This is Part 2 of a 3 part post. If you missed part 1 last week, check it out here.
Can money buy happiness?
It’s a great question! And it’s complicated…
Investing Versus Spending
Investing isn’t always easy, but the recipe is basic:
- Spend less than you earn.
- Invest the difference in VTSAX or a similar, low-cost index fund.
- Wait for compound interest to make you rich.
For those in America:
- If you make a lot of money: Favor a 401(k) to reduce highly taxed income.
- If your income is low: Favor Roth (post-tax) investments.
Spending is a far more complex task. After basic needs are met, there a billion different shiny objects, services, and experiences that you can throw money at.
I decided to experiment with spending. And not just small experiments. The experiments below cost a healthy $14,400.
Spending Experiments
Can money buy happiness? If so, how? And spending on what?
#1: Frontera Grill Versus Taco Bell ($200)
I’m not much of a foodie. Simple food prepared at home suits me fine. A good cheeseburger or deep-dish pizza is about at good as it gets.
One exception is mole. Mole is a sophisticated Mexican sauce that’s difficult to make. There is lots of mole out there, but few good examples.
There’s a famous restaurant in Chicago called Frontera Grill that’s famous for it’s mole. Mindy and I decided to give it a try:
The meal set us back $200. This included drinks, an appetizer, and dessert. We usually don’t have appetizers or desserts, but we don’t usually go to Michelin star restaurants either. Go big or go home.
Verdict: The food was really good, but I’ve had meals that have cost 10% as much that I similarly enjoyed. Heck, I don’t mind Taco Bell. I wouldn’t do this again.
#2: Helicopter Ride ($1,400)
On a trip to Kauai, we took a helicopter ride. I have never been on a helicopter before, but:
- I love flying: I’m one of those people who gets a window seat on a plane and stares out the window the whole time.
- I love aircraft: Things that fly are awesome. The End.
- I love Kauai: So green, so beautiful.
Verdict: So yeah, the doorless helicopter ride was slightly terrifying, but it was completely awesome. I’d do this again in a second and will whenever we’re in a beautiful place.
#3: Taylor Swift ($1,000)
My daughter was able to secure one Taylor Swift ticket. One. I had no plans to go, but agreed to take her to the show.
Daughter and I walked to the venue and I was overwhelmed by the energy. There were people all over Denver going nuts for Ms. Swift. I dropped my kid off, walked back to our hotel and decided to look at tickets on aftermarket sites. With the first opening act already onstage, ticket prices were coming down. I ended up buying a pretty great seat for $1,000.
Verdict: The show was amazing. I will probably never blow $1,000 on a concert ticket again, but I don’t regret this at all.
#4: Private Concert ($11,000)
Back in the early 2000s, Mindy and I lived in Chicago. I followed a lot of local bands and one of my favorites was the Webb Brothers.
The band launched a kickstarter to release some new music. The top prize was a private show for $10,000. After a lot of internal debate (and after securing Mindy’s approval), I bought the show.
Verdict: I doubt an opportunity like this will ever come again, but I’d do it again in a second.
#5: Corvette ($800)
I’ve always been a car person. I don’t really like this about myself. A nice car is just one more object to have to maintain and insure. Besides, I’ve come to really dislike most driving. Too much traffic and too many bad drivers.
And I’ve done a version of this experiment already. I once owned my dream car (Acura NSX) Like most shiny new things, the joy wears off. We sold it a couple years after buying it. And while I probably won’t buy another sports car ever again, I can rent one every once in a while. And this is exactly what I did on a recent trip to Los Angeles:
Verdict: Driving in Los Angeles traffic sucks. One way to make it even more miserable is to experience it in a fancy sports car. The Corvette has horrible rear visibility, a firm ride, and chugs expensive gas. Not fun. However, in the mountains east of San Diego on twisty roads, the Corvette was great fun. I may rent a fancy car again, but only in the right setting.
Why It’s Worth Experimenting
No regrets: I probably won’t buy a $1,000 concert ticket again, but if I hadn’t gone, I know I would have regretted it.
You may learn something about yourself: How do you know what you like or don’t unless you try something? I’ll definitely take a helicopter ride again. Maybe one of my kids will become a helicopter pilot?
