essay about not wealthy but happy

Greater Good Science Center • Magazine • In Action • In Education

Happiness is about Respect, not Riches

Money really can’t buy happiness, research shows . Instead, a new study suggests, those pursuing a happier life would be smart to sharpen their social skills.

In a series of four experiments, researchers found that it is the level of respect and admiration we receive from peers—not overall wealth or success—that more likely predicts happiness. They refer to this level of respect and admiration as our “sociometric status,” as opposed to socioeconomic status (SES).

In one experiment, 80 college students from 14 different student groups rated how much they respected and admired the other people in their group, and how respected and admired they felt themselves; they also answered questions about their family’s income and their own level of happiness.

The results, published in the journal Psychological Science , show that people with higher sociometric status reported greater happiness, whereas their socioeconomic status was not linked to their happiness.

In a similar experiment, more than 300 people answered questions about the respect and admiration they received within their friends, family, and work circles. They also reported their personal sense of power in those social circles, and how liked and accepted they felt, along with their income and happiness.

Again, people of high sociometric status were much more likely to be happy than were people of high SES. Through their data analysis, the researchers also found that these people were happier because they felt a greater sense of power and acceptance within their groups.

“Where people stand in their local hierarchy matters to their happiness,” they write.

But does feeling respected and admired actually cause people to be feel happier—or could it be that people admire peers who project happiness?

The researchers addressed that question in two additional experiments. In one, they manipulated people’s sense of status by asking them to compare themselves to people who were much more or much less respected and admired than they were. Other participants had to compare themselves to people who had much more or much less wealth, education, and professional success. Then all participants had to think about how their “similarities and differences” might come into play if they were to interact with these imaginary others.

In this case, people temporarily made to feel like they were of higher sociometric status were happier than people made to feel like they were of lower sociometric status, regardless of their actual status outside of the experiment. By contrast, people made to feel like they had high socioeconomic status were not happier than people made to feel like they had low SES. The results strongly suggest that feeling respected and admired can actually cause our happiness to increase, whereas feeling wealthy (without also feeling respected) doesn’t carry the same effect.

In the final part of the study, the researchers tracked 156 MBA students, following them from shortly before their business school graduation through nine months after graduation. For many of these students, their graduation brought a change in sociometric status—someone admired on campus, for instance, could be disrespected at their post-graduate job, even if their income went up.

The results show that as the students’ sociometric status rose or fell, their happiness level rose or fell accordingly; in fact, changes to their sociometric status were much more strongly linked to happiness than were changes to their socioeconomic status.

The findings echo past research finding that income has surprisingly little effect on happiness, says Cameron Anderson, a professor at the University of Calfiornia, Berkeley’s Haas School of Business and the lead author of the study.

Instead, Anderson and his colleagues’ research suggests that what really matters is the respect, admiration, and feelings of power we get from others within our face-to-face groups.

“You don’t have to be rich to be happy, but instead be a valuable contributing member to your groups,” says Anderson. “What makes a person high in status in a group is being engaged, generous with others, and making self sacrifices for the greater good.”

About the Author

Stacey kennelly.

Stacey Kennelly is a Greater Good editorial assistant.

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Money only buys an illusion that we perceive to be Happiness.  As long as one is content with what they have, true happiness will exist. The moment desires come in, happiness goes out.

Praveen Kumar | 4:29 am, July 14, 2012 | Link

Yes. Respect makes us happy because:

(1) Respect comes from a person who has done or will do things good for his or her symbiotic group, and the group members reciprocate. (2) Happiness comes from a person who has just done or will do a-step-better for keeping his or her DNA alive.

(3) The being respected, or being helped by symbiotic members, is easier to do the a-step- better than not being respected. Hence, they feel happy relatively.

