An economist and two psychologists walk into a bank. They ask customers “How much money do you have?” and “Are you happy?” The results showed that the customers with more money were happier. According to a recent study, this is clearly no joke!
Behavioral Economists study the effects of psychological, social, cognitive, and emotional factors on economic decisions. Recently, a behavioral economist and two psychologists looked at two fundamental questions:
- To what extent can money lead to happiness?
- Do illiquid (invested) funds provide the same happiness as money that is available to spend?
When Walden Wealth works with clients, we start by understanding life goals and values, and what drives happiness and fulfillment. Next, we examine cash flow, taxes, and the balance sheet, including earnings, investments and indebtedness. The results of “How Your Bank Balance Buys Happiness: The Importance of ‘Cash on Hand’ to Life Satisfaction” were eye opening for us. While we have seen the correlation of cash and happiness in real life situations, now there’s evidence on a large scale.