New experiences create happiness: This is why most people love to travel.
The Problem With These Experiments
Not sustainable: I’m not going to rent Corvettes or go on helicopter rides every day.
Everything gets old: If I were to go on a helicopter every day, the novelty would wear off. It would probably take a long time to get boring because helicopters are awesome, but eventually, it would.
Memory dividends (Die With Zero) are overrated: While I enjoyed all of these experience, I don’t sit there and ponder them every day. I’m glad I did all of these things, but they don’t create long-term, deep happiness.
What Now?
The experiences in this post all made me happy. However my daily life isn’t spent in Michelin star restaurants or Corvettes or helicopters.
But there’s no reason why we can’t introduce unique, unexpected and challenging experiences wherever we’re at in life. Novelty is one of the key components to happiness. More about it in next week’s post.
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Carl,
I thoroughly love your posts in general and this series in particular. The introspection you have described is similar to the introspection I have been trying to accomplish in my own life.
It was interesting for me to finally realize that I have entirely too much stuff, most of which I tend to hang on to because “one day I might need this RS232 to USB-A dongle again, even though I haven’t used it in at least 15 years …” It is somewhat difficult for me to let go of those things (which admittedly cost some amount of money at some point and which take space, both physical in my home and mental in my brain) and then to embrace other things like those which you have described in this post. It has definitely been a process for me. I have done through at least three major rounds of purging junk and clutter from my house and I recently took a somewhat big trip and have another coming up soon.
Yet, with all that, I find that I still need to expend conscious effort in these areas. “No, hanging on to this $10 trinket will not make my life better, it will just add clutter that has to be organized, kept clean, and eventually moved to the next house. If I need another one 5 years from now, I can get it then.” “Yes, this trip will cost $5k, but it’s going to have some amazing once in a lifetime experiences and this is something that I should do sooner rather than later.” It feels like I will always need to positively engage my brain in these areas because my default is to let the clutter accumulate and put off the worthwhile experiences for another day.
I can’t find the precise post now, but Steven and Lauren (Trip of a Lifestyle) posted a while back something along the lines of “don’t make your house the temporary stopping point for stuff going from the store to the landfill.” That mindset has been super helpful to me recently as I try to shift my thinking.
Thanks for the comment Robert!
I’m currently going through all of the junk I kept too. I call it my “just in case” crap. Like you, I’ve come to realize I value a clean space much more than the thought of potentially saving $5 at some future point in time.
Just stopping in to say I love this series and the recommendation to read Die with Zero. I have mostly been frugal but it really opened my eyes to spending on certain things while I am young enough to enjoy it (almost 50)..
Memory dividend is defiantly overrated as I could not remember the trip that I took 6 months ago. Others include slow travel like a local (how many times does one hang out with locals at home)? I realize that most people who come up with these slogans want something from you (eye balls, sales, etc) and make you think there are things you miss in life. Aim for contentment and be satisfied with oneself work the best.
Great post. I am enjoying the series. I am asking myself quite a lot of the same questions lately.
In my own experiment, I bought a $40k (net) model Y LR the other day. No regrets 2 months into owning it. I wrote about it here: https://frugalprofessor.com/we-bought-a-40k-net-tesla-model-y-lr/
I just picked up a Y LR as well! Great car so far, except for FSD. That part is not so great.
You kinda touched on it, but I feel novelty is generally super fun and monotony not so much. New drivers license, the best! Commuting every day, the worst! Crunch wrap supreme, the best! Crunch wrap every day, the worst! Its difficult to find but my goal (which I am still working on) is finding the thing that feels new every day. I’m interested in what your conclusion says.
Oooh, tune in for the conclusion. We’re on the same page here, but it’s not easy.
Do you still have your NSX? I know I never made it down to see you, but I wouldn’t mind a ride in an NSX again. I can show you my new ride too which I think is actually faster.
wow, that’s a lot of dough down the drain! that private concert takes me back the jeff spicoli’s dream when he wins the surfing contest in fast times at ridgemont high. “i’ll jet on over to london and jam with the stones!”
i personally spend on good wine and the occasional good restaurant. especially our favorite place in new orleans, commander’s palace. it always seems memorable especially if friends are joining us.
