Business mogul Warren Buffett has been making headlines a lot lately, first for his controversial position on cryptocurrency, and, more recently, for his incendiary remarks on money and happiness.
Speaking on CNBC's "Squawk Box" last month, Buffet said people are wrong if they think that having more money will make them happier.
"I wasn't unhappy when I had $10,000 when I got out of school," he said. "I was having a lot of fun... If you have $100,000, and you're an unhappy person, and you think that a million dollars will make you happy, it is not gonna happen... You will not be way happier if you double your net worth."
His comments inspired a lot of ridicule on the Internet, since Buffet is the second wealthiest person in the United States, with a net worth of 86.3 billion.
"I think going from $10 to $20 would make me happier," one Twitter user wrote in a popular tweet.
"My net worth is negative because of overbearing student loans so yeah doubling a negative number wouldn't make me happier," another Twitter user wrote.
While the reasons for this ire is understandable, it's also somewhat unfair because what Buffet is saying is both wise and backed up by data.
Firstly, he was careful in his wording. He didn't say that doubling your net worth wouldn't have any effect on your well-being whatsoever, only that it wouldn't put you into a heightened state of happiness. In the interview, he admits that doubling your net worth will initially yield a "euphoric surge," but that'll taper off, and if you've got a million dollars, you'll soon start thinking you'd be happier if you had two million dollars, and so on and so forth endlessly. This is in keeping with the hedonic treadmill—an observed tendency of human beings to have a set level of happiness that they always come back to regardless of what happens in their lives.
Secondly, Buffet is clearly not referring to people who live below the poverty line. His example described a hypothetical person who had $100,000, which is already a very comfortable sum of money. The fact that he used that particular number, in fact, is interesting, because a recent study has found that while there is definitely a difference in happiness between someone who makes, say $25,000 and $75,000, after $95,000 the difference tapers off entirely. Some studies have even shown that people often become unhappier after $100,000 because of the additional responsibility and stress and the lack of leisure time that the production of their wealth requires.
Thirdly, Buffet is touching upon something quite poetic in saying that he wasn't "unhappy" when he graduated from the University of Nebraska with only $10,000 (though, to be fair, $10,000 in 1949 is the equivalent of around $100,000 now, but he earned that money entirely on his own by delivering newspapers and making smart investments). What he's really saying is simply that money doesn't buy happiness, and no matter how much wealth you accumulate, you can always want more, and thereby feel eternally unsatisfied. That's why it's so important to focus on things outside of money, like family and love, in order to be happy.
His philosophy completely mirrors the secret to happiness that Albert Einstein once wrote on a note, "A quiet and modest life brings more joy than a pursuit of success bound with constant unrest."
For what it's worth, Buffet practices what he preaches as well. The 87-year-old still lives in the same relatively modest 5-bedroom, two bedroom home that he bought for only $31,500 in 1958 (about $250,000 in today's dollars). When asked why he hasn't moved into a more luxurious abode, he told the BBC. "I'm happy there. I'd move if I thought I'd be happier someplace else."
Now that's inspiring. And for more uplifting lessons, don't miss these 50 Inspirational Quotes to Energize Your Days.
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