A huge survey of 450,000 individuals found that money only buys happiness to a limited extent. Princeton researchers Daniel Kahneman and Angus Deaton analyzed data collected in 2008 and 2009 for the Gallup-Healthways Well-Being Index and concluded:
(We) ﬁnd that the effects of income on the emotional dimension of well-being satiate fully at an annual income of ∼$75,000.
In other words, when it comes to money, there is a glass ceiling for its ability to bring you happiness. This makes intuitive sense; if you can't afford a decent place to live or enough food to feed your family, more money substantively improves your situation. But few would agree with the statement that the happiest moments of their life was when they had the most money.
The researchers take pains to distinguish between two metrics that are often confused: emotional well-being versus what's called "life evaluation".
Emotional well-being is what they equate with happiness. It involves the emotional experiences you have on a day-to-day basis... being delighted, sad, frustrated, excited, lonely or fascinated.
In contrast, life evaluation is how you think about your life. So if a survey asks you how satisfied you are with your life, it is not measuring happiness, but rather life evaluation.
Here's why this distinction is important: incomes over $75,000 increase life evaluation scores, but do not have the same impact on happiness. Kahneman and Deaton observe:
We conclude that lack of money brings both emotional
misery and low life evaluation; similar results were found for
anger. Beyond ∼$75,000 in the contemporary United States, however, higher income is neither the road to experienced happiness nor the road to the relief of unhappiness or stress.
So where does this leave you?
Well, if you make $30,000 and live in the United States, go for the money. It will help you on both fronts. In other countries the same is true, but the actual number will vary.
If you are lucky enough to earn more than this amount already, you need to ask yourself another question:
Do you want to feel good about your life, or actually feel good?
If you double your salary, say to $150,000, you will probably increase your intellectual assessment of your life. "I've done pretty good for myself," you might think.
But doubling your salary won't necessarily give you more joy, day-to-day. It won't make you more excited by your work or help you feel closer to your friends and family. I recently watched a documentary that featured Green Day frontman Billie Joe Armstrong, in which he talked about how the band's rise to stardom caused them to lose most of their friends and their peer group.
Over $75,000, you face the risk of living your life in the abstract. It can become something you feel good about, instead of something that makes you feel alive, vibrant, and excited.
In truth, I know affluent people who generally fall into two camps. Some people genuinely love what they do, or at the very least find fulfillment in their work. But others take more satisfaction from their standing, power, and money. Members of the latter group often strike me as people who are trying to convince themselves that they are happy, when the sad truth is that happiness escapes them, because more money won't buy them happiness.
Here's the research paper. What do you think? Do you agree or disagree with the researcher's conclusions (or mine)?
P.S. In case you still want more money, here are a few suggestions...