you've all heard the phrase money won't buy happiness and it turns out it's true research by psychologist and sociologist and economist shows that while the absence of money poverty makes people miserable once their basic needs are met additional money does not translate into higher levels of satisfaction now at this point many of you are thinking put me in that study i mean you're thinking you flood my life with cash i'll get back to you on whether i'm happy or not well strangely that study's been done a few times there's a number of researchers who've looked
at lottery winners and what they find is immediately after somebody wins the lottery they're happy they're ecstatic one year later they're only slightly happier than the average person okay the question i've been asking over the last 20 or so years is why it sure feels like money should make us happy why doesn't it okay and i think there's a variety of reasons but one of the key reasons has to do with expectations our satisfaction depends on expectations basically for any kind of material possession or income or status when we have more than we expected we're
happy when we have less than we expected we're unhappy when we get what we expect we're just kind of comfortable now that's not the reason money won't buy happiness the reason money won't buy happiness is our expectations escalate and once they do they don't easily de-escalate some people call that a ratchet effect you know what a ratchet wrench is it's one of those wrenches you put on top of the bolt and it clicks one way and you pull against it the other there's a ratchet in our expectations uh let me give you some examples i
think it's best to illustrate it i think about that first car you were ever able to drive for me it was a 1962 volkswagen beetle and all that car had to do was get me away from my parents house and i was happy with it and i polished the rust on it and it and it was great until i rode in my friend johnny meyer he had a 1968 volkswagen beetle and his car started on a regular basis and it had heat and as soon as i got in johnny's car i'm like you know what
my 62 volkswagen's not maybe the greatest thing ever maybe i need a little nicer car and then of course i had chance to ride with other friends and you know the pinnacle from a high school kid in the 70s was another friend who had a trans am you know like the that big bird on the front and if you ride in a trans am there's no going back to a volkswagen and that's the problem of escalating expectations now maybe cars aren't your thing let me show you another example a few years ago uh we went
up to i took a group of students and we went up to lake minnetonka now lake minnetonka is this gorgeous lake west of the twin cities and it's home to rich people and celebrities and record producers and regular folks it's a great place and uh that we all went up there we rented a boat we drove down the way a little bit we saw this first place and i thought wow wouldn't it be great if i could have a cabin on lake minnetonka i'd come up here any weekend i want and i and i got
to have a a dock i got to have the and there's i think if you look closely there might even be a there's a grill there that's all i need if you give me this cabin the stock this grill i will be perfectly happy i will not need more okay well we float a little further and i'm like oh wait i think i would rather have a house with you know a roof that's been redone so i don't have to fool around with that and look it's got windows that are solid and oh it's got
a chris craft an old antique inboard and if you're going to be on schmancy lake minnetonka that would be a very cool boat to have and it's got adirondack chairs i need those and then i'm thinking well that first place i looked at wasn't so great this is what i need until i see this and my thought is all right a brand new place not very big made of bricks and then a great big dock so i could have a boat a giant cabin cruiser so that i could spend you know the evenings in the
in the little cabin and the great big cabin cruiser and in the dock this would just be great this is exactly what i need okay this is what it would take to make me happy well here comes the next one wait a minute i don't need just a cabinet i need to move up here i need this big house i need uh you know i want to you know be honest to the log cabin lodge feel with this uh and that's what i need and it's got both the uh the outboard the chris craft and
i'm gonna need a fishing boat and it's got a striped yard and i really would like that striped yard okay and i'm happy with that i said wow imagine the fun i would have the people who would come to visit who would hang out here we would have a great time this is what it would take to make me happy well you can probably guess what's coming next it's this house here's a a brand new house made to look old and it is awesome now i got to be honest with you you know where this
is go when these houses are getting bigger and they're getting so big now that it's hard to get them in the full frame right so just find a door and that's about the height of a person and this place is magnificent it's got its own swimming area and it's got all the boats it's got the cruiser it's got the ranger the bass boat it's got jet ski a little fleet of jet skis and if you look closely i think there is like a guest house in the back of it and uh i thought as well
that'd be great i could have people come visit my closest dearest friends and then not have to stay in the same house as them that's what i want this is what would make me happy until i see this house and i'm like okay i don't need anything that looks old i want something that's new and pretentious okay and i'm gonna tell you it's pretentious because get this it's been torn down so that somebody could build a bigger place okay uh but it's wonderful look at it it's beautiful house it's in the better part of the
lake because apparently it's not just living on lake minnetonka it's the best neighborhood on lake minnetonka it's the cleaner water the deeper water there's all this other stuff that factors into it and i think okay whoever lives there must be ecstatic they must love their life how happy they must be and then i see this now i can't get it all in the frame it is enormous it's three full floors if you look closely you can see one of those umbrellas that they put out over a picnic table imagine a person could fit under there