(See W. Ying; “Be Happy Validly!” p. 3-4, 24-26; CreateSpace, Amazon, 2012)

W. Ying | 9:27 pm, July 16, 2012 | Link

Money doesn’t buy happiness; it only buys stuff. People pursue money thinking that by having more stuff they become more. In reality, having more never makes you more, but “takes” you more. Once you buy something, it takes more money to use it, insure it, maintain it, clean it, move it, fix it, store it, and eventually, sell it or spend money trying to get rid of it. People don’t respect you for having “more.” They are envious and jealous. They may even think that you got more by being dishonest. Some even want to see you lose that “more” or take it away from you. You need to strive to “become” more - not have more. People respect people who have contributed to the world in a positive manner and who became more doing it. If service-to-others and contribution to the world is what drives you, you find that not only do you find happiness and gain respect in life, but monetary rewards fall into your lap without you chasing them. The greed-driven desire to acquire more than you need or deserve is a mental illness.

Ray Holley | 3:13 pm, August 8, 2012 | Link

Ray - Good comment, but I’m afraid your notion that contributing to the world and serving others will not just bring respect and happiness but also cause money to “fall into your lap” is a tad naive.

The plutocratic elite that exerts increasing dominance over our society would love us to subscribe to the proposition that rich people got that way by contributing more to society. In reality, it is difficult to justify why a corporate CEO should receive several hundred times the compensation of his average employee or why financial speculators on Wall Street, who actually do a great deal of harm, should be among the highest paid humans of all time. Meanwhile, teachers, social workers, elder care aides etc. struggle on wages that make a decent life very difficult. In short, the equation between monetary rewards and contribution to society is completely bogus.

Unfortunately, in the United States at least, respect seems to be flowing rather too easily to people with money, whether or not they really “deserve” it. Indeed, as the recent fracas about Mitt Romney’s tax returns reveals, we are not allowed to question “success” at all.

The kind of ethos suggested by this article will not become widespread without an across-the-board re-evaluation of what society should actually value.

Higher Plane | 6:29 pm, August 13, 2012 | Link

Higher Plane… Great response and appreciated. Upon reflection, the money vs. service-to-others life choices are hard to articulate because they are so different. Explanations on either side may seem very foreign to the other side. The environment you grew up in also has much to do with your choices and priorities as you get older.

Monetary rewards are also relative according to your past frame of reference. If you had a job where you made $100,000 a month and now you make $10,000, then do you consider yourself a failure? Or, do you look at the wealth you manifest for yourself as a direct result of your true value to the marketplace and the world at a point in time?

People’s idea of attracting wealth (by the way, I loved your review of “The Secret” at your web site) is usually based on getting the most for doing the least. That’s why so many fall for get-rich-quick MLM scams or Ponzi schemes. Thinking about a BMW in your driveway and only getting a used Corolla is more of a reflection of your relationship to abundance and not “thinking positive.”

If you have to sum up in one word why people don’t have all kinds of abundance in their lives it’s “complacency.” People are lazy. They don’t want to take the time or effort it takes to actually change themselves or the situation they find themselves in. They want the party they’ve been attending over the last few decades to never end. Guess what? It’s over.

People who are complacent remain stuck making the same decisions over and over that got them into complacency in the first place. Unfortunately, the Complacent Group is the group who are not wealthy nor do they contribute to society in a meaningful way. And, this group is enormous and waiting for someone else to take care of them or lead them to their next “quick fix” of money or sell them the next Self-Help book. It’s called “self-help” for a reason. Complacency only leads to regret.

As a solution for complacency, corruption and inequities in the world, I would offer this…everyone stop lying and start telling the truth to each other in all things. As Utopian as it sounds, I believe people would feel a lot wealthier in their lives.

Ray Holley | 1:49 pm, August 14, 2012 | Link

If one has lots of money and be charitable at the same time, he/she can be happy too. Though money may not be the direct cause of such happiness, it is the indirect outcome.

<a href="http://propertylaunchlist.com">Denn | 9:30 pm, October 10, 2012 | Link

The Reason Many Ultrarich People Aren’t Satisfied With Their Wealth

At a certain point, another million dollars doesn’t make anything newly affordable. That’s when other motivations take over.

As the number of millionaires and billionaires in the world climbs ever higher , there are a growing number of people who possess more money than they could ever reasonably spend on even the lushest goods.

But at a certain level of wealth, the next million isn’t going to suddenly revolutionize their lifestyle. What drives people, once they’ve reached that point, to keep pursuing more?

