipts, which we tend to think of as near-garbage, probably represents the expenditure of a similarly-sized wad of cash, in twenties and fifties.

All that money is gone, and I hope my life still contains something to show for it. But most of it is probably gone without a trace. That’s good news though, because I know the next wad will leave a lot more behind — if I remember that all we can ever really buy is quality of life.

***

Photo by Nomadic Lass

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{ 42 Comments }

Olivia March 26, 2012 at 1:02 pm

Thank you for putting into words what i’ve never really been able to. I’ve never quite been able to describe or explain how money can buy quality of life without coming across as some form of elitist. Great post!

EcoCatLady March 26, 2012 at 1:03 pm

Great post! Have you ever read the book “Your Money or Your Life?” One of the things they suggest is to calculate your real hourly wage… in other words, include ALL the hours that work demands from you including commuting, time spent worrying about work, working from home, checking work emails while you’re not on the clock, fighting with your significant other because you’re stressed about work etc. Then you subtract ALL of your work expenses including cost of commuting, work clothes, etc.

Anyhow, once you figure your real hourly wage, you keep track of everything you spent money on and do a calculation to figure out how many hours of your life xyz expense really cost you, and how much enjoyment you got out of the expenditure. Then you ask yourself if it was worth it or not.

I did the program back in the mid-1990′s and it was a real eye opener. Helped me make some huge life changes and now I don’t have to work for a living… and I’m a much happier human.

It’s totally true… everything you spend your money on is an investment… and we’d all be so much better off if we treated it that way.

David March 26, 2012 at 6:35 pm

I haven’t read it but I’ve heard it recommended many times. On the list.

nrhatch March 27, 2012 at 7:44 pm

Definitely worth a read, David. I read Your Money Or Your Life 20 years ago and have far fewer receipts clogging up the works as a result.

I tend to buy what I need and need what I buy ~ and we’ve downsized our house from 4500 sq ft to about 1200 sq ft so we have more time to LIVE.

But I am NOT giving up chocolate . . . EVER! :D

ShirlleyFai March 26, 2012 at 6:31 pm

“all we can ever really buy is quality of life”, well I really agree with this and I really am inspired in reading your post here…

The Fuddler March 26, 2012 at 7:39 pm

Hair paste, of all things. I guess this is a classic example of how making a small adjustment in one’s life making a huge difference!

As per usual you’ve hit the issue dead-center. I’m no millionaire by any means, but from now on I’m going to think twice before saying that something which might make a genuine improvement in my life costs too much. As long as it won’t interfere with necessary expenses or bankrupt me, it stays “on the table”. Likewise, I’m thinking twice before buying certain things which not only don’t give very much real return but can actually cause harm, if only a little of it.

David March 27, 2012 at 9:40 am

As long as it won’t interfere with necessary expenses or bankrupt me, it stays “on the table”. Likewise, I’m thinking twice before buying certain things which not only don’t give very much real return but can actually cause harm, if only a little of it.

That’s the whole idea right there. I’ve found a lot of purchases, when evaluated in terms of what they add/subtract from overall quality of life, would be a bad purchase even if they were free. Junk food is a great example. All it leaves you with are calories, and giving into the urge withers the feeling off self-control just a little bit.

Noch Noch | be me. be natural. March 26, 2012 at 9:27 pm

ah! i like this concept. i’m buying a quality of life. not things
i need to remember it when i go shopping next :)
NOch Noch

Nitya March 27, 2012 at 5:12 am

Good coffee features highly in my pleasure stakes. It’s not just the coffee, it’s also the way it’s served , the ambience of the café & the inclusion of a proper cup and an actual spoon. In other words, the whole coffee experience is what adds value to my life, not simply consuming a beverage.
Obviously we differ in this regard but that’s what makes people & life so interesting.

Kelsen March 27, 2012 at 9:07 am

I agree with you here. Thanks to David’s way of looking at things, though, it makes it seem more like an investment too! $5 not just for a drink, but for a couple hours of relaxing reading in the ambiance of my neighbourhood cafe. Some people might end up spending a lot more to buy a bigger home so they can set up a room just for relaxing and reading, but for me and my tiny apartment, I’d much rather be at the cafe where there are other people around too. :) I’m sure for some people that just grab a latte on the run, it might be different though.