And then Spicoli rescued Brooke Shields and hired Van Halen! Spicoli was my inspiration!: https://www.youtube.com/watch?v=EJcv5kGuBvs
Everything is elevated with good company.
Learning to spend is hard, I enjoyed reading how you’re challenging yourself to spend more. Well done! In my case, I splurged on a $5k e-MTB and haven’t regretted it for a minute. It’s a blast being able to fly up the mountains I call home!
Fritz! eBikes are magical! I have one as well and it’s one of my greatest possessions. Pure joy!
Which model did you get?
Happiness is hard, but worth it.
Two things:
1. I’m totally spoiled; I rode on helicopters so much in my job before last that I couldn’t fly in one for more than five minutes without falling asleep. Something about the rhythmic thumping and the chronic sleep debt. Dudes had to hit me to wake up before we parachuted out of them.
A few years ago I was on a family vacation and one of my relatives asked if I wanted to go on a helicopter ride with her. I was like…..why? Like you said, too much of anything(no matter how exciting) gets tedious. Story of my working life right there. But it’s cool you finally got to ride in one, and especially in such a beautiful place.
2. Taylor Swift is AMAZING! I for sure overuse the phrase “it’s not all rainbows and unicorns”, but you know what is non-stop freaking rainbows and unicorns? Taylor Swift in concert. Hands down, full stop, or whatever current phrase we’re using to overemphasize that we’re super sure about something. Got to see her at work awhile back, even got to go back stage AND kick a chomo out of the venue. Glad you ponied up for that experience Carl.
Good post. Great to see that you are starting to understand your wealth and the appropriateness of changing your mindset to consumption over savings and work. Your position today is, financially, hugely different from 2013. In fact since 2020/2021, you have been ‘saving’ far beyond your previously stated forever need. Certainly, since 2021, you should have stopped doing anything you really don’t want to do and to do more of the ‘bucket list’ stuff. Congrats on moving your mindset to todays reality (for you).
I’m writing this because of a specific comment you make: “…The Problem With These Experiments
Not sustainable…” I respectfully disagree.
A modest suggestion about spending. Give yourself a meaningful ‘budget’ to spend on stuff without thinking. Maybe you give yourself the ‘right’ to spend $10,000 a year without need for analysis, justification or even reason (and a similar amount separately for your wife as well). Then you don’t even have to think about the dinner, corvette ride, helicopter ride or Taylor Swift ticket. Or explain it to any one. If it turns out to be a bad choice, so what. We’ve done this for a few decades and life is simpler and no negative discussions or bad feelings. You can use this to make your life simpler … I’ve often picked up an entire restaurant check (where a split isn’t common) because I know my wine choice is too expensive for the other couple. I can always be counted on to make sure the beer isn’t going to run out at a byob event. And an electronics purchase that isn’t really necessary. We also have flexible budgets for helping the extended family. Gifts are a bit over generous to those who need it or are starting out or who just might enjoy a little extra budget money.
We always discuss and agree on big items. We have thrown really big private events … like wedding eve dinner events or wedding receptions. But also sports suites for family groups. And some odd things like taking my older grandkids on an African Safari.
Not meant as a humble brag but to point out that at the $4MM level your pool of money is likely to grow around $300,000 annually. You appear to have a lifestyle below this level of spend. I’m suggesting that you have some fun with the surplus and do some good. Is it really important that you have only $6MM in 2033 and not $8MM+?
And if circumstances change, the discretionary plan can change as well. As I’ve said before, you had a plan and you achieved it 4x. Time to move to the celebratory part.
Congrats on a good start on this new phase in your life.
“Maybe you give yourself the ‘right’ to spend $10,000 a year without need for analysis, justification or even reason (and a similar amount separately for your wife as well).”
I like that suggestion a lot. A friend, Mark Trautman, has a similar idea: https://marksmoneymind.com/the-fun-bucket-overcoming-the-frugality-mindset/
“And if circumstances change, the discretionary plan can change as well. As I’ve said before, you had a plan and you achieved it 4x. Time to move to the celebratory part.”
Yep. I haven’t been good at evolving with our changing money situation, but we are going to do some pretty big things in the years to come including renting a castle or big house to hang out with friends.