There are some good explanations, I found, after talking to a few people who’ve spent significant amounts of time in the presence of and/or researching the really, really rich. Michael Norton, a Harvard Business School professor who has studied the connections between happiness and wealth, had a particularly elegant model for understanding this pattern of behavior.

Norton says that research regularly points to two central questions that people ask themselves when determining whether they’re satisfied with something in their life: Am I doing better than I was before? and Am I doing better than other people? This applies to wealth, but also to attractiveness, height, and other things that people fret about.

“But the problem is,” Norton says, “a lot of the things that really matter in life are hard to measure. So if you wanted to be a good parent, it’s a little hard to know if you’re being a better parent now than you were a year ago, and it’s also hard to know if you’re a better parent than the neighbors.”

So people turn to dimensions of comparison that can be quantified. “Money is a terrific one,” Norton says. “If I need to know if I’m doing better than I was, the easy thing to ask is, Am I making more money? or Does my house have more square feet? or Do I have more houses than I used to? ”

[ Read: The 9.9 percent is the new American aristocracy. ]

This instinct to measure and compare doesn’t disappear once people have an obscene amount of money. “The problem is, Am I doing better than I was? is only [moving people in] one direction, which is up,” Norton says. And if a family amasses, say, $50 million but upgrades to a neighborhood where everyone has that much money (or more), they feel a lot less rich than if they had stuck to the peer comparisons they were making tens of millions of dollars ago. Hence the ever-shifting goalposts of wealth and satisfaction.

The research Norton has conducted illustrating this phenomenon is dispiriting. In a paper published earlier this year , he and his collaborators asked more than 2,000 people who have a net worth of at least $1 million (including many whose wealth far exceeded that threshold) how happy they were on a scale of one to 10, and then how much more money they would need to get to 10. “All the way up the income-wealth spectrum,” Norton told me, “basically everyone says [they’d need] two or three times as much” to be perfectly happy.

Where did Norton find his rich people? For that particular study, an investment bank connected him with some of its high-net-worth clients. But Norton also told me that he had previously consulted with a pool of Dutch millionaires willing to respond to researchers’ questions, making themselves marginally richer in the process: For one study, Norton and his collaborator paid each respondent about 46 euros for every completed questionnaire. “You can run a survey on regular people for like a dollar,” he says.

Jeffrey Winters, a professor of political science at Northwestern University and the author of Oligarchy , said that in addition to social comparison, really rich people are often motivated to acquire more money by the thrill that comes with multiplying one’s fortune by making investments, buying up businesses, and so forth. “For those of us who make wages and have expenditures that we are trying to meet—a mortgage, pay our health insurance, food, whatever happens to be our kid’s tuition—we link the making of money to our expenses,” he says. Meanwhile, many ultra-wealthy people “use their money to make money,” he says—an exciting, status-enhancing process.

Those two ways of putting money to use—as a way of covering expenses or as a way of building a bigger fortune—come with two different points of diminishing returns. “Say you wanted to have a mega-yacht plus six mansions in six different locations around the world,” Winters says. “You could probably do all of that fairly comfortably with a few hundred million dollars.” It’s different if the goal is to keep accumulating, in which case “there’s no number at which you have enough,” Winters says. He adds, “Every billionaire I’ve spoken to, and I’ve spoken to quite a number of them, is extremely excited by each additional increment of money they make.”

Another expert I consulted, Brooke Harrington, a professor at the Copenhagen Business School who has studied and written about the financial practices of the super-wealthy , says that the question many rich people ask themselves about their money is not Do I have enough to buy this expensive thing I want? but rather Do I have as much or more than these people I’m comparing myself with?

“The sensation of ‘being well-off,’” she wrote to me in an email, “is not about fulfilling a childhood dream of buying a sailboat or something; feeling wealthy is about comparison with others in your reference group. So the question is not what individuals want to buy, but what they feel they must buy in order to keep up their status.”

