Is Money Happiness?

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Paul Winkler: Welcome. Investor Coaching Show. Paul Winkler, along with Ira Work. Is it hot out or is it hot out?

Ira Work: It’s not hot enough yet.

Paul Winkler: It’s not hot enough?

Ira Work: No.

Paul Winkler: Come on. How hot do you need it?

Ira Work: Hot. I want it to kill the grass around my house.

Paul Winkler: You want to kill the grass? Go hire somebody to mow your grass. Come on, really?

Ira Work: Yeah, really. We had to do some clearing in order to build this deck.

Paul Winkler: You got any cicadas yet?

Ira Work: No. I don’t think they’re supposed to hit Tennessee.

Paul Winkler: What? Cicadas aren’t hitting Tennessee?

Ira Work: I don’t think so.

Paul Winkler: Are you kidding me?

Ira Work: I don’t think so. But in any event, so we had to do some clearing. So in order to make the city of Oak Hill happy, we threw down this seed, and the grass grew, just to show them that we have covering coming up. And it was supposed to die when it got hot. So …

Paul Winkler: Oh,you’ve gotta be kidding me.

Ira Work: No.

Paul Winkler: You really grew grass that was going to die?

Ira Work: Yeah. They rolled it out in, like, a hay thing, and they covered the ground, and it started growing. Now it’s, like, 2.5 feet tall. Yeah.

Paul Winkler: Yeah. That’ll serve you right.

Ira Work: I mean, it looks pretty good in the back from looking at it from the deck, but, like, the front of the house where they had to bring the bulldozer in and stuff. So we’re just waiting for it to die, and it’s just not dying.

Paul Winkler: Okay. So I got something. Somebody asked me this question, and it was two questions, actually. And I thought it was pretty intriguing.

If I Run Out of Money, Will I Lose My Friends?

First question. Well, it was just about mortality and just his concern about death. And it was one of these things where he said he’s afraid of dying alone was his first question. And I thought, Whoa, wait a minute, you know what?

He said, “Is that unusual?” And I said, “No, actually it’s not unusual. There was actually this theorist that says that’s one of the most common things that he hears.” But the second question is what I want to spend more time on.

The second question was: I’m afraid that if I lose money or if I run out of money, that I won’t have friends. My friends will stop coming around. And I think about Proverbs. It talks about the wealthy man loses his friends. And so that’s an age-old problem too. That’s an age-old thing that people worry about.

And he says, “What do you think about that?” And I said, “You know, it’s interesting. Really, really interesting. And I said, “It really gets down to money and purpose. And I think it really leads to a super interesting conversation.”

And I said, “So if you look at tribes in Africa, they have these anthropologists that go over there, and they find that these tribes, they’re really living in small groups. And it’s in precarious situations where their lives are at stake. And they really, really depend on each other.”

And you find this also not only in tribes in Africa, you find this around the world, that many times in poor neighborhoods, the way people actually handle money is fascinating. If you have a person that has money, and their friend comes up and goes, “Buddy, I need, oh my gosh, I need $20 so bad. You’re not going to believe this.” And that person has money on them. Many times, it’s incumbent upon them to give it to their friend.

Even though their rent may be due next week, they give it to them. And the reason comes down to cohesiveness in the group. When you live in a poor neighborhood, so many times you are very dependent upon other people around you.

And it’s kind of a neat thing in a way that you’re all interdependent in that way. You know, sometimes what happens — I’ll never forget a friend of mine saying, he was talking about living in a small house. And he says, “I live in a small house. I’m not going to get any bigger house than I’ve got right now.” He says, “Because when my daughter comes home at night, I want her to see me when she walks in the door. I don’t want her to be able to sneak in some other part of the house ‘cause our house is so big.” And I laughed, and I thought, You know, that’s kind of an interesting reason to have a small house.

But people in these African tribes would have something very similar going on, which is where one person has something that somebody else in the tribe wants. It was incumbent upon them to give it away or get rid of it. And the reason to get rid of it is because envy is really bad for cohesiveness.

If you have people that are envious of each other, then what ends up happening is that creates strife in the group. And that strife in the group, you can’t have it because your survival is based on making sure that you are all working together toward a common goal. And I remember learning that in college and being absolutely fascinated by this research out in these remote areas and thinking, Whoa, wait a minute.

“So your concern,” I said, “You know, having so much money and losing your friends, it may actually be the opposite.”

Four Ways People Handle Their Lives

And I will never forget this guy talking to me one day. Guy’s a coach and he’s talking to me. And he was talking about different ways that people handle their lives. He says the first way that they handle their lives is they need certainty. He says some people need to know — if we’re having this conversation, Ira, in this room, I need to know that ceiling is going to stay up there or I can’t have a calm conversation with you, because certainty is a need that I have.

And he says the second way that people handle themselves is they have a need for, ironically, uncertainty. If things are always certain, I get bored. I get bored. You know? So there’s a need for uncertainty.

And then some people have a need for connection. I have to be able to connect with you.

