Why are rich people happier?
Over at Free Money Finance, there’s an interesting post about rich people and happiness. To quote:
Happier people have a better outlook on life, they think the impossible is possible, they dream, they work well with others, and on and on. Let’s face it, happier people simply have more of the qualities that our society values — and in a free-market economy a monetary value is placed on these qualities — a value that’s higher than that of people who do not possess these qualities. Hence, happy people make more and are wealthier.
I agree, but I think it begs the question, "Why are rich people happier?"
My personal opinion: control. Wealthy people are more confident, organized, and skilled than others. They’re in control of their lives. When you’re in control, you feel safe, peaceful, and less fearful. You recognize the power of your own agency — you’re doing exactly what you choose to do.
If you doubt me, go find an unhappy person. Dig around long enough and you’ll find a feeling of helplessness. Sometimes the person will know their problem and sometimes they won’t, but they’ll always feel powerless to change the situation.
Let me give you an example from my own life. Several years ago, my father and I partnered up with a talented and well respected businessman on an apartment project. He started having financial problems, so in desperation, he stole $1 million of our money from the project.
We, of course, sued him, and when we were just about to win, he declared bankruptcy. So, we had to wait for months while the court sorted out his complicated finances. I’ve never felt so powerless in my entire life. Both my father and I slipped into depression, and because of that, our other investments faltered. It was like a black hole.
Then, one day, the bankruptcy court made their decision. "Mr. Morrow," they said, referring to my father, "Your claims are subordinate to so many others, and there’s not enough money. I’m sorry, but you’re going to lose the $1 million."
His response? "That’s all right. I’ll make it back."
Instead of being crushed, he was just relieved to have a decision. Now he could think about something else. From then on, we knew what we had to do: rebuild the business. And so we have. It’s 10 times larger now than before we lost the one million.
For us, the crucial difference was that feeling of control. Nothing actually changed from when we "might" lose our money to when we had "definitely" lost our money. It was just a change in perception. By beginning to believe we were in control of the ultimate outcome, we were able to turn it around.
But let’s go just a little bit deeper. How exactly does one get to feel "in control?" If you want to find out, stay tuned for the next few days. I’ll write a post about it soon.