The novelist Gary Shteyngart also has firsthand experience seeing how rich people think about their wealth. The protagonist of his recent novel, Lake Success , published a few months ago, is a New York financier, and in the course of researching the book, Shteyngart cultivated friendships with more than a dozen highly wealthy, mostly male hedge funders, the sorts of people who say they’re allergic to flying commercial and who hire chief financial officers to manage their family’s abundant wealth. “They’ve reached the point where you have all the money you ever really need for anything, and the things that they can buy are not that expensive compared to what they have,” he told me. “The gull-wing Tesla, the latest Tesla, I don’t know what it [costs], but it’s not that much if you have $100 million.”

One thing Shteyngart noticed after spending time with this crowd was how competitive they were. “They’d compete against one another on their Bloomberg terminals all day and then at the end of the day they would play competitive poker with each other,” he says; this spirit of one-upmanship pervaded even the donations they made to charities. Shteyngart speculates that underneath this competitiveness is a need to seem smarter and more capable than their peers: Managers of hedge funds can sometimes get rich from making one or two bets that had more to do with luck than anything else, which might make them feel like their intelligence is in question even if their money stands as evidence of their professional success.

Shteyngart also witnessed the hedge funders making the sort of social comparisons that Norton and Harrington described, treating money as a “scorecard.” He remembers one of them saying something along the lines of “We don’t have best-seller lists and book awards. What we have is this—the number at the end of the day.”

The whole experience did not leave Shteyngart feeling good. Here were people who could purchase anything they could ever want and whose wealth was widely envied, and even they weren’t content—just as these researchers studying happiness and wealth might have predicted. “At the end of the day,” Shteyngart told me, “I was just happy to end this research, because it was quite depressing.”

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Does More Money Really Make Us More Happy?

• Elizabeth Dunn
• Chris Courtney

A big paycheck won’t necessarily bring you joy

Although some studies show that wealthier people tend to be happier, prioritizing money over time can actually have the opposite effect.

• But even having just a little bit of extra cash in your savings account ($500), can increase your life satisfaction. So how can you keep more cash on hand?
• Ask yourself: What do I buy that isn’t essential for my survival? Is the expense genuinely contributing to my happiness? If the answer to the second question is no, try taking a break from those expenses.
• Other research shows there are specific ways to spend your money to promote happiness, such as spending on experiences, buying time, and investing in others.
• Spending choices that promote happiness are also dependent on individual personalities, and future research may provide more individualized advice to help you get the most happiness from your money.

Where your work meets your life. See more from Ascend here .

How often have you willingly sacrificed your free time to make more money? You’re not alone. But new research suggests that prioritizing money over time may actually undermine our happiness.

• ED Elizabeth Dunn is a professor of psychology at the University of British Columbia and Chief Science Officer of Happy Money, a financial technology company with a mission to help borrowers become savers. She is also co-author of “ Happy Money: The Science of Happier Spending ” with Dr. Michael Norton. Her TED2019 talk on money and happiness was selected as one of the top 10 talks of the year by TED.
• CC Chris Courtney is the VP of Science at Happy Money. He utilizes his background in cognitive neuroscience, human-computer interaction, and machine learning to drive personalization and engagement in products designed to empower people to take control of their financial lives. His team is focused on creating innovative ways to provide more inclusionary financial services, while building tools to promote financial and psychological well-being and success.

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Can Money Really Buy Happiness?

Money and happiness are related—but not in the way you think..

Updated November 10, 2023 | Reviewed by Chloe Williams

• More money is linked to increased happiness, some research shows.
• People who won the lottery have greater life satisfaction, even years later.
• Wealth is not associated with happiness globally; non-material things are more likely to predict wellbeing.
• Money, in and of itself, cannot buy happiness, but it can provide a means to the things we value in life.

Money is a big part of our lives, our identities, and perhaps our well-being. Sometimes, it can feel like your happiness hinges on how much cash is in your bank account. Have you ever thought to yourself, “If only I could increase my salary by 12 percent, I’d feel better”? How about, “I wish I had an inheritance. How easier life would be!” I don’t blame you — I’ve had the same thoughts many times.

But what does psychological research say about the age-old question: Can money really buy happiness? Let’s take a brutally honest exploration of how money and happiness are (and aren’t) related. (Spoiler alert: I’ve got bad news, good news, and lots of caveats.)

