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you've all heard the phrase
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money won't buy happiness
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and it turns out it's true
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research by psychologist and sociologist
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and economist shows that while the
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absence of money poverty makes people
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miserable
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once their basic needs are met
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additional money does not translate into
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higher levels of satisfaction
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now at this point many of you are
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thinking
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put me in that study
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i mean you're thinking you flood my life
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with cash i'll get back to you on
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whether i'm happy or not
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well strangely that study's been done a
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few times there's a number of
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researchers who've looked at lottery
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winners and what they find is
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immediately after somebody wins the
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lottery they're happy they're ecstatic
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one year later they're only slightly
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happier than the average person okay
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the question i've been asking over the
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last 20
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or so years is
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why
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it sure feels like money should make us
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happy
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why doesn't it okay and i think there's
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a variety of reasons
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but one of the key reasons has to do
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with expectations
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our satisfaction depends on expectations
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basically
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for any kind of material possession or
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income or status
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when we have more than we expected
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we're happy
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when we have less than we expected we're
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unhappy when we get what we expect we're
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just kind of comfortable now that's not
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the reason money won't buy happiness the
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reason money won't buy happiness is our
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expectations escalate and once they do
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they don't easily de-escalate some
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people call that a ratchet effect you
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know what a ratchet wrench is it's one
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of those wrenches you put on top of the
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bolt and it clicks one way and you pull
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against it the other
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there's a ratchet in our expectations
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uh let me give you some examples i think
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it's best to illustrate it
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i think about that first car you were
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ever able to drive for me it was a
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1962 volkswagen beetle
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and all that car had to do was get me
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away from my parents house and i was
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happy with it and i polished the rust on
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it and
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it
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and it was great
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until i rode in my friend johnny meyer
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he had a 1968 volkswagen beetle and his
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car started on a regular basis
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and it had heat
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and as soon as i got in johnny's car i'm
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like you know what my 62 volkswagen's
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not maybe the greatest thing ever maybe
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i need a little nicer car
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and
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then of course i had chance to ride with
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other friends and you know the pinnacle
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from a high school kid in the 70s was
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another friend who had a trans am you
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know like the that big bird on the front
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and if you ride in a trans am there's no
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going back to a volkswagen
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and that's the problem
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of escalating expectations now
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maybe cars aren't your thing let me show
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you another example a few years ago uh
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we went up to i took a group of students
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and we went up to lake minnetonka now
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lake minnetonka is this gorgeous lake
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west of the twin cities and it's home to
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rich people and celebrities and record
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producers and regular folks it's a great
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place
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and uh
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that we all went up there we rented a
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boat we drove down the way a little bit
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we saw this first place and
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i thought wow wouldn't it be great if i
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could have a cabin on lake minnetonka
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i'd come up here any weekend i want and
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i and i got to have a a dock i got to
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have the and there's i think if you look
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closely there might even be a there's a
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grill there that's all i need if you
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give me this cabin the stock this grill
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i will be perfectly happy i will not
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need more okay
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well we float a little further
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and i'm like oh wait
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i think i would rather have a house with
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you know a roof that's been redone so i
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don't have to fool around with that and
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look it's got windows that are solid and
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oh it's got a chris craft an old antique
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inboard and if you're going to be on
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schmancy lake minnetonka that would be a
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very cool boat to have and it's got
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adirondack chairs i need those
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and then i'm thinking well that first
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place i looked at wasn't so great this
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is what i need
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until
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i see this
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and my thought is all right
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a brand new place not very big
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made of bricks and then a great big dock
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so i could have a boat a giant cabin
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cruiser so that i could spend you know
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the evenings in the in the little cabin
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and the great big cabin cruiser and in
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the dock this would just be great this
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is exactly what i need okay
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this is what it would take to make me
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happy
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well
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here comes the next
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one wait a minute i don't need just a
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cabinet i need to move up here
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i need this big house i need uh you know
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i want to you know be honest to the log
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cabin lodge feel with this uh and that's
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what i need and it's got both the uh the
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outboard the chris craft and i'm gonna
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need a fishing boat and it's got a
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striped yard and i really would like
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that striped yard
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okay
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and i'm happy with that i said wow
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imagine the fun i would have the people
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who would come to visit who would hang
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out here we would have a great time this
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is what it would take to make me happy
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well you can probably guess what's
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coming next
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it's this house here's a
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a brand new house made to look old and
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it is awesome
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now i got to be honest with you you know
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where this is go when these houses are
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getting bigger and they're getting so
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big now that it's hard to get them in
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the full frame
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right so just find a door and that's
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about the height of a person and this
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place is magnificent it's got its own
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swimming area and it's got all the boats
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it's got the cruiser it's got the ranger
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the bass boat it's got jet ski a little
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fleet of jet skis
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and if you look closely
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i think there is like a guest house in
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the back of it
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and uh
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i thought as well that'd be great i
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could have people come visit
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my closest dearest friends and then not
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have to stay in the same house as them
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that's what i want
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this is what would make me happy
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until
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i see this house and i'm like okay i
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don't need anything that looks old i
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want something that's new
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and pretentious
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okay
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and i'm gonna tell you it's pretentious
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because get this it's been torn down so
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that somebody could build a bigger place
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okay
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uh but it's wonderful look at it it's
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beautiful house it's in the better part
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of the lake because apparently it's not
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just living on lake minnetonka it's the
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best neighborhood on lake minnetonka
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it's the cleaner water the deeper water
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there's all this other stuff that
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factors into it and i think
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okay whoever lives there must be
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ecstatic they must love their life how
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happy they must be
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and then
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i see this now
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i can't get it all in the frame it is
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enormous
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it's three full floors if you look
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closely you can see one of those
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umbrellas that they put out over a
