As I watched a segment on Good Morning America today with Warren Buffet’s kids, I was reminded of the classic debate over money.  Does money make you happy?  Buffet’s kids insist that it does not.  They say their dad isn’t happy because he has money, he’s happy because he’s doing what he wants to be doing.  They’re half right in that doing what you want to do is a source of happiness, but the other half of what makes this possible is the fact that you have enough money to be ABLE to do what you want to do. 

For me they lost points in the credibility department however because they have no idea what it’s like to not have money.  They mentioned how they got 75 cents a week for allowance when they were kids, and adjusted for inflation, today this would be $4.75, which is far less than the average $10/week kids get today.  So they contend they actually had less when they were kids than most kids have today.  Please!  They go on to say how their dad put a slot machine in the attic for them and each week they blew their allowance on the slot machine.  Guess they didn’t need that allowance so much after all.

The whole reason the Buffets were on the show today was to comment on their charitable foundations and the announcement that Warren is going to contribute huge sums to Bill Gates’ foundation.  Diane Sawyer was trying to trap them into admitting they are disgruntled with their father for giving so much of his money away rather than giving it to them.  I was so proud of the one who quickly snapped back and told her that having that much money given to them would be rediculous.  They have plenty and each of the kids is spending their time, happily, on their own foundation supporting the needs that mean the most to them.  One of the great Buffetisms that was mentioned was that Warren always wanted the kids to have enough to do whatever they want, but not so much that they would do nothing.

I love this debate because it stirs up all sorts of emotions in people.  Some rich people insist money isn’t what makes them happy.  To admit so would make them appear incredibly shallow I guess.  Some rich people are proud to say money does make them happy.  Some have-nots believe money would make them happy, and effectively say the reason they aren’t happy is because they don’t have enough money.  Other have-nots say that money would never make them happy.  Possibly they’ve accepted their position and have given up the idea of ever having more, or are in denial or guilt of really wanting more but seem to be unable to make it happen.  And of course you have every variation of positions in between, and different circumstances that cause us to take both sides of the fence in different scenarios.

I think money in and of itself is not what makes us happy.  The freedom that money provides for us can lead to some form of happiness.  The freedom to choose how to spend our time and our excess money.  The ability to help people.  The catch is that you need money in order for this to happen.  So back around the circle I go and I have to conclude that money does not make us happy, money enables us to do whatever makes us happy. 

So how is any of this relevant to real estate?  Real estate can indeed be the path that takes us to the money that enables us to do whatever we want to do, hence, “financial freedom!”  Just be careful that money isn’t your goal.  If it is, you will disappointed when you get there, if you ever do.  What may be holding you back is a misdiagnosed goal.  You have to identify the REAL reason that you want the money to uncover your true motivation.  Only when you’ve identified this will you have enough fuel to take you all the way home and will you truly enjoy it once you’re there.