Is Happiness Really a Matter of Dollars and Cents?

The world recently lost one of the 50 highest ranked economists in the world1. Alan Kreuger was the James Madison Professor of Political Economy at Princeton and Research Associate at the National Bureau of Economic Research. He served as Assistant Secretary of the Treasury for Economic Policy during the Obama presidency and was also his Chair of the White House Council of Economic Advisors.

But what I find most intriguing about him, is that he also studied happiness. Seriously, I’m not kidding. 

Along with the Nobel-Prize winning psychologist Daniel Kahneman, Kreuger co-authored what is considered to be one of the best papers published on happiness economics, “Developments in the Measurement of Subjective Well-Being.” It’s not what I’d describe as “light reading,” but if you’re so inclined, here it is.

Needless to say, there were many tributes to him when news of his death became public, but one that really resonated with me was a personal memory of a conversation with him, shared by David Leonhardt, the New York Times Opinion Columnist. They had been discussing Kreuger’s work and Leonhardt asked whether or not any of his (Kreuger’s) findings on happiness had an effect on his own life. 

His answer was “yes,” and he talked with Leonhardt about the lessons he’d learned — one of which is particularly relevant, given what I do for a living:

  • We should shift our focus from buying gifts to sharing experiences. Studies showed that while we appreciate the thought behind the gift, we don’t really value the object we’re given. But what we do find meaningful are the reminders of happy experiences. See some examples of what he means in the column, it’s well worth the few minutes of your time it will take to read it.

Wondering what the connection is between gifts and my being an Investment Advisor? Directly, not much, but indirectly, everything. 

I am, after all, here to help my clients save, invest, protect and increase their net worth. To help them become successful investors. To help make them, and keep them, wealthy and to also ensure they have something to leave behind. But what Dave Leonhardt’s column brought home to me, what struck me immediately as I read it is, so here we all are — engaged in the pursuit of financial security — which is fine, by the way, I’m not suggesting otherwise. But upon reflection, it does beg a couple of questions:

  • Does being wealthy make us happy? 
  • Once we are wealthy are we satisfied?

Ironically, just days before Alan Kreuger passed away and I found myself reading the Leonhardt tribute, I had just finished reading a book about happiness — one I highly recommend — The Happiness Equation, by Neil Pasricha. It’s got to do with life in general, but there are a couple of chapters that tie in perfectly with the conversation we’re having right now.

Important takeaway number one is in the very first chapter of the book

As young children, we’re taught to believe that “we work hard in order to achieve big success and then we’re happy.” 


Pasricha contends that “it doesn’t work that way in real life … that the model is broken … because we do great work, have a big success, but instead of being happy, we just set new goals … we study for the next job, the next degree, the next promotion.” He asks “why stop at a college degree when you can get a master’s? Why stop at Director when you can be a VP? Why stop at one house when you can have two?”

So here’s my question: Are we the same when it comes to our financial goals? Are we so driven to have “more,” we forget to be satisfied or happy or content or whatever you want to call it, with what we have?

Without knowing it, Pasricha provided one answer to my question in Chapter 3

When you see the title of the chapter you’ll understand why it caught my attention. It’s “The one thing many billionaires want but cannot have.”  It’s such a good example of the point I’m trying to make, than rather than me paraphrasing, here is an excerpt, verbatim:

“Kurt Vonnegut and Joseph Heller are two of the most famous authors of the twentieth century, writers of classics that have sold millions, including Slaughterhouse-Five and Catch-22. They were friends, and there’s an old story Kurt Vonnegut wrote in The New Yorker after Joseph Heller passed away:

True story, Word of Honor:

Joseph Heller, an important and funny writer

now dead,

and I were at a party given by a billionaire

on Shelter Island.

I said, ‘Joe, how does it make you feel

to know that our host only yesterday 

may have made more money

than your novel Catch-22

has earned in its entire history?’

And Joe said, ‘I’ve got something he can never have.’

And I said, ‘What on earth could that be, Joe?’

And Joe said, ‘The knowledge that I’ve got enough.’”

Don’t get me wrong. I’m not trying to talk myself out of a job. There’s nothing wrong with wanting to be successful and being well off. I just think we should be mindful of what we’re doing and why and when enough’s enough. And that we don’t get so caught up in the wanting and making that we forget about the doing, sharing and enjoying.

1 Research Papers in Economics


Alan Friedman is an Investment Advisor with CIBC Wood Gundy in Toronto. The views of Alan Friedman do not necessarily reflect those of CIBC World Markets Inc. CIBC Wood Gundy is a division of CIBC World Markets Inc. a subsidiary of CIBC and a Member of the Canadian Investor Protection Fund and Investment Industry Regulatory Organization of Canada. If you are currently a CIBC Wood Gundy client, please contact your Investment Advisor.



One thought on “Is Happiness Really a Matter of Dollars and Cents?

  1. Thank you, Alan,

    Really interesting study and observation.


    Donna Vieira

    The secret of genius is to carry the spirit of the child into old age, which means never losing your enthusiasm. — Aldous Huxley



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