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picnic table imagine a person could fit
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under there and there it is it's
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magnificent it's got seven
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smoke stacks and it's got
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certainly guests i'll bet it's called a
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compound and i want a compound
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now think about this
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early in the morning of that day i just
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wanted a little cabin a place i could go
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hang out
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but by later in the day i needed the
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biggest house on lake minnetonka
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i don't know
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15 000 square feet
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there's i think my wife and i could live
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in fifth we could be in separate
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counties
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right they people call each other in
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this house now did your taste escalate
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here's the test
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remember this little place right here
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it would have been the dream cabin with
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just a big boat in the and that house
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well i've been a little bit deceptive
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it's actually the boat house
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for the mansion
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that's where they store inner tubes
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that's the inner tube house
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right
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now
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you can have your taste escalate for
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cars
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and
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and for mansions right uh and i got to
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thinking about this i thought i wonder
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if there's
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is there any product that's not
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aspirational that that you think if i
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just have this next thing then i'll be
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really really happy so what i did is uh
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yesterday morning i just turned on
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television and googled a couple things
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on the youtube channel there and i said
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all right let's just i'm going to search
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under the terms finest or
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nicest or best and
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here's what came up okay uh just just
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from just yesterday
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cars
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tons of cars lots and lots of cars
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not just the finest cars the finest
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rolls royces
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so think about that
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you get enough money to buy a rolls
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royce and suddenly there's a youtube
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video that says you don't have the best
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rolls royce
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you need an even better one
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of course
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there was an unlimited number of houses
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like this and if you think about it
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there is a network channel that's
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dedicated to making you unhappy with the
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current house you live in
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i mean isn't that what happens on house
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and garden tv it just keeps getting
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nicer nice and you think oh gosh my
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ceilings have that popcorn stuff on them
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and apparently
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they hate popcorn ceilings
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and then within the house everything is
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escalating then you can start with a
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little refrigerator then you get the
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sub-zero refrigerant you get the walk-in
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refrigerator you get uh better stoves
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and better ovens even towel bars
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you can get heated towel bars and i made
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fun of that but i bet it's great
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and and i bet it's hard to go back to
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just good old room temperature
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towels once you've had that there's no
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end to the handbags the shoes the
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designer stuff the makeup stuff
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um and i mean no end what's
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i don't know what does nail polish cost
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anybody
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what's a little bottle of nail polish
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cost
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pardon
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eight dollars
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okay eight dollars you know how much you
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can spend on nail polish if you want to
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i'll tell you
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267
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580
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apparently it's got little diamonds in
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it that
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i guess at the end of the day you just
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throw them away because you're that rich
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i even asked the question all right i
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get it for commercial products what
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about like commodities like the two most
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common things in the world are water and
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salt right salt salt of the earth it's
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absolutely everywhere i thought these
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have got to be the things there's no
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aspirational water is there
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uh yeah yes there is
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you can spend uh one thousand one
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hundred dollars on a single bottle of
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water drinking water
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okay nothing else special other than you
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know crystal decander but it's a
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thousand dollars for water okay you've
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got a lot of money if you're spending a
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thousand dollars for water how about
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salt
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uh salt if you get the fancy morton salt
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it's three cents
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uh an ounce okay
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but apparently
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you can buy a special salt that costs
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thirty six dollars an ounce okay
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now unless that's made of salt extracted
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from the tears of elvis
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i can't imagine why it would cost so
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much okay so the message here is there's
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no end to the escalation of our tastes
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if we're trying to find long-term life
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satisfaction from material things from
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status all right so you might ask
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yourself
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is that discouraging
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and the answer is well it kind of
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depends i think the message is both
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discouraging
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and freeing depending on how you think
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about it so you really got a couple
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options
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option number one
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stay on the treadmill try to find
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happiness by buying the next new thing
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getting a job where you make more money
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only to buy a more expensive version of
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the thing only to find a bigger fancier
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job and it just never ends okay you
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could stay on the treadmill but the
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danger is you start leading a lifestyle
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in service
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of this material stuff you take a job
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you don't like because it pays a lot you
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give up your hobbies because you got to
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go make a bunch of money to live with
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fancier things you give up your friends
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you stay away from your family so
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there's a real danger to running on the
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treadmill daniel kahneman the
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psychologist and a nobel laureate calls
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it the satisfaction treadmill because
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you never get to the end to the end of
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it all right
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second
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uh the other alternative is is to
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realize
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that there's only so much you can get
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from money and material possessions you
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know and think of it this way
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money can make you miserable
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but there's no amount of money that'll
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make you happy
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so maybe the goal is to just be
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comfortable
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to seek security not ecstasy
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so what's that mean it means if you're
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living a pretty good life and you're
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pretty comfortable maybe you try to put
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a lid on your expectations realize that
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you've got it good don't try to find too
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much don't sacrifice your the job you
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love and the friends you have just so
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you can have more money so you can have
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nicer things live within your means save
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money
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and invest money so you can weather uh
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the financial storms that might hit your
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life
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and uh be comfortable with it
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okay
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so
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uh to summarize here we go
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there's no amount of money that will
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make you happy there's no amount of
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status that'll make you happy there's no
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there's no jewelry where you'll finally
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get the right piece of jewelry and go
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that's it i have achieved
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nirvana
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it isn't going to happen you won't find
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long-term happiness and the accumulation
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of material
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possessions what you can find with money
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is security you should look for the
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opportunity to not worry about money so
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save enough that you can weather the
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storms stay within your means and you'll
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be happier well you'll certainly be more
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comfortable
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thank you