Money = Happiness ?
What makes
people happy for the long term? Romance, friendships, good health, puppies, and
kittens.
What doesn't? Money.
You've heard it ad infinitum,
"Money can't buy happiness." Now there's scientific data to give the old saw new
teeth.
University of Southern California economist Richard Easterlin
surveyed 1,500 people over nearly three decades to see what puts a kick in their
step and a smile on their faces. His results, published in September in the
online edition of Proceedings for the National Academy of Sciences (news - web
sites), reveal that time with family and good health are the stuff of
happiness.
Wealth, on the other hand, doesn't necessarily lead to joy
and contentment. One reason: People with more money usually want more things.
More McStuff.
Your Happy-o-meter
Easterlin tested two opposing
theories of happiness:
First, the psychological theory that claims
we're wired with an internal happiness "set point" to which, despite job loss,
divorce, or a torn ACL, we eventually return.
Then there's the economic
theory that an increase in wealth brings an increase of a sense of
well-being.
Guess what? Wrong-o on both counts. Easterlin found that
neither theory was supported by the data. Even though we do need a little
pick-me-up after our newly refinished basement washes down the Potomac in a
hurricane, the emotional turmoil subsides in a short time.
And as for
money curing the blues? Sure, a $1,000 increase in salary lifts the spirits. But
it's more like a caffeine buzz than a higher plateau of
enlightenment.
If we're not wired for a certain level of happiness, and
the annual bonus can't turn our frown upside down, why the heck are we working
so hard?
Pedaling faster -- for what?
One reason we aspire to the
fast track of wealth and power is a phenomenon scientists call the "hedonic
treadmill" -- how the acquisition of commodities and clout provides a short-term
emotional lift that makes us want more. We get a raise, spend it, the extra
dough becomes moot, and we want more.
Been there. Done that. Evidently,
so have 60% of my fellow Americans. The Department of Labor's annual report on
consumer expenditures reveals that just 40% of Americans live below their
before-tax means.
The sad truth is that we're twice as rich as we were
in 1957, but only half as happy. As Dr. David G. Myers, an authority on the
psychology of happiness, wrote in Does Economic Growth Improve Human Morale?:
"Never has a culture experienced such physical comfort combined with such
psychological misery. Never have we felt so free, or had our prisons so
overstuffed. Never have we been so sophisticated about pleasure, or so likely to
suffer broken relationships."
Myers dubbed us "the doubly affluent
society." In nearly 50 years, we have twice as many cars per person, microwave
ovens, plasma screen TVs, home computers, and $200 billion a year spent in
restaurants and bars -- two-and-a-half times our 1960 inflation-adjusted
restaurant spending per person.
Despite air conditioning, TiVo (news -
web sites), low-fat cupcakes, and high-speed Internet access, we're not as happy
as our parents and grandparents.
Bummer.
Even the most
prosperous among us -- the Forbes' 100 wealthiest Americans surveyed by
University of Illinois psychologist Ed Diener -- are just slightly happier than
average.
Those who didn't make the Forbes list are unmoved by our
growing affluence, either. According to Easterlin, the effect on subjective
well-being of a $1,000 increase in income becomes progressively smaller the
higher the initial level of income.
So, the more you make, the less
more money matters.
How to be
happy
What does matter? According to the University of
Chicago's National Opinion Research Center:
1.People with five or more close friends (excluding family members) are 50%
more likely to describe themselves as "very happy" than respondents with
fewer.
2.A loving marriage: 40% of
married American adults report themselves as "very happy," vs. 26% of those who
are not married.
3.Good health.
4.A connection with a
congregation such as your community or a religious group.
On the other hand, a survey of 800 college alumni showed that classmates who
valued high income, job success, and prestige more than close friends and love
were twice as likely to be "fairly" or "very" unhappy.
Happy people, it
seems, concentrate on their own successes and don't compare themselves -- their
income, their family time -- with others. They do not judge others or dwell on
negative feelings. If they do dwell on the better performance of a colleague or
friend, it is to learn ways for self-improvement.
"By far the greatest
predictor of happiness in the literature is intimate relationships," Sonja
Lyubomirsky, a researcher at the University of California-Riverside, told a
Chicago Tribune reporter. "It's definitely not money."
Or, as the
authors of "How to Be Happy, Dammit" say in Life Lesson #40: "It's not 'he who
dies with the most toys wins.' It's 'he who has the most time to play with his
toys and the most fun playing with them who wins.'"
In the end,
happiness is about wanting and managing what you already have. And perhaps
taking that $1,000 raise and treating your loved ones to a special night out.
Millions Will Not Make You Happier
Really. Oprah's magazine says so. And so does Harvard psychologist Daniel Gilbert, who studies such things.