Ira Work: I think everybody has a need for connection.

Paul Winkler: Well, some people don’t necessarily have as strong of a need as you think.

Ira Work: No, I would agree with that. I’m not saying how strong the need is.

Paul Winkler: I know. No, I’m kidding with you. I think you’re right, that humans are designed to connect with each other. No question about it, but some less than others.

Ira Work: And some more than others.

Paul Winkler: Because the fourth one, the fourth need is the need for significance. And I told this guy, I said, “I’m kind of worried that I might be in the fourth group, that I have a really strong need for significance.” And he goes, “No, Paul.” He says, “There’s not in a million years, buddy.” He says, “You’re a connection guy.” And I go, “Oh, wow. You know, I never really thought about it.”

He goes, “No, let me tell you about a client of mine that has a need for significance. He’s got a yacht. And he’s off the coast of California. And he’s driving that yacht up and down the coast of California, beeping the horn. ‘Look at me, look at me, look at me!’”

And I laughed. And I thought, Oh, that’s really, really funny. But he was telling me something about human behavior in that we have these various needs, right?

And he said — so if we look at, you know, what is it about money? Maybe I think that if I have more money, I’ll be more significant, and people will think I’m really more important. And really in this case, this significant person, what is he doing? Maybe unknowingly beeping his horn, going up and down the coast of California, he’s creating envy: I want what he has.

And a lot of times we don’t necessarily respond that well to that. You know, I don’t necessarily feel good if you’re better than me.

Connection Doesn’t Require Money

And that’s really what it comes down to, is maybe you’ll have better connection if — I said, “Purpose doesn’t require money.” I said, “You can go in a hospital room with a person or a friend of yours who is sick and make that person feel better, connect with that person. And it takes no money.”

I said, “You can have a situation where, let’s say, it’s your anniversary.”

One of the most significant anniversaries that I ever had with my wife was when we were building a house. There was nothing but plywood on the floor of the house being built. The dry wall had just been put up that day. We had electricity. It was actually set up and working. I remember that because I was able to set up a microwave, and we cooked TV dinners.

And we sat in the middle of what was to be our living room on our anniversary, which is March 20. And it was cold as heck. It was freezing in there. But we sucked it up. And we sat in there and had an anniversary dinner of TV dinners. And how much did that cost? I mean, nothing. I mean, very, very little because we were broke. We were so broke, we couldn’t pay attention. And you know, the reality of it is we connected with each other and it took no money.

Or the time that we couldn’t afford James Taylor tickets. We couldn’t afford to go to the concert. And I was like, “Oh man, I wish I could afford to bring my wife to see James Taylor. I can’t afford — oh, I got a computer. And I got a little projector that I’ve been doing workshops at senior centers around town. I am going to go to the library (‘cause I can’t afford to buy the DVD), and I’m going to rent the James Taylor DVD, and I’m going to project it on the living room wall and pull the couch up. And we’re going to watch James Taylor in concert in our living room.”

And I said, “I didn’t need money to express a purpose that happened to be love in this case, right?” So the reality of it is money is just a tool to express what’s important to you or what is purposeful to you. It’s just a tool.

Ira Work: Well, when this conversation comes up, I’m just always reminded of Mother Teresa. You know, here was a woman who came from — what I understand — a wealthy family and took a vow of poverty. And most pictures that you see of her, she has a smile on her face because she’s holding a little baby.

Paul Winkler: Yeah. There wasn’t anything that anybody had that she felt that she needed.

Ira Work: Now I can bet you most people around the world know of Mother Theresa’s name, and probably not many know of that guy with the yacht going up and down beeping his horn.

What’s Your True Purpose for Money?

Paul Winkler: Wow. That hits home. That hits home. So the question comes up: Why do we invest? Why do we try to do well with whatever we’ve got? Why, why, why? Why do we go through the efforts? I mean, this is a show about money. Why go through the effort if it’s really not important?

Ira Work: It’s not that it’s not important, especially living in the society that we live in. But it’s not what we should worship. And you said it just a few minutes ago, money is just a tool.

And the only way to really — and this is getting into you don’t need as much money as you think. You know, it’s actually discovering your true purpose for money. What is my true purpose for this money? What is more important than the money itself? And when you understand what your true purpose is, which ends up becoming a true purpose for life, then that purpose, you can actually fulfill that purpose with whatever your resources are.

So for example, one of my two purposes for life is to help people discover freedom. And one of the organizations that I support is called Rescue:Freedom. And what they do is they go around the world to try to save women and children from sexual slavery. And then once they get these people out of that environment, then they actually bring them through a rehabilitation process and help readjust them to being productive people in society.

Paul Winkler: Wow. I mean, that is your purpose at work right there. And it took money to help.

Ira Work: Right. So I don’t have to have a lot of money.

Paul Winkler: Right. You don’t have to have money. You could help them do something. You can actually use your time to do that. But your money is another resource that you can use.