David March 27, 2012 at 9:42 am

Actually I am the same. The ritual of going out for a good latte, served in a real cup, on a sidewalk cafe, really is a great pleasure for me and is almost always worthwhile. The hundreds I spent last year that I’m lamenting were starbucks drive-thru coffees I chugged from a paper cup while driving.

Jill March 27, 2012 at 6:32 am

Again a wonderfully timely post for me, thanks David

GoodGravyBoat March 27, 2012 at 8:01 am

I like being reminded that money is simply a tool, and when used well it can buy me little bits of happy. Maybe I’ll stop feeling bad about wanting to go back to the ‘over priced’ salon for an ‘over priced’ haircut. I get two haircuts, maybe three, a year…and I loved my hair when I left the place…and I spend so little money on those kind of ‘indulgences’. Thanks for the perspective and may your hair paste always be waiting for you!

michelle March 27, 2012 at 9:18 am

Wonderful post- thank you for sharing!

michael March 27, 2012 at 9:26 am

David,

I’ve been following your posts for a few months now. You’ve got some good stuff. Thanks.

Michael

Dave March 27, 2012 at 9:32 am

Don’t put chocolate in the fridge! Buy a high-quality dark bar of eating chocolate (Valrhona is a good example) and savor a square every now and then. Best chocolate-related investment possible.

David March 27, 2012 at 9:45 am

Thanks for the chocolate advice Dave, I am becoming more chocolate-literate and will make better chocolate-related investments in the future.

Terri Lynn March 27, 2012 at 10:22 am

Exact same principles could be applied to time. Someone called me yesterday wanting to bring me a free package and talk about their services. When I told them no, she kept stressing that it is free. I kindly told her how valueable my time is and so it wasn’t actually free. Then I came home and saw your article. :)

David March 28, 2012 at 7:49 pm

I am so much worse with time than money, but maybe it’s because I didn’t quite think of it like this… thanks Terri.

Benedict March 27, 2012 at 11:54 am

Thanks for the article David! This came into my inbox the same time as Seth Godin’s latest blog post: http://sethgodin.typepad.com/seths_blog/2012/03/making-big-decisions-about-money.html

Consequently, the past half hour has accorded me a brand new outlook on money.

Amy March 27, 2012 at 6:23 pm

Awesome post David.

And thanks for linking to Seth’s blog! Will be following him intently!

David March 28, 2012 at 7:52 pm

Everyone should read that Seth Godin article. His final line is the perfect way of putting it. Thanks for sharing Benedict.

Kyla March 27, 2012 at 8:48 pm

Great article David, Thanks for the brilliant ideas you’ve shared.

Kathleen March 27, 2012 at 8:56 pm

Your writing is brilliant. And this post, too, makes a lot of sense. But I’d like to point out that when you only have enough money to cover your basic needs, it feels like agony to contemplate spending on something for luxury (the chocolate bar) when you’ve budgeted those dollars for groceries. Or rent. Or gas. Sometimes it’s not about the chocolate bar… it’s about having the ability to make that choice. Take it from someone who doesn’t make very much and is scrambling to make ends meet… some days, I just want the luxury of being able to choose the chocolate bar without worrying what it will cost me.

David March 28, 2012 at 7:58 pm

>Sometimes it’s not about the chocolate bar… it’s about having the ability to make that choice.

Yes for sure. The expression of freedom is a feeling too… much more delicious than chocolate, and so it can be worthwhile to indulge in. So can an indulgence small-scale recklessness — buying something without quite knowing what you’ll have to sacrifice later. That feeling is of value to some people too. It’s all the same game, no matter the scale.

Steph in Berkeley March 27, 2012 at 11:45 pm

i can’t help but hope that one day, and sooner than later, the hair paste and even the swanky salon are no longer needed to add quality. such things can be found for less. but that’s just the minimalist in me.

i really like the last line, though: “That’s good news though, because I know the next wad will leave a lot more behind — if I remember that all we can ever really buy is quality of life.”

Cley March 28, 2012 at 1:02 am

for me you can buy happiness.
thanks that you shared this.

