We’ve all heard people say it (which is why we consider it a cliché), but the question we ask today is, is it true?

I was at a gathering recently and was told in no uncertain terms that “money can’t buy happiness.” The individual who spoke was loud, disrespectful, and offensive (perhaps you know him or someone like him). Rather than pelt him with statistics, I went with a different tact — I asked him, “What can?” If money can’t buy happiness, what can? His answer was a blubbering, blustering response.

I decided to do two pieces of unscientific analysis on the subject. I spoke to about a dozen people and asked them their perspectives. It seems that most point to either extreme to justify this position. “Everyone knows that it’s true because lottery winners are usually broke…” was one extreme. The other was, “I don’t have any money and I’m happy…” I think when you look at both extremes— the really poor or really rich, you, by definition, miss the majority.

The middle-of-the-road position was that a little more money would be nice! Those that struggle monthly to make ends meet have learned to live with a great deal of stress. Making car versus rent decisions or debating which bill you can pay and which will have to wait (again) cannot be a happy place to live your life.

The other analysis was more personal in nature. I looked back 10, 20, 30 years ago and looked at my life financially. Thirty years ago, we were just starting out, had nothing, and started by saving some money for an emergency. I remember being a bit stressed because there was little to no safety net. There were no funds for a getaway. I would say that I was happy but stressed.

We started a family and the corresponding planning for college. Again, looking back we were doing okay and we had a little set aside (nothing in comparison to the college funds needed). I would say the “happiness quotient” was about the same. The financial stress was still there; it went from worrying about $100 decisions to $1,000 ones. When the boys went to college we worried about $10,000 ones.

Now, we have some money and a great plan. We don’t fret about $1,000 or even $10,000 decisions (we are on to $100,000 ones). My conclusion is that money really can’t buy happiness. Being happy is a decision, but having money can and does reduce stress. Maybe we should change the cliché to: “money can reduce your stress, but happiness is up to you.”

Gainplan LLC is a Registered Investment Adviser. This blog is solely for informational purposes and not a solicitation to invest. Advisory services are only offered to clients or prospective clients where Gainplan LLC and its representatives are properly licensed or exempt from licensure. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. No advice may be rendered by Gainplan LLC unless a client service agreement is in place. Please contact a financial advisory professional before making any investment.