Higher earners are generally happier

Over 10 years ago, a study based on Gallup Poll data on 1,000 people made a big headline in the news. It found that people with higher incomes report being happier... but only up to an annual income of $75,000 (equivalent to about $90,000 today). After this point, a high emotional well-being wasn’t directly correlated to more money. This seemed to show that once a persons’ basic (and some “advanced”) needs are comfortably met, more money isn’t necessary for well-being.

But a new 2021 study of over one million participants found that there’s no such thing as an inflection point where more money doesn’t equal more happiness, at least not up to an annual salary of $500,000. In this study, participants’ well-being was measured in more detail. Instead of being asked to remember how well they felt in the past week, month, or year, they were asked how they felt right now in the moment. And based on this real-time assessment, very high earners were feeling great.

Similarly, a Swedish study on lottery winners found that even after years, people who won the lottery had greater life satisfaction, mental health, and were more prepared to face misfortune like divorce , illness, and being alone than regular folks who didn’t win the lottery. It’s almost as if having a pile of money made those things less difficult to cope with for the winners.

Evaluative vs. experienced well-being

At this point, it's important to suss out what researchers actually mean by "happiness." There are two major types of well-being psychologists measure: evaluative and experienced. Evaluative well-being refers to your answer to, “How do you think your life is going?” It’s what you think about your life. Experienced well-being, however, is your answer to, “What emotions are you feeling from day to day, and in what proportions?” It is your actual experience of positive and negative emotions.

In both of these studies — the one that found the happiness curve to flatten after $75,000 and the one that didn't — the researchers were focusing on experienced well-being. That means there's a disagreement in the research about whether day-to-day experiences of positive emotions really increase with higher and higher incomes, without limit. Which study is more accurate? Well, the 2021 study surveyed many more people, so it has the advantage of being more representative. However, there is a big caveat...

Material wealth is not associated with happiness everywhere in the world

If you’re not a very high earner, you may be feeling a bit irritated right now. How unfair that the rest of us can’t even comfort ourselves with the idea that millionaires must be sad in their giant mansions!

But not so fast.

Yes, in the large million-person study, experienced well-being (aka, happiness) did continually increase with higher income. But this study only included people in the United States. It wouldn't be a stretch to say that our culture is quite materialistic, more so than other countries, and income level plays a huge role in our lifestyle.

Another study of Mayan people in a poor, rural region of Yucatan, Mexico, did not find the level of wealth to be related to happiness, which the participants had high levels of overall. Separately, a Gallup World Poll study of people from many countries and cultures also found that, although higher income was associated with higher life evaluation, it was non-material things that predicted experienced well-being (e.g., learning, autonomy, respect, social support).

Earned wealth generates more happiness than inherited wealth

More good news: For those of us with really big dreams of “making it” and striking it rich through talent and hard work, know that the actual process of reaching your dream will not only bring you cash but also happiness. A study of ultra-rich millionaires (net worth of at least $8,000,000) found that those who earned their wealth through work and effort got more of a happiness boost from their money than those who inherited it. So keep dreaming big and reaching for your entrepreneurial goals … as long as you’re not sacrificing your actual well-being in the pursuit.

There are different types of happiness, and wealth is better for some than others

We’ve been talking about “happiness” as if it’s one big thing. But happiness actually has many different components and flavors. Think about all the positive emotions you’ve felt — can we break them down into more specifics? How about:

• Contentment
• Gratefulness

...and that's just a short list.

It turns out that wealth may be associated with some of these categories of “happiness,” specifically self-focused positive emotions such as pride and contentment, whereas less wealthy people have more other-focused positive emotions like love and compassion.

In fact, in the Swedish lottery winners study, people’s feelings about their social well-being (with friends, family, neighbors, and society) were no different between lottery winners and regular people.

Money is a means to the things we value, not happiness itself

One major difference between lottery winners and non-winners, it turns out, is that lottery winners have more spare time. This is the thing that really makes me envious , and I would hypothesize that this is the main reason why lottery winners are more satisfied with their life.

Consider this simply: If we had the financial security to spend time on things we enjoy and value, instead of feeling pressured to generate income all the time, why wouldn’t we be happier?

