Nothing left to lose

Oh, how I love the songs of the sixties! Me and Bobby McGee was written by Kris Kristofferson and Fred Foster and originally recorded by Roger Miller in 1969. The version I remember dancing to and singing with the "windows rolled down" hit the top of the charts in 1971 and was recorded by Janis Joplin, shortly before her death in 1970. It contained the lines:

Freedom's just another word for nothing left to lose
Nothing, I mean nothing honey, if it ain't free

These lines haunt me. I always wonder if the writers were trying to say that we are only free, if we don't have possessions to worry about. Yet, many people want more possessions, money, or whatever. I am not immune to these motivations but I do think about these lines during this time of year, when we celebrate our freedom on Independence Day.

On Independence Day, one of my high school friends posted the following question on Facebook: How do you define freedom?

These were some of the responses:
A fellow classmate, alumnus from Liberty High School: "Liberty"
An older alumnus of LHS, a doctor: "Liberty and Property"
Female:<http://www.facebook.com/lizcarrico2> "The ability/right to jump in the car and travel where one wishes, to speak one's mind and live one's live (sic) without hindrence (sic) from the government. Bearing in mind, of course, the rights of others."
Brother of the questioner: "As (our) forefathers said, "Life, liberty and the pursuit of happiness and I would add a good round of golf!"
Me: "Ability to act to make a difference in one's life or the lives of others."

This got me to thinking about the relationship between money and freedom and the effect they have on our happiness. Fortunately, my Google search led me to an academic article published in May 2011 by two professors from Victoria University of Wellington, published in the Journal of Personality and Social Psychology (Volume 101:1), a publication of the American Psychological Association. Professors Fischer and Boer concluded the following from their study of sixty-three countries spanning nearly forty years of information.
When wealth and individualism are traits used to separately predict anxiety, without controlling for the other trait:

· Greater wealth is, indeed, associated with lower levels of anxiety, until the greatest levels of wealth - where anxiety begins to increase. These increases in anxiety were lesser in the wealthiest societies.

· Greater individualism (i.e., freedom) showed an overall decrease in levels of anxiety, while the highest levels of autonomy were observed to have a slight increase in anxiety.
When wealth and individualism are controlled to see the independent effect of both, while controlling for the other:

· Only greater individualism continued to be significantly associated with reduced anxiety, while the effect of greater wealth seems to be "mediated by individualism".

· Among the poorest countries, there was no "discernible relationship between wealth and trait anxiety". While among the wealthiest countries, increases in average incomes were associated with less anxiety.
So, what is the take-away message? It is clear that freedom is very important to life satisfaction and lowered levels of anxiety - more important than the effect of wealth. It is interesting that they found, for wealthier countries, greater life satisfaction for those with higher incomes. Since greater income is a pretty good proxy for work effort and economic productivity, the result could be taken to mean that those who are working hard to make a difference in their lives are happier, as well as making a larger contribution to the product of the country. Freedom, therefore, is more than just "nothing left to lose". Freedom is the most important ingredient for happiness. Working for financial success just makes it that much better and, if you care, you can even afford a good round of golf!

If you have questions or ideas to share post them on our blog: http://mufinancialtip.blogspot.com/ .

ps: My computer is on the fritz, so I'm writing this from a spare one. I can't seem to find the delay-delivery option. Thus, you will be receiving this shortly, rather than the customary 5:00am! I'd rather my computer not be on the fritz!