More Money, More Happiness? 💸

Yes. This is the CityChad, your money and lifestyle guru, here to help you finally afford those avocado toasts everyone keeps talking about.

In this week’s edition:

• Markets led by Tech earnings, Bank fears continue

• More Money, More Happiness?

• News: “You are poor, accept it” (BofE economist)

• Travel Destination: Riga

• Chad of the Week: Ramit Sethi

MARKET REVIEW

The global stock market had a mixed week, it seems investors cannot make up their mind on which way things are going.

Tech stocks reported positive earnings, with Alphabet (Google’s parent company) beating estimates and META crushing it too.

However, banking stocks continue to worry investors and cause caution, with First Republic going on freefall.

Crypto had another volatile week, failing to reach the recent highs but getting close.

Even the banks are contradicting each other in their predictions, with Bank of America predicting a “summer rip”, whilst JPMorgan calling the recent rally “irrational”.

MORE MONEY, MORE HAPPINESS?

TLDR: A new study has found that for most people there is no upper limit to how much money can increase their happiness. The Chad has no doubts that making more money and enjoying it makes him happy. Just remember that money is a tool and almost never a final goal.

• More money means more happiness for most people

• Some people do experience a limit, others are even happier faster with more

• Billionaire hedge fund manager Ray Dalio recommends having clarity on what makes you happy before seeking it

CAN MONEY BUY MORE HAPPINESS?

It seems like it can.

Last month, we saw the news that happiness does increase with more money, and apparently there is no set limit to this.

At least within the sub $500K income a year range (so relevant to more than 99% of people on earth).

I was one of those people that had heard the prevailing theory that there was a limit to how much money can add to your happiness. The limit apparently was set at $75k per year based on a 2010 study.

Any more and you would not see any improvement in your happiness. And to be honest, it seems to make sense.

Despite the “cost of living crisis” in recent years, and ever rising inflation, I feel we still have it pretty good if you are earning somewhere around that amount each year (adjusted for inflation).

Travelling within Europe, a Netflix subscription, weekly meals out, etcetera, can be done on that budget.

SO WHAT CHANGED?

The answer is a bit complicated.

Essentially what the original study suggested was that happiness increased with income but plateaued at $75K.

The new study says there is no evidence of a limit, but there are certain variables that may affect how much more money can make you happier.

For most people happiness tends to increase linearly with income.

For an “unhappy” set of already rich people, more money does not bring more happiness beyond $100K.

For another “happier” group, more money actually accelerates happiness beyond $100K.

What changed was the methodology used to assess happiness, which can be read all about in this article.

WHAT DOES CHAD THINK?

The answer is simple. Play it safe and make more money if it makes you happy.

It’s better to find out that you need less to be (or stay) happy than more. Also, if you have the passion and ability to do what you enjoy and make more money along the way, why not do it?

It seems like a win-win to me.

But don’t forget what your ultimate goals are in life, beyond making money. Money is just a tool to help you achieve those goals, not necessarily and end in itself.

I will also quote one of our favourite Chads, legendary hedge fund manager Ray Dalio.

Billionaire Dalio summed it up in this video saying: “Have the best life possible and seek the clarity to know what that is.”

SO, HOW DO YOU MAKE MORE MONEY?

There are many ways to make money, but they all come down to one thing: creating value (real or perceived).

Whether you are in a high paying career, starting a side hustle, or building the next Meta, you are making something that someone (not necessarily everyone) values.

If you can enjoy it while doing it, even better.

We can probably write a lot more than one paragraph on this subject, and we certainly will so keep reading the City Chad newsletter to find out more!

NEWS: “YOU ARE POOR, ACCEPT IT“ (BofE Economist)

What we thought was a belated April fool’s news story turned out to be the real thing.

Mark Pill, a Bank of England economist, has urged people to accept that they are poorer, and not ask for salary increases “otherwise prices will continue to rise”.

With inflation running at over 10% in the UK, our friends the Brits are not having the best time at the moment.

In fact, most people in the world are suffering from the effects of inflation and this is no laughing matter, as it can have serious consequences on peoples’ livelihoods.

What first seemed a bit of British humour, may actually have some credence to it, though.

What Mr Pill argues is that higher prices are leading to workers asking for higher wages, which in turn leads to businesses having to raise prices to pay for those wages, leading to more inflation.

This can indeed be a factor, but also other ones are at play.

Massive monetary expansion (i.e. money printing) during COVID, and rising energy prices due to the Ukraine war have added to ever rising inflation.

Mr Pill’s comments could have been seen as a Chad move. But really, they seem tone deaf.

The market will pay for labour at the rate it deems it is worth, goodwill from workers is not normally part of the equation.

TRAVEL DESTINATION: RIGA

We spent this week exploring Riga.

Famed for being an amazing city break destination, we found out there is a lot more to it than the legendary nightlife.

The city centre is small and easy to walk around, with beautiful cobbled streets, architecture, food and people from all over the world.

The park and river surrounding the old town entrance add an air of tranquillity right in the middle of the action.

Despite just being Spring, the weather was amazing, sunny every day (we got lucky it seems given it was snowing just a few weeks earlier!).

It’s not the high season for tourists yet, so we got to enjoy a moderate level of busyness, and a more quiet trip.

Would certainly recommend it before the hoards of stag do’s arrive in Summer!

• Stay: The city is small and transport by taxi is relatively cheap so most places should be suitable. However, I’d recommend staying close to the Old town as that is where most things happen. We didn’t love our Airbnb, so book early to find something you like.

• Work: There are plenty of options with great WiFi, we tried Innocent Café and loved it.

• Stay Fit: Run and workout in the beautiful Bastejkalna Park, along the canal surrounding the Old Town.

• Eat: For your daily needs, there is an awesome food court at the top of the upscale shopping mall Galerija Centrs. There is a DJ, fancy bar and a cool environment to grab a bite or work.

• Go out: Valhalla, was the go to club, and it got the busiest. The crowd is relatively young, so bear that in mind. For a more sophisticated experience try Skyline Bar.

• Transport: Walk my friend, don’t be lazy, the place is small. Otherwise, use Bolt (Uber was less reliable, had less cars available).

CHAD OF THE WEEK: RAMIT SETHI

Our chosen Chad of the week is Ramit Sethi. We were thrilled to see he now has a new Netflix show called How to Get Rich.

We are big fans of Ramit, as he has been dropping majestic personal finance advise bombs for several years now.

He’s best known as the author of “I Will Teach You to Be Rich”, a New York Times bestseller that aims to help all types of people with their personal finances.

His style is different from other experts because he finds that most financial advice is restrictive and focuses too much on what NOT to buy.

Whereas he firmly believes that money is not only about maths, but also about psychology.

Well done Ramit, we are glad to see you continue making waves!

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The material on this email and our website is for informational and entertainment purposes only and we make no guarantees as to the accuracy or completeness of its content – it is subject to change. Please conduct your own due diligence and research.

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