This is good news. It’s a reminder that money, in and of itself, cannot literally buy happiness. It can buy time and peace of mind. It can buy security and aesthetic experiences, and the ability to be generous to your family and friends. It makes room for other things that are important in life.

In fact, the researchers in that lottery winner study used statistical approaches to benchmark how much happiness winning $100,000 brings in the short-term (less than one year) and long-term (more than five years) compared to other major life events. For better or worse, getting married and having a baby each give a bigger short-term happiness boost than winning money, but in the long run, all three of these events have the same impact.

What does this mean? We make of our wealth and our life what we will. This is especially true for the vast majority of the world made up of people struggling to meet basic needs and to rise out of insecurity. We’ve learned that being rich can boost your life satisfaction and make it easier to have positive emotions, so it’s certainly worth your effort to set goals, work hard, and move towards financial health.

But getting rich is not the only way to be happy. You can still earn health, compassion, community, love, pride, connectedness, and so much more, even if you don’t have a lot of zeros in your bank account. After all, the original definition of “wealth” referred to a person’s holistic wellness in life, which means we all have the potential to be wealthy... in body, mind, and soul.

Kahneman, D., & Deaton, A.. High income improves evaluation of life but not emotional well-being. . Proceedings of the national academy of sciences. 2010.

Killingsworth, M. A. . Experienced well-being rises with income, even above $75,000 per year .. Proceedings of the National Academy of Sciences. 2021.

Lindqvist, E., Östling, R., & Cesarini, D. . Long-run effects of lottery wealth on psychological well-being. . The Review of Economic Studies. 2020.

Guardiola, J., González‐Gómez, F., García‐Rubio, M. A., & Lendechy‐Grajales, Á.. Does higher income equal higher levels of happiness in every society? The case of the Mayan people. . International Journal of Social Welfare. 2013.

Diener, E., Ng, W., Harter, J., & Arora, R. . Wealth and happiness across the world: material prosperity predicts life evaluation, whereas psychosocial prosperity predicts positive feeling. . Journal of personality and social psychology. 2010.

Donnelly, G. E., Zheng, T., Haisley, E., & Norton, M. I.. The amount and source of millionaires’ wealth (moderately) predict their happiness . . Personality and Social Psychology Bulletin. 2018.

Piff, P. K., & Moskowitz, J. P. . Wealth, poverty, and happiness: Social class is differentially associated with positive emotions.. Emotion. 2018.

Jade Wu, Ph.D., is a clinical health psychologist and host of the Savvy Psychologist podcast. She specializes in helping those with sleep problems and anxiety disorders.

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At any moment, someone’s aggravating behavior or our own bad luck can set us off on an emotional spiral that threatens to derail our entire day. Here’s how we can face our triggers with less reactivity so that we can get on with our lives.

• Emotional Intelligence
• Gaslighting
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Your Money: The Missing Manual by J. D. Roth

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Chapter 1. It’s More Important to Be Happy Than to Be Rich

" Happiness, not gold or prestige, is the ultimate currency .”

You don’t want to be rich—you want to be happy . Although the mass media has convinced many Americans that wealth leads to happiness, that’s not always the case. Money can certainly help you achieve your goals, provide for your future, and make life more enjoyable, but merely having the stuff doesn’t guarantee fulfillment.

This book will show you how to make the most of your money, but before we dive into the details, it’s important to explore why you should care. It doesn’t do much good to learn about compound interest or high-yield savings accounts if you don’t know how money affects your well-being.

If personal finance were as simple as understanding math, this book wouldn’t be necessary; people would never overspend, get into debt, or make foolish financial decisions. But research shows that our choices are based on more than just arithmetic—they’re also influenced by a complex web of psychological and emotional factors.

This chapter gives you a quick overview of the relationship between money and happiness. You’ll also learn techniques for escaping the mental traps that make it hard to be content with what you have. As you’ll see, you don’t need a million bucks to be happy.

How Money Affects Happiness

The big question is, “Can money buy happiness?” There’s no simple answer.