Rossalie March 28, 2012 at 2:40 am

We can buy things that can make us happy and I can still say that money can buy happiness but not all the time…

Weez March 28, 2012 at 3:28 am

And I just bought 4 of the most delicious chocolate bars ever, today @ work to support a school fund. I may not gain anything by it, but the student will get to profite from a social event he will no doubt, gain experience from and hopefully great memories. So true though, quality for your money and what you have once you ‘have no money’, Makes you take a look around the room and see just how much one can waste on wants…and not needs!!! Hmmm…?

Ektor March 28, 2012 at 4:03 am

“I get that mild post-exertion muscle soreness that I like so much.”

Hahahahahah that’s so funny david!!! Totally true!!!!!!!

Lois March 28, 2012 at 12:26 pm

In my own perception, happiness is a precious things were can’t pay of any amount… How I wish I could buy happiness in every single minute… :)

Adriana Higuera March 28, 2012 at 6:38 pm

Muchas gracias. Como siempre es un placer leerte.

Cara March 28, 2012 at 7:31 pm

Thank you for taking what’s been rattling around in my head for the last four years and putting it down so eloquently in black and white. I feel lighter. Walking away from the corporate world and a big salary and having to scramble and get streetsmart as I launched my new business taught me how to revalue money; to look at its worth differently. It makes me ill when I think about how much I used to blow on absolutely nothing of worth. Now every dollar means something, and I am hyper-aware of what I trade each one for. Yet I agree with Kathleen, too – sometimes it’s nice to just buy the friggin’ chocolate and not think about anything else but the moment of sheer enjoyment. :)

Alex March 28, 2012 at 7:39 pm

I hate that guy in our brain, or should I say woman. That thing that makes us remove the price tag of of everything that might look like extra “stuff”. Who cares if you bought something expensive it’s an investment, and it’s mine.

I will always think about buying junk food from now on. I caught myself buying a KitKat for the 5th time that week and I stopped myself right there and I said I don’t really need this. Eating out of boredom is a big problem.

Good Post.

Lucie March 29, 2012 at 5:35 am

Some people spend $35 on drinks on a night out – and this lasts longer.
It’s all relative really, your money spend it how it makes you happy :)

Shalani March 29, 2012 at 11:15 pm

All we know that happiness was priceless.But sometimes I think that I will buy happiness to make me happy all the time.

Anne March 30, 2012 at 3:10 am

So you’re finally caving in to product placement on your blog ? ;)

Liz March 31, 2012 at 1:19 am

That’s good news though, because I know the next wad will leave a lot more behind — if I remember that all we can ever really buy is quality of life. Happiness is priceless.

D. April 1, 2012 at 4:49 am

On the flip-side, rationalization and/or justification of the need for needless things we think we need, can become the gateway drug “Retail Therapy” and can lead to the dark-side: “Junkie Consumerism”. I try to remind myself that “Less Is A Possibility”.

Great writing, you have eloquently woven together a tornado of concepts, ideas and visions that bounce around inside my head. It is good to know that I am not alone and lost within my perception/perspective of this crazy place we call home. Thanks, D.

DivinneGrace April 1, 2012 at 7:31 pm

We all know, we can’t buy happiness but we can always buy the things that can make us happy…

kitschculture April 2, 2012 at 3:27 am

I don’t disagree with you, I think you make great points – but this is basically an outline of Utilitarianist philosophy.

I mean, people should definitely think about what gives them utility and what doesn’t. It’s a great way to think of what money is worth to you, but it doesn’t stop there. Ultimately, it extends to your use of time and all of the implications of that: work, activities, people in your life, etc.

Another aspect of Utilitarianism that I think might be worth thinking about is the utility you get from something as compared to the utility someone else gets from it. In the end, it’s a disproven philosophy in terms of it being a guiding principle to life but it has a lot of valuable lessons that give new context to life and whether you’re making the correct decisions. I’m glad you’re bringing the issue to light.

Debbi April 13, 2012 at 7:59 pm

When I think of my starbucks experience I think of it as an investment in the jobs of the people there who serve me. I make it a point to go inside and uplift those I come in contact with. I get a Vente decaf coffee for $2.39 cents and it’s a small investment for a few happy moments that are worth it to me. As for the starbucks receipt with the chocolate cake…hmmm…must have had an unconscious moment!

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