Todays’ NYT includes “Maybe Money Does Buy Happiness After All.” To moderate the dollars uber alles message, the article says “some of the things that make people happiest — short commutes, time spent with friends — have little to do with higher incomes.” In a United States that gets more crowded every year (“ask an American Indian what happens when you don’t control immigration” will become more poignant when we cross the 400 million and 500 million resident lines), houses that are close to jobs are going to become ever more expensive. If you work in Manhattan, have a wife and kids, and want a commute shorter than 45 minutes, you’ll need $3 million for a 3BR apartment. Things aren’t much better in California and the other coastal areas where most Americans live.
What about “time with friends”? Imagine that you work in Los Angeles and, because you can afford only $350,000 for a house, have a four-hour daily round-trip commute to an exurban subdivision. How much time will you have available to be with friends? Contrast that to a multimillionaire who lives and works in Santa Monica and can ride a bicycle 15 minutes to work.
“Time with friends” becomes even more of a luxury in a country where people disperse geographically after high school, after college, and after graduate or professional school. Peoples’ closest friends tend to be those made during the ages of 15-30. With domestic airfares getting closer to $1000 round-trip and hotel rooms in big cities between $300 and $400 per night, how often will a middle class American be able to see friends from college?
It’s a block and a half. I don’t even own a bicycle. (The recumbent tricycle doesn’t count.)
Can’t say money buys happiness, but it sure tends to remove many pressures that can make you unhappy.
One thing to note here is that commuting costs can quickly swamp savings on house prices. So it’s actually cheaper to live closer in. Of course, since this takes a larger up-front investment, you could argue that this is another case of the general argument that it’s much cheaper to be rich than it is to be poor.
My personal theory is that money doesn’t buy happiness. But it sure can put you in a better negotiating position.
There was an article in Fortune about a year ago that talked about the financial threshold of the middle class.
According to them a family does not cross into the realm of the middle class until they are earning $85,000/year. Middle class continues all the way to about $450,000/year before crossing into the rich class.
As an aside I am currently employed as a captain by a major airline. I have never owned a new car and probably never will. I can’t afford to buy any of the houses I grew up in and I have no retiree medical plan or pension.
An article in the Wall Street Journal estimated that a couple with a good retiree medical plan needs to have $200,000 saved up to pay expenses not covered by insurance.
If you are not upper middle class or rich you had better get a civil service job with a guaranteed pension and medical care.
All,
There is a simple little book available at nearly any book outlet entitled “The Wealthy Barber”.
It should be read by anyone in the U.S. in the middle or lower income classes who wants simple, honest and extremely helpful information about investing for a worry-free retirement.
There are myriad ways to save/invest for retirement in lieu of feeling like you must get a job that offers pensions, insurance, etc. for you to survive in your golden years. This book is a wealth of information (no pun intended).
The problem with Money is that it may remove many of the pressures/reasons for unhappiness but it only works for the bearer.
Yes, one thing money does buy is the security of liquidity which can then be invested in improving the speed of life, the convenience, the comfort of travel.
Immigration is uncontrolled in Britain too, but even before it was nobody has really been able to afford a short commute. Most of the people living in central London, 2 million dollars for something decent, don’t even work on a daily basis. The people who do have three hour a day commutes.
But the US still has far more space and far cheaper gas. Here there is real pressure between the cost and discomfort of commuting and the price of living nearer.