Can money buy happiness?
More than a decade ago, Nobel Prize-winners Daniel Kahneman and Angus Deaton decided to tackle that question.
They studied the results of a 2008-2009 survey of 450,000 Americans (i.e., the Gallup-Healthways Well-Being Index).
Kahneman and Deaton observed that the more people earned, the more inclined they were to report being happy—up until their income hit the $75,000 mark.
At that point, something interesting happened. Higher incomes were no longer cited as a reason for personal happiness. If respondents reported being happier, it was due to other factors.
Based on this research, Kahneman and Deaton concluded in 2010 that the price of happiness must be $75,000.
However, a more recent study by another Nobel Prize-winning economist has concluded that the “price of happiness” in 2023 has risen to $500,000. (Apparently even happiness is subject to inflation!)
Perhaps you’re frowning as you read this. You’re wondering, “Can a simple survey really measure something as ephemeral as ‘happiness’?”
I share your skepticism. My delicious diet of ice cream treats and cheeseburgers—the food that makes me so happy in the short-term—is not likely to fill me with joy in the long-term.
Happiness is fickle and hard to quantify.
If anything, I think all this research by all these Nobel Prize-winners just proves that when our basic needs for food, housing, healthcare, clothing, and transportation are met, we’re spared a certain level of stress.
Above that, some extra luxuries can make us really comfortable in our day-to-day lives.
Beyond that, money simply can’t deliver ultimate satisfaction.
I’ve never won a Nobel Prize (not yet, anyway). But over the years I have talked with people of various ages and income brackets.
Here’s what I’ve observed:
- People with enough money to take care of all their basic needs…AND deep meaning in life are, by and large, the happiest people.
- People without adequate resources and a strong sense of purpose are the most miserable.
- People who have money, but no sense of meaning seem to experience low grade dissatisfaction in life. And when they can’t put their finger on the problem, they often focus on getting more money, which brings them (surprise!) no additional happiness.
- People with few financial resources, but a strong sense of purpose, struggle with the day-to-day circumstances of life—but still have a high overall satisfaction level.
Again, it’s the people with adequate resources AND a higher purpose who are the happiest of all.
So, let’s make this practical.
Suppose you were offered two jobs. One position comes with your dream salary—but it involves work you’d find tedious at best, miserable at worst.
The other is actually your dream job. You’d love the work, but the pay is just barely adequate.
What would you choose? Job satisfaction or economic security?
Think hard before you sell your soul for a fat paycheck.
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