Ira Work: Yeah. Again, you don’t have to be a millionaire or a billionaire to be able to support them. You could send them a $50 donation, and you’re now living into your purpose. So it’s a matter of discovering: what is your purpose?

Because if you don’t know what that purpose is, there’s never enough money. Because when you get to a million: “Well, maybe I need $1,500,000. Or maybe I need 2 million.” So you reach a goal of 2 million and it’s like, “Well, I’ve got all this money, but I’m bored. I don’t know what to be doing. Maybe I just need to go and get 3 million.” So there’s never enough.

Paul Winkler: And studies show that when you get over 3 million, you start to worry about losing what you’ve got. And all of a sudden your peace of mind goes out the window. Because the purpose was more.

Ira Work: Right. Well, and the purpose was more money. But it’s not understanding, “Well, what is the purpose for me to have that money? What is my purpose in life?” Right. That’s a whole ‘nother workshop that we do.

Investing Properly Is Good Stewardship

Paul Winkler: And it really is, and it’s stewardship, you know? “This is what I’ve got. Do the best I possibly can with what I’ve got.” And that’s why we talk about investing properly. It’s not to get more and more and more and more and more. It’s just be a good steward of what you’ve got.

Because what we see that investors are getting way lower returns than what markets are. And who’s benefiting? The investment industry. And not them and not the charities and not the people that they want to help. And all the people that are out there that are inside their purpose.

Ira Work: Yeah. So again, another one of my purposes is to help put kids through school. So every once in a while I buy a lottery ticket. I don’t ever expect to win the lottery.

Paul Winkler: And that’s why you buy a lottery ticket, to help?

Ira Work: I do. I want to help put kids through college.

Paul Winkler: Just give them the money.

Ira Work: Well, I don’t think they’re gonna be able to get far with a dollar or $2. No, and I realize that —

Paul Winkler: It’s better than the 4 cents that they’ll get from the state.

Ira Work: I realize that, you know, the lottery is a tax on people who are bad at math. I’m not bad at math by any means, but it goes into the justification. People justify what they’re doing with their money. So I will take the 200 million to one odds against me and justify it by saying, “Well, it’s a 50–50 chance. I’m either going to win, or I’m going to lose. 50–50.” I don’t buy a second.

Paul Winkler: Good. I got to bring you back to something you said, though: how much is enough? And you were talking about that. And you know, we talk about, at what level does happiness start to wane? Or we have this drop-off in happiness and we don’t have an increase in happiness? And there are numbers. There is research about this out there.

Ira Work: All right. Well, I can tell you, I can give you firsthand experience on that. In 2010, I found myself going through a divorce, and my business was doing fairly well. And I said to my wife, “Look, let’s not do this. God hates divorce.” But I guess her hatred for me at the time was greater. But we’ve become good friends, and it worked out.

Paul WInkler: It’s been an amazing story. It really has.

Ira Work: But I remember being on the phone. I said, “Honey, we can go anywhere. I don’t care where we have to go. I don’t care what it’s going to cost. Business is doing well. I don’t care how much it costs us to get counseling. Let’s go for counseling.” Didn’t want to go for counseling. Okay.

So I remember being on the phone with my mom, and I had just probably come home from the mall. And I said to my mom, “I now understand the meaning of ‘Money doesn’t buy happiness.’ Because I could afford to go buy whatever I want. I’m happy when I buy it. But that happiness wears off quickly.”

More Money Does Not Mean More Happiness

Paul Winkler: Wow. Wow. And you know, we know that from a number standpoint that once somebody gets over 3 million, that happiness actually goes down, like I said. Over 75,000 per year income, it’s basically a utility curve, which is — actually, it drops off and it doesn’t grow any. The level of happiness really doesn’t go up past 75,000, what they find in the research.

Because money is glamorous, but it’s not as important as we think. But it does allow us to do things like express our purpose. And that’s really what it gets down to.

Ira Work: You know, you think about George Carlin. He did this thing about, you know, you have an apartment, you fill it up with stuff. And then there’s so much stuff that you go out and you buy a little house. And you have more room to put your stuff in, but then you just put it up with even more stuff. So then you go out and you buy a bigger house. And it’s a lot of room for all your stuff. So you’re really happy about that.

But then after a few years, it’s filled up with even more stuff. So you’re not happy about that, so you go out and buy a bigger house. And probably what we should all do is just take most of our stuff and throw it out on the sidewalk. And we’ll be much happier because it’s just less stuff. It’s just something new, something shiny.

When you get back to understanding what your purpose is, it doesn’t require millions of dollars. It doesn’t require billions of dollars. You know, we might see how unhappy Bill Gates gets when half of his fortune is gone. But we don’t need a tremendous amount of money if we know and understand what our true purpose for money is, because money is just a tool.

Paul Winkler: It is, you know? And I’ve seen, and I’ve had people tell me, that some of the wealthiest people that they know were the most miserable. And it doesn’t mean that necessarily money creates misery, but not having purpose is a big deal.

Paul Winkler, Investor Coaching Show, along with Ira Work. We’ll be back right after this.

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