Introduction:
College graduation speeches come in various lengths and styles. Some are truly stunning, but most are forgotten immediately, even when delivered by a celebrity. One piece of wisdom you can almost always count on hearing in every speech of this kind is some purported wisdom: “Follow your dream, because money can’t make you happy.”
But this wisdom is not always widely accepted among new graduates. Financial writer Michael Schram, who is a college student himself, has a real problem with this advice. He offers his critique of this adage in Money magazine, presenting great ideas to ponder as college graduates enter the job market burdened with student debt, wondering how to invest their time and effort over the next four years.
Can Money Buy Happiness?
Schram states that the suggestion that money doesn’t buy happiness is “half-truth at best, and a lie at worst.” In his personal experience, money and happiness are closely linked. Schram grew up in a home facing a real threat of eviction, where a large hole in the roof went unrepaired, and even the smallest purchase for food could lead to a tense and stressful argument about money.
“When the bills came in that couldn’t be paid, money became a beast that tormented me,” Schram says.
All of that changed for Schram when he received a college scholarship and a stipend that allowed him to meet his basic needs. Schram felt the anxiety fade and was able to focus on things other than money, which he began to view as a friend rather than a monster.
“Simply put, more money buys me happiness.”
Measuring the Link Between Money and Happiness
Schram’s arguments go beyond the abstract. He cites recent studies that indicate a connection between happiness and income – up to a point. According to at least one study, happiness levels off once annual income reaches $105,000, and people earning $200,000 are no happier than those earning $120,000.
However, students still receive the message that pursuing a good living exposes them to a dull and dreary life. Schram believes this is a dangerous pattern.
Instead, he warns students and job seekers to strive for a realistic balance between fulfillment and income. Additionally, Schram urges graduates to think carefully before pursuing a dream or passion that might leave them struggling with bills in the long run.
“Your happiness certainly increases with work that you enjoy, but that will be tempered if your passion can’t cover the costs of food, water, shelter, and utilities – if you can’t put money in a savings account… if luxury spending is entirely out of reach.”
While pursuing passion can be emotionally rewarding, it might leave students with a gap in their financial plan if they are unable to handle a financial emergency or plan for larger investments, such as buying a home.
Conclusion: Focus on Achieving Both Equally
Schram suggests that students research job opportunities and salaries in their dream careers and honestly assess whether they can live a decent life on that income. If not, he suggests they might consider some sort of compromise. For example, a new computer science graduate who has a passion for helping the poor might volunteer to oversee an information system for a poverty-fighting organization. This type of arrangement allows them to enjoy the best of both worlds, to some extent.
“You may…
“It doesn’t seem as fulfilling as pursuing your dreams, but here’s the calculated truth: it will provide you with happiness.”
Tip:
When exploring job options, you should consider the demand in the field as well as the long-term earning potential. Look beyond the salary to the type of benefits the company may offer that can enhance the job’s value.
Disclosure:
This information is provided to you as a source of information only and for advisory purposes. It is presented without regard to the investment objectives, risk tolerance, or financial circumstances of any specific investor and may not be suitable for all investors. Past performance is not indicative of future results. Investing involves risks, including the potential loss of capital. This information is not intended to form a primary basis for any investment decision you may make. Please consult your legal, tax, or investment advisor before making any investment/tax/financial planning decisions. Source: https://www.thebalancemoney.com/follow-the-money-and-not-your-passion-4064193
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