A pocket of prosperity: Spending, not strategy, saves retirement

Published: Thursday, February 6, 2014 at 05:06 PM.

My late father-in-law, Wayne, was an unusually handsome man and equally taciturn. It took a pair of charming grandchildren for me to rank … logically I see in retrospect.

 When he died I held most favored son-in-law status, an honor no doubt enhanced by my solitary position. The last Sunday dinner my wife shared with him, he said in an off-stage whisper, “Your mother sure has a lot of stuff.” One problem with possessions can be ownership.

Do you own them or do they own you?

We are three weeks along on a literary/financial journey looking at roadblocks impeding your goals, mostly financial but some personal. This week we look at happiness.

Study after study indicates personal happiness in not strongly correlated with income. Of course, minimum wage workers tend to score lower on life satisfaction measures than people making $100,000. But the income/happiness point of diminishing returns falls in the neighborhood of $65,000. I can testify there are tons of happy folks making multiples of this number but often the more you make the more stuff you have and that’s all.

It’s like the old saying, you are rich if you make more than your brother-in-law. 

Once your basic needs are met, extra income does not automatically translate into greater happiness. Psychologists call this a hedonic treadmill where the more money earned leads to increased desires and expectations rather than making you feel better. Don’t draw the Queen of Diamonds; she’ll beat you if she’s able.

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