Can Money Actually Buy Happiness? More Cash on Hand Just Might!

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June 21, 2017 by Mark Hammerstrom

If you are like me, you are keeping a close eye on your investments these days.  With stock prices at record highs, and bond yields still very low, it is not easy to find places to park our hard earned money that provide a low risk of loss paired with good returns.

Trying to figure out what’s next can practically make you nuts.  Check out these headlines from CNBC:

  • “Bill Gross says all financial markets are ‘increasingly at risk.’”
  • “Bob Doll: Tech sell-off may not be over but it will breathe new life into the market.”
  • “Billionaire Ron Baron says the stock market and economy will double in 13 years.”
  • “The tech wreck is a sign there could be a summer swoon.”
  • “A record number of investors believe the stock market is overvalued, survey shows.”
  • “RBC raises stock market outlook into the tech wreck, sees 7% S&P 500 rebound into the end of the year.”
  • “Analyst Mark Mahaney on why tech stocks are not in a bubble.”

And these were just from the last two days!  No wonder most of us don’t sleep very well at night.  I can’t recall a time when so much has been riding on the economic performance of our country which translates directly into the growth of our investments—particularly those in our retirement accounts.  In the face of shrinking pensions and the instability of pension funds, combined with the potential of further modifications to Social Security, there are not just a few of us biting our fingernails.

So when our youngest daughter came to me the other day and asked if she should put some of her hard earned college savings into an investment that would earn her a higher rate of return I just sort of locked up.  I think I just blinked blankly for a moment or two before saying “Don’t do anything.  Leave it right where it is in the bank if you want to sleep at night.”  Those were the best words of investment wisdom I could come up with.

Ah, for the days of recommending she buy, ala Forrest Gump, as many shares as she could in a “little fruit company.”  True, banks in general hardly pay anything for the use of our money, but by and large they are safe and may, in fact, provide an even more valuable return: “Life Satisfaction.”

The American Psychological Association published a study done by Peter M. Ruberton (University of California, Riverside), Joe Gladstone (University of Cambridge) and Sonja Lyubomirsky (University of California, Riverside) entitled “How Your Bank Balance Buys Happiness: The Importance of ‘Cash on Hand’ to Life Satisfaction.”  (American Psychological Association, 2016).

Their study looked at the relationship between types of wealth and our feelings of well-being.  They pointed out that there have been a number of studies done that show a “…small, but discernible, relationship between income and well-being…”  They note that “Superficially, it appears that wealthier individuals—or at least, those who have sufficient wealth to meet, or marginally exceed, their basic needs (Kahneman & Deaton, 2010)—are also happier.”

Yet their study found that wealth alone provided an “…incomplete portrait of the link between wealth and well-being.” For example, someone who is wealthy but overspends their income, or is in significant debt, may be less satisfied with their life than someone who is more frugal and smarter in how they save and invest.

To look deeper into “Life Satisfaction” their study was done using a large, but random, sample of customers of a large national bank in the United Kingdom.

Their conclusion?  “Our results suggest that having a buffer of money available in checking and savings accounts confers a sense of financial security, which in turn is associated with greater life satisfaction…This finding suggests that people with low liquid account balances may feel more economically distressed—and thus less satisfied with their lives—than their peers with higher balances, even if their incomes and spending, considered separately from their account balances, would predict high financial security.”

So, if “Life Satisfaction” is your goal, nothing quite seems to beat cash on hand.  Take it to the bank.

United Credit Service, Inc. is a full service, licensed revenue cycle management and debt collection agency in Wisconsin providing effective, customized one on one management and recovery solutions for our business partners. Visit our website at, call 877-723-2902, or check out our YouTube video.


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