“It seems natural to assume that rich people will be happier than others,” write psychologists Ed Diener and Robert Biswas-Diener in Happiness (Blackwell Publishing, 2008). “But money is only one part of psychological wealth, so the picture is complicated.”

There is a strong correlation between wealth and happiness, the authors say: “Rich people and nations are happier than their poor counterparts; don’t let anyone tell you differently.” But they note that money’s impact on happiness isn’t as large as you might think. If you have clothes to wear, food to eat, and a roof over your head, increased disposable income has just a small influence on your sense of well-being.

To put it another way, if you’re living below the poverty line ($22,050 annual income for a family of four in 2009), an extra $5,000 a year can make a huge difference in your happiness. On the other hand, if your family earns $70,000 a year, $5,000 may be a welcome bonus, but it won’t radically change your life.

So, yes, money can buy some happiness, but as you’ll see, it’s just one piece of the puzzle. And there’s a real danger that increased income can actually make you miserable—if your desire to spend grows with it. But that’s not to say you have to live like a monk. The key is finding a balance between having too little and having too much—and that’s no easy task.

A recent article in the Journal of Consumer Research showed that, in general, our feelings for material purchases fade more quickly than they do for experiential purchases. Material goods depreciate: The day after you buy something, it’s usually worth less than you paid for it. Experiences, on the other hand, appreciate: Your memories of the things you do—vacations you take, concerts you go to—become fonder with time because you tend to recall the positives and forget the negatives.

The Fulfillment Curve

American culture is consumption-driven. The media teaches you to want the clothes and cars you see on TV and the watches and jewelry you see in magazine ads. Yet studies show that people who are materialistic tend to be less happy than those who aren’t. In other words, if you want to be content, you should own—and want—less Stuff.

Because Stuff has such an important role in your happiness (and unhappiness), it deserves a capital S. You’ll read more about Stuff throughout this book, especially in Chapter 5 .

In their personal-finance classic Your Money or Your Life (Penguin, 2008), Joe Dominguez and Vicki Robin argue that the relationship between spending and happiness is non-linear, meaning every dollar you spend brings you a little less happiness than the one before it.

More spending does lead to more fulfillment—up to a point. But spending too much can actually have a negative impact on your quality of life. The authors suggest that personal fulfillment—that is, being content with your life—can be graphed on a curve that looks like this:

Figure 1-1. The Fulfillment Curve

This Fulfillment Curve has four sections:

Survival . In this part of the curve, a little money brings a large gain in happiness. If you have nothing, buying things really does contribute to your well-being. You’re much happier when your basic needs—food, clothing, and shelter—are provided for than when they’re not.

Comforts . After the basics are taken care of, you begin to spend on comforts: a chair to sit in, a pillow to sleep on, a second pair of pants. These purchases, too, bring increased fulfillment. They make you happy, but not as happy as the items that satisfied your survival needs. This part of the curve is still positive, but not as steep as the first section.

Luxuries . Eventually your spending extends from comforts to outright luxuries. You move from a small apartment to a home in the suburbs, say, and you have an entire wardrobe of clothing. You drink hot chocolate on winter evenings, sit on a new sofa, and have a library of DVDs. These things are more than comforts—they’re luxuries, and they make you happy. They push you to the peak of the Fulfillment Curve.

Overconsumption . Beyond the peak, Stuff starts to take control of your life. Buying a sofa made you happy, so you buy recliners to match. Your DVD collection grows from 20 titles to 200, and you drink expensive hot chocolate made from Peruvian cocoa beans. Soon your house is so full of Stuff that you have to buy a bigger home—and rent a storage unit. But none of this makes you any happier. In fact, all of your things become a burden. Rather than adding to your fulfillment, buying new Stuff actually detracts from it.

The sweet spot on the Fulfillment Curve is in the Luxuries section, where money gives you the most happiness: You’ve provided for your survival needs, you have some creature comforts, and you even have a few luxuries. Life is grand. Your spending and your happiness are perfectly balanced. You have Enough.

Yup, Enough gets a capital E, too. You’ll learn more about deciding how much is Enough later in this chapter. (And don’t worry: There aren’t any more words with goofy capitals ahead.)

Unfