We all know that money, ultimately, can’t buy happiness. True contentment and fulfillment comes from family, community, health, love, purpose … but it’s also true that being broke isn’t much fun either. Surely a billionaire would feel happier, on an average day, than someone who’s really struggling financially. This is a fair assumption, but it’s only true to a point. Let’s look at some research concerning wealth and happiness to try to understand the relationship between the two a little bit better.
(Photo Credit: Mikael Miettinen/Flickr)
Here are some points to consider:
1. How people spend their money is really important in terms of how happy they are.
Researchers have found that people often misjudge the long-term value of their investments, in terms of the happiness they’ll provide. We might think that spending money on a tangible item will bring us more happiness than spending it on an event or activity. After all, an experience (whether it be a trip to the movies, a concert, or a vacation) is fleeting, whereas physical items can be enjoyed forever. However, just the opposite is true. We adapt to new belongings; we actually get used to them pretty quickly. But, it turns out that events and experiences meet psychological needs and are fulfilling on deeper, more far-reaching, levels.
2. Wealth makes people less likely to enjoy simple pleasures.
Sometimes, it’s the little things that make the biggest difference in our lives: an afternoon at the beach, a nice dinner at a favorite restaurant, a trip to a museum. However, research suggests that wealth often means that people don’t enjoy these simple pleasures as much as other people, because they’ve grown used to them. If you eat in fancy restaurants all the time, ordering a pizza in might not do much for your happiness. Life is made up of simple pleasures; extraordinary experiences, by definition, are rare. It turns out that wealth might actually make it harder, not easier, to find joy in the little things. We tend to value and appreciate what’s scarce.
3. Once basic needs are met, a higher salary doesn’t matter much in terms of our overall happiness.
Research from Nobel Prize winner Angus Deaton found that once basic needs are met, money doesn’t do much to make folks happier on a day to day basis. Apparently, after an annual salary of about $75,000 is obtained ($82,500 in today’s dollars) an individual’s happiness essentially plateaus. However, something that Deaton calls “life assessment” (“the thoughts people have about their life when they think about it”) does still increase, even after the $75,000 benchmark is reached, but this has very little to do with overall day-in, day-out happiness.
So, in the end, there is much more to happiness than how much money we earn. Actually, once our basic needs are met, higher salaries don’t do very much for us at all. Remembering to appreciate the little things, and spending quality time with loved ones is likely to be more fulfilling than a six-figure salary.
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