and there it is it's magnificent it's got seven smoke stacks and it's got certainly guests i'll bet it's called a compound and i want a compound now think about this early in the morning of that day i just wanted a little cabin a place i could go hang out but by later in the day i needed the biggest house on lake minnetonka i don't know 15 000 square feet there's i think my wife and i could live in fifth we could be in separate counties right they people call each other in this house now did
your taste escalate here's the test remember this little place right here it would have been the dream cabin with just a big boat in the and that house well i've been a little bit deceptive it's actually the boat house for the mansion that's where they store inner tubes that's the inner tube house right now you can have your taste escalate for cars and and for mansions right uh and i got to thinking about this i thought i wonder if there's is there any product that's not aspirational that that you think if i just have this
next thing then i'll be really really happy so what i did is uh yesterday morning i just turned on television and googled a couple things on the youtube channel there and i said all right let's just i'm going to search under the terms finest or nicest or best and here's what came up okay uh just just from just yesterday cars tons of cars lots and lots of cars not just the finest cars the finest rolls royces so think about that you get enough money to buy a rolls royce and suddenly there's a youtube video that
says you don't have the best rolls royce you need an even better one of course there was an unlimited number of houses like this and if you think about it there is a network channel that's dedicated to making you unhappy with the current house you live in i mean isn't that what happens on house and garden tv it just keeps getting nicer nice and you think oh gosh my ceilings have that popcorn stuff on them and apparently they hate popcorn ceilings and then within the house everything is escalating then you can start with a little
refrigerator then you get the sub-zero refrigerant you get the walk-in refrigerator you get uh better stoves and better ovens even towel bars you can get heated towel bars and i made fun of that but i bet it's great and and i bet it's hard to go back to just good old room temperature towels once you've had that there's no end to the handbags the shoes the designer stuff the makeup stuff um and i mean no end what's i don't know what does nail polish cost anybody what's a little bottle of nail polish cost pardon eight
dollars okay eight dollars you know how much you can spend on nail polish if you want to i'll tell you 267 580 apparently it's got little diamonds in it that i guess at the end of the day you just throw them away because you're that rich i even asked the question all right i get it for commercial products what about like commodities like the two most common things in the world are water and salt right salt salt of the earth it's absolutely everywhere i thought these have got to be the things there's no aspirational water
is there uh yeah yes there is you can spend uh one thousand one hundred dollars on a single bottle of water drinking water okay nothing else special other than you know crystal decander but it's a thousand dollars for water okay you've got a lot of money if you're spending a thousand dollars for water how about salt uh salt if you get the fancy morton salt it's three cents uh an ounce okay but apparently you can buy a special salt that costs thirty six dollars an ounce okay now unless that's made of salt extracted from the
tears of elvis i can't imagine why it would cost so much okay so the message here is there's no end to the escalation of our tastes if we're trying to find long-term life satisfaction from material things from status all right so you might ask yourself is that discouraging and the answer is well it kind of depends i think the message is both discouraging and freeing depending on how you think about it so you really got a couple options option number one stay on the treadmill try to find happiness by buying the next new thing getting
a job where you make more money only to buy a more expensive version of the thing only to find a bigger fancier job and it just never ends okay you could stay on the treadmill but the danger is you start leading a lifestyle in service of this material stuff you take a job you don't like because it pays a lot you give up your hobbies because you got to go make a bunch of money to live with fancier things you give up your friends you stay away from your family so there's a real danger to
running on the treadmill daniel kahneman the psychologist and a nobel laureate calls it the satisfaction treadmill because you never get to the end to the end of it all right second uh the other alternative is is to realize that there's only so much you can get from money and material possessions you know and think of it this way money can make you miserable but there's no amount of money that'll make you happy so maybe the goal is to just be comfortable to seek security not ecstasy so what's that mean it means if you're living a
pretty good life and you're pretty comfortable maybe you try to put a lid on your expectations realize that you've got it good don't try to find too much don't sacrifice your the job you love and the friends you have just so you can have more money so you can have nicer things live within your means save money and invest money so you can weather uh the financial storms that might hit your life and uh be comfortable with it okay so uh to summarize here we go there's no amount of money that will make you happy
there's no amount of status that'll make you happy there's no there's no jewelry where you'll finally get the right piece of jewelry and go that's it i have achieved nirvana it isn't going to happen you won't find long-term happiness and the accumulation of material possessions what you can find with money is security you should look for the opportunity to not worry about money so save enough that you can weather the storms stay within your means and you'll be happier well you'll certainly be more comfortable thank you
