Money may not be able to buy you happiness, but it can make life a lot easier.
That’s the view of Simran Kaur, a financial educator and investor who hosts the “Friends That Invest” podcast.
In an episode this week, Kaur spoke about money “myths,” including the notion that money can’t buy happiness.
Having more money doesn’t necessarily improve emotional well-being or happiness, she said, it just helps to solve inconveniences.
“I find that wealthy people have what I like to call this inconvenience buffer, and the more wealth you have up to that certain point, the larger your inconvenience buffer grows,” Kaur said.
As people become wealthier, their financial position creates more of a cushion for when something goes wrong, she added.
“When I was a student, I didn’t have much of an inconvenience buffer at all because I didn’t have extra money,” she said.
“If I missed a flight or if I lost $50 or if I just did something, my car, you know, got crashed or I had a dental emergency, those things really affected my day-to-day life,” she continued.
Kaur said that these setbacks were so stressful they could “ruin” her week or month. Wealthy people have a financial buffer that makes this easier, she said.
Kaur said that as she grew richer from investing, she realized that, “if I missed a flight, it was embarrassing and annoying, but a wealthy person can call someone up and go, ‘Hey, can you rebook a flight for me?'”
“You find that life’s problems do not cause you as much stress and harm,” Kaur added.
She cited a 2010 research paper by Princeton professors Angus Deaton and Daniel Kahneman, who said an increase in income, such as a pay rise, can improve happiness but only temporarily, as it often then returns to previous levels.
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