So technically, most of you should be happy. And if you're working for the next big raise, forget it. You're better off working on teaching yourself how to look at your money with a different eye.
I remember when I passed the $100,000 mark. My boss loved my work and gave me a raise that put me at $125,000. But a competitor offered me $140,000 and my boss told me he wouldn't match it. At that point I had no kids, no mortgage and no car payments, so I didn't need the money. But I recognized salary as a gauge of prominence in my field, and although I was making $125,000 I felt underappreciated.
Eventually, I left that job for one that paid more than $200,000 a year, and I lived the aphorism that you have to spend money to make money. I couldn't take high-end clients out to dinner in my wreck of a car, so I leased a BMW. Dressing as well as my clients cost an arm and a leg. And I hired an assistant to manage my personal life since my new position left no time for that.
You might scoff at my choices, but I was not unique among those whose salaries hit six figures: My expenses rose with my salary, and my desires expanded with my bank account. You might think, "That won't happen to me," but you're foolish to assume you would be the exception to the rule.
In fact, the rule is well established in research: The first $40,000 makes a big difference in one's level of happiness. After that, the impact is much smaller. The difference between someone making $40,000 and someone making $15,000 is far greater than the difference between $100,000 and $1 million.
Happiness is dependent on being able to meet basic needs for food, shelter and clothing. After meeting those needs you need to turn to something other than consumerism because additional money has negligible impact on how happy you are. Your level of happiness is largely dependent on your outlook.
Maybe you're thinking there's another magic threshold beyond $40,000. Like maybe $40 million. But you're wrong. When I ran in circles of venture capitalists, there was a common phrase, "It's not jet money." Which was a way of saying, it was a good deal, but it wouldn't earn enough money to pay for a private jet. No matter what size the pile of money, there's always a way to see it as small.
So for those of you looking for more happiness, realize that a new job or a new home won't be nearly as rewarding as a new outlook. Optimism makes people happy. Raising your standing on the optimism scale will impact your happiness more than raising your worth on the pay scale.
Here's a 10-second test to figure out how optimistic you are:
Think of something really bad that has happened to you. Do you think:
1.
It has made me a better person.
2. I made some mistakes, but bad things
happen to everyone sometimes.
3. Nothing ever goes right for me.
Think of something really good that happened to you. Do you think:
1. I am
good at creating my own success.
2. I got lucky.
3. In the end it didn't
turn out to be that great a thing.
If you chose the first answer both times, then you probably already feel pretty happy regardless of your income. If you didn't answer "one" both times, then a shift in the way you think could dramatically improve your happiness.
The good news is that you can train yourself to think positively. Watch how happy people behave. The cliché about gaining strength through adversity might annoy you, but happy people live by those words.
If you took the test above and picked the third answer both times, you probably blame your life on external things so that you don't have to take responsibility for your plight. Happy people take responsibility for their success and consider failure a temporary fluke. To change your thinking, start assuming responsibility for your emotions.
If you chose the number two answers, you probably tell yourself, "I'm not happy, but I don't know why." Start believing that if you take action, good things will happen. Tell yourself good things happen because you expect good things and bad things happen to make you stronger.
Maybe you're thinking, "Forget it. I don't believe any of this works. And I can't do it anyway." But that's part of your problem, isn't it?
Money Can't Buy Happiness, Security
Either
Not rich? Thank your lucky stars.
The rich
have a better-than-even chance of being unhappy, according to a recent study of
affluent households by PNC Advisors, a Pittsburgh-based firm that advises the
wealthy.
What's more, the well-heeled don't think they have enough money
to feel truly secure.
More than half of the 792 adults surveyed — about
500 of whom have invested assets of more than $1 million — said more wealth
didn't bring more happiness. In fact, almost one-third of those with assets
exceeding $10 million said money brought more problems than it solved.
A
third also said that having enough money was a constant worry. They'd be more
secure, said respondents in all wealth categories, if only they had twice as
much.
"The more we have, the more we spend, the more we want," said
Judith Martindale, a San Luis Obispo financial planner and
millionaire.
Unsatisfied with her mountain of material wealth, Martindale
went to a Zen retreat near Carmel — 90 days without heat or electricity — where
she mulled over what mattered.
"What I learned is that the material
things that I have are not as related to my happiness as I once believed," she
said. "I can be happy with much less stuff."
By the way, having money
doesn't mean you'll worry less about retirement security. One-fifth of those
with assets of $1 million to $10 million said they weren't sure they had enough
to maintain the lifestyles to which they've become accustomed.
"No matter
how much you have," said Tim Kochis, a San Francisco-based financial planner,
"there's always someone with more."
Remember: True
wealth is not about money. True wealth is about relationships, about good
health, and about continued self-improvement.
