Money can buy you happiness but it depends on how you use it.
It begins down there at the base of the pyramid of Maslow’s hierarchy of needs.
Physiological needs
If you have enough money to cover a lifetime’s worth of clean water, healthy food, warm dry shelter, enough clothing (and you appreciate these things) then you’ve got the base of your happiness sorted.
Time in nature and sunlight should also be included in the list of physiological needs.
The idea of the hierarchy is that a person must feel each need is met before being motivated to seek needs on the level above.
Once you have these critical physiological needs covered you can start to move up the hierarchy and increase your happiness.
Each of the other needs requires the spending of time more than the spending of money:
Safety and Security
The feelings of safety and security are massively improved by not spending your money and instead putting it to work to make sure you’ve got those basic physiological needs covered.
You need time (but you don’t need money) to maintain your health when the world is your gym.
Staying healthy and exercising will help you sleep better (another of the key physiological needs).
As will removing some of the self-imposed worries that come from buying things using debt or trying to maintain a high-spending lifestyle on a single stream of income.
Taking on debt to buy things you don’t need can have a big negative effect on your feelings of safety and security.
As you start to increase your savings rate the money can be used to get a deposit together or overpay your mortgage.
Eventually you become mortgage free, removing forever one of the biggest expenses most people have.
Reducing your mortgage and eventually becoming mortgage free satisfies the human need for security.
Love and Belonging
Love and belonging are where you really need time. Time to be together. Time for your family and friends. To have fun, to talk, to play, to read, to travel, to add to the emotional bank account you have with each other.
These days the constant chase for more can have a massive detrimental effect on the amount of time you have spare to spend with those you love.
Buy yourself more time by keeping your money and putting it to work for you.
Self-esteem
Self-esteem is boosted by taking control of your life. By having the strength of character to no longer follow the crowd. You will earn the respect of others by living a life that is true to your values.
I promise you the moment you realise you don’t need to buy things to attempt to signal worth you will feel stronger and more confident than ever before.
I feel a far bigger sense of achievement from taking a good photo, sketching a good likeness, or climbing a challenging mountain than I ever have from something I’ve bought.
Self-actualization
Finally we get to the pinnacle of the pyramid. Self-actualization comes when you maximize your potential. When you do the best you’re capable of doing.
The FI path is the path up this pyramid. As you stop trying to consume your way to happiness you find creativity starts to flourish instead.
Creativity is right at the top of the pyramid and as such has a massive positive impact on your happiness.
But it’s sometimes hard to be truly creative when you’re working for someone else.
Buy yourself the time and the freedom to give to the world and find purpose in the work that you do.
Give yourself the time to continue learning and growing.
Some of the traits of self-actualized people (as described by Maslow) begin to shine through as soon as you step onto the path towards FI.
Maslow states that self-actualized people:
- Are no longer motivated by the satisfaction of basic needs but instead by growth and learning
- Enjoy the journey and not just the destination
- Share deep relationships with a few and feel affection towards all
- Have a purpose – a desire to improve the world
- Are not troubled by the small things
- Are humble – aware of how little they know compared to what could be known or is known by others
- Interested in understanding the world and happy to seek out the unknown
- Make up their own minds and make their own decisions
- Take pleasure and are grateful for the simplest things
- Take continual pleasure in the wonder of the world (the beauty of a sunrise or the feel of a cool breeze)
Buy yourself the freedom to live a fulfilled life
So there you have it. Make sure you have enough money to cover healthy food, water, and shelter. Do that as efficiently as possible. Then keep as much of your money as you can and put it to work for you.
Money can buy you happiness if you keep it, put it to work, and buy yourself more time.
Buy yourself the freedom and the time to reach the pinnacle of the hierarchy of needs with a joyful and fulfilled life.