Rich people are likely to find more happiness scuba-diving or going to a concert than buying that Ferrari, global investors were told recently.
According to what many in financial circles will regard a heretical piece of research by Dresdner Kleinwort Wasserstein, materialistic goals may even cause dissatisfaction with life and mental disorders such as paranoia.
The report by James Montier, DrKW global equity strategist, comes a year after he shocked clients with a note that started with another jaw-dropping suggestion -- money and happiness shouldn't be equated.
Building on the theme, he said last week that there was a mass of evidence to suggest that spending on experiences, such as walking the Machu Picchu trail in Peru, rather than possessions, seemed to make people happier, provided their basic needs were satisfied. This notion applied to people once they were earning more than $25,000. "This doesn't mean you have to give your wordly possessions away, although there may be a lot to say for this," he told clients.
Explaining the benefits of experiences over possessions, he said they tended to be unique, whereas a house or car is likely to become the norm very quickly.
He urged readers to avoid a keep-up-with-the-Joneses syndrome. However, other experts believe that is a pipe dream. "Human beings have to look over their shoulder before they decide how happy they feel," said Andrew Oswald, professor of economics at Warwick University.
(under syndication arrangement with FE)