Does money buy happiness?

Can more money make us happier?

The answer to these questions is: Yes... And no.

It really depends on the individual, the situation they're in, and how they're spending their money.

In this video I'll examine the relationship between money and happiness.

And hopefully you'll be able to answer those questions for yourself.

Sources:

75k mark: https://www.pnas.org/content/107/38/1...

Relative position: https://www.semanticscholar.org/paper...

Relative position 2: https://www.ncbi.nlm.nih.gov/pmc/arti...

Lottery winners: https://www.researchgate.net/publicat...

Working more vs working less: https://papers.ssrn.com/sol3/papers.c...

Spending on others: https://www.researchgate.net/publicat...

If you're like most people, you probably have a to-do list, and you use it to help you focus on getting things done.

If you don't have it, you might want to make one, as it brings plenty of psychological benefits.

However, I would also suggest you create a not-to-do list.

This list compliments the to-do list incredibly well, and it might be even more important.

Let me explain...

Let's say you buy a $10 movie ticket.

But 15 minutes in, you realise this movie isn't what you expected it to be.

However, because you feel like you're supposed to get your money's worth, you decide to watch the rest of the 2 hour movie.

This decision is based on your loss of $10.

But it isn't an optimal one.

A more logical thing to do, would have been to get up and leave after you had realised this movie wasn't what you wanted to watch.

Wouldn't you be better off, had you only wasted $10 and 15 minutes of your time, instead of wasting $10 and 2 hours?

Had you left early, you would've essentially gained 2 hours of extra time.

Those $10 you spent were gone or "sunk" either way. You couldn't get them back, whether you watched the rest of the movie or not.

And that phenomenon is what psychologists and economists call: the sunk cost fallacy.

It's one of the more common cognitive biases that clouds our judgement.

Instead of making a decision based on potential future returns, we make them on our past losses.