A lot of people claim that money cannot buy happiness since material things often provide mere "short-term happiness." However, this sort of thinking considers money at a very superficial level. It would be misleading to conclude that money can't buy happiness.

Money offers the freedom of choice. When you have money, you can either choose to buy something, or you can choose not to, regardless of the duration of happiness that item would bring. Lack of money does not give one that freedom; one simply cannot afford that item, whether he would like to purchase it or not. The matter has been decided for him by default.

How many times have you gone to the store, seen a really cool gadget (take the iPod Nano, for example), and said to yourself, I really want that thing, but it's got a price tag of $400. I don't think I can afford it.

Note that this is quite different from the scenario in which you do have the money to buy the iPod, but choose not to. If you think the iPod will not make you happy, well, then don't buy it, not because you cannot afford it but because you don't want to.

To be more extreme, if I were rich, I could still beg for money on the streets with other panhandlers if I want to. But a genuine panhandler does not have the option of travelling twice every year and driving a fancy car; he must panhandle even if it's against his wish.

The importance of money goes beyond merely what you can buy with it. Of course, money is by no means omnipotent. It cannot buy real friends or cure AIDS. However, being rich goes a long way towards eliminating worries that money can solve, and lets you focus your attention on matters outside the money domain. There's a Chinese saying: "you may not be able to accomplish all ten thousand things with money, but without it you wouldn't be able to do anything."

Money gives you the freedom to choose what you want to do and what you don't want to do, and this freedom is one of the main contributors to long-term happiness. In this way, money can buy happiness.