Money and Happiness: Understanding the True Connection

In this video, the speaker discusses the relationship between money and happiness. They share that while money can provide security and certain experiences, it doesn’t directly correlate with increased happiness beyond a certain point. The speaker also explores the idea of savoring and how it contributes to happiness, emphasizing prioritizing experiences over possessions. They mention that spending money on others rather than oneself can lead to greater happiness. Ultimately, the speaker suggests that happiness is not derived from external factors like money or choices but from one’s ability to savor and find joy in life’s experiences.

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Key Insights:

  • Eating chocolate without thinking about its price or paying for it brings happiness, while associating it with cost or payment reduces happiness.
  • Research suggests that money can buy happiness up to a certain point, typically between $100k and $150k per year.
  • Monks, who live with minimal possessions and actively disacquire material wealth, are known for their pursuit of happiness and are considered to be among the happiest people.
  • Money provides security, which is correlated with happiness, but thinking about money too much can reduce the ability to savor experiences and decreases happiness.
  • Experiences tend to bring more happiness than material possessions.
  • Savoring ordinary experiences can bring similar levels of happiness compared to extraordinary experiences.
  • Spending money on others generally brings more happiness than spending money on oneself.
  • The choice between different paths, such as majoring in a field or pursuing a passion, does not determine happiness. Instead, it is how one lives and experiences their chosen path that influences happiness.


So, people would give someone a nice expensive chocolate and ask them to eat it. What they found is that if you eat the chocolate and really sit down to enjoy it, it brings you a lot of happiness. However, if you tell people how much the chocolate costs or if they have to pay for it, it reduces their happiness. There is an age-old debate about whether money buys happiness. Research suggests that money does buy happiness up to a certain point (around $100-150k per year), but beyond that, it doesn’t correlate with increased happiness. On the other hand, spiritual traditions like monks and yogis suggest that happiness comes from actively getting rid of material possessions. So, there is a dilemma: should one chase money or pursue a simple and content lifestyle like a monk? The answer lies in understanding the nature of happiness, stress, and the role of money in our lives.

Stress affects both our body and mind by releasing hormones like adrenaline and cortisol. Cortisol increases our sensitivity to stimuli, makes our pain receptors more sensitive, and affects our sleep patterns. Stress also compromises our long-term health for short-term survival. In modern society, stress is a constant presence, leading to sleep issues, worrisome thoughts, and an inability to enjoy the present moment. Happiness research suggests that money provides security and reduces stress. However, happiness is not directly derived from money, but from the experiences and enjoyment that money allows us to have.

Experiences play a crucial role in happiness. Research shows that spending money on experiences brings more happiness than spending it on possessions. The ability to savor experiences is also significant in determining happiness. Savoring refers to enhancing and extending a positive experience. Money spent on others tends to bring more happiness than spending it solely on oneself. Monks, who are often associated with happiness, demonstrate the practice of savoring and finding contentment in simple experiences, given the secure and supportive environments they live in.

The answer to the question of whether one should pursue a high-paying career or a simple and content lifestyle lies in understanding the purpose of money in relation to happiness. Money provides security, which is important for reducing stress. Once the baseline of security is achieved, happiness is influenced by how one lives their life and experiences. Happiness is not determined by the choice between two paths (money-driven or simplicity-driven), but by savoring experiences, prioritizing meaningful experiences over possessions, and helping others.

In conclusion, the key to happiness lies in prioritizing security, savoring experiences, valuing experiences over possessions, and spending money on others. The choice between a money-driven or simplicity-driven lifestyle is not what determines happiness, but rather how one lives and experiences their chosen path. Happiness is not found in external factors but is created through the way we perceive and engage with our lives.