A couple of years ago, I became friends with a guy named Mauro. One day he said, “Andrew, I know you built wealth. But you sacrificed so much. Do you ever regret not having any fun while you did it?” For a few seconds, I was tongue-tied. As far as I could see, I hadn’t sacrificed a thing.

I enjoyed camping with friends and family. I traveled as much as I could. In my early 30s, I took a year off work to explore Mexico, Morocco, Spain, Portugal and the United States. I didn’t understand how he defined sacrifice. But then it dawned on me.

Many people say we need to defer gratification if we want to build wealth. Mauro defined gratification as the acquisition of stuff. I didn’t buy many things, saving money to invest instead. I never bought a new car, preferring to buy used. I never bought expensive clothes or pricey shoes. I didn’t spend my hard-earned money on a big screen TV or a fancy stereo system. I’ve never purchased a new iPhone. I enjoyed living in simple places instead of paying high rent.

My expenses were low, so I was able to invest. But I didn’t defer gratification. I believe true gratification is defined as happiness.

When we buy something new, it creates a sugar-like high. But the high doesn’t last. And much like a drug (or sugar) it requires further feeding. This is based on something called the “hedonic treadmill.” For example, buying a new iPhone might bring a quick high. But before long, our thrill runs dry. It soon becomes, well…just another phone. It isn’t long before we’re pining for the next new thing. Meanwhile, our overall happiness hasn’t budged a bit.

According to University of British Columbia professor Elizabeth Dunn and Harvard professor, Michael Norton, the same rule applies when we buy a new car or upgrade our homes. In Happy Money: The Science of Happier Spending, they reveal that levels of happiness don’t increase as a result of purchases or upgrades.

But spending money on experiences (especially with loved ones) boosts happiness. This becomes clear when we consider our own mortality. Imagine languishing in a hospital bed. You have two weeks to live. A divine being floats above you. “I have to remove one memory,” she says. “I can remove the memory of the best holiday you enjoyed with your children, or I can remove the memory of the best car you ever bought.” It doesn’t take a genius to know which you would delete. Memories based on relationships trump material acquisitions.

Tragically, however, we don’t always recognize this in our day-to-day living. We’re often blinded by a culture that wants to buy now and pay later. When doing so, we often borrow money to purchase things. In 2002, the University of Nottingham’s Sarah Bridges and Richard Disney published “Debt and Depression.” They found a strong correlation between debt and unhappiness. As a result, we often purchase things to increase our happiness. But it has the opposite effect.

Tal Ben-Shahar taught one of Harvard’s most popular courses: “Positive Psychology.” He provides several tips for increasing happiness. None of them instructs people to buy more things:

  1. Give yourself permission to be human: Accept your emotions, including fear, sadness, and anxiety.
  2. Simplify your life. Focus on one thing at a time and reduce multitasking.
  3. Find meaning and pleasure. Engage in goals you want to achieve instead of what you feel obligated to do. Spend two hours per week on hobbies. Spend time with our loved ones.
  4. Focus on the positive and be grateful. Each day, write down five things for which you’re grateful.
  5. Increase the effort you put into your relationships. Go on a date with your significant other or spend more time talking to your children.
  6. Practice mind-body connections through exercise, meditation, yoga and breathing techniques.

When we choose not to buy something, we can build wealth. But by choosing not to buy, we aren’t deferring gratification. We only defer gratification when we ignore the tips above. That’s why frugality can lead to a happier life. When we focus less on what we buy, we can focus more on the things that matter more: simplicity, relationships, loved ones, mindfulness and exercise. If we grow wealthy as a result of buying fewer things, and investing more money, that’s a pleasant bonus.

Andrew Hallam is a Digital Nomad. He’s the author of the bestseller Millionaire Teacher and Millionaire Expat: How To Build Wealth Living Overseas