“He freely gave to charity … he had the common touch.” — “Richard Cory,” as recorded by Simon and Garfunkel
Does having a lot of money actually make us happier? All our lives we struggle for financial security, then once that’s achieved, we’re unsure if our wealth leads to emotional satisfaction.
A well-known study performed at Cal Berkeley is often referenced by those who believe that money makes us less happy. In a fixed game of Monopoly, one player was given more properties and more cash than his opponent. The “rich” player became more aggressive in procuring more game wealth, exhibited a domineering attitude toward his competitor, and even consumed more than his share of the provided snacks.
Others contend that money makes us more generous and more content.
In 2010, Warren Buffett and Bill Gates founded The Giving Pledge, which encourages the very wealthy to donate to charitable causes. Gates, worth about $88 billion, and Buffett, worth around $75 billion, have committed to giving away half of their wealth to philanthropic goals. Fourteen other billionaires have agreed to do the same. The entire group (139 billionaires), which includes folks like Mark Zuckerberg, Elon Musk, and Sara Blakely, has pledged over $365 billion.
When applied to philanthropic pursuits, that kind of money can do a lot of good. Skeptics say, “Well, what’s giving away $40 billion when you still have $40 billion leftover? “To which one could reasonably respond, “Forty billion dollars out of $80 billion represents 50 percent of someone’s net worth. How many people give away 50 percent of their assets, or anywhere near that figure?” Plus, as my dad used to say, it’s always easy to spend other people’s money. I admire the generosity and spirit behind The Giving Pledge, and think it says a lot about good-heartedness and gratitude among that group.
So does wealth make us more like the pushy Monopoly player, or more like those charitable billionaires who joined The Giving Pledge? My own inclination is that it is neither. I think wealth tends to bring out whatever characteristics were there before. If we were inclined toward frivolous spending and personal greed, those traits become magnified when we have the money to indulge our preferences. Similarly, if we were essentially generous of spirit, grateful for our good tidings and acted judiciously with our money before becoming wealthy, those habits likely exhibit themselves again after we become wealthy. But academicians who study such matters offer varying opinions.
Studies do, however, repeatedly indicate that wealthy folks are more emotionally content when they remain connected to family, friends, neighbors and social activities. And regardless of net worth, building a wall around our houses and our lives can lead to isolation and an unhealthy focus on our own personal issues.
Margaret R. McDowell, ChFC, AIF, author of the syndicated economic column "Arbor Outlook," is the founder of Arbor Wealth Management, LLC, (850-608-6121 — www.arborwealth.net), a “fee-only” registered investment advisory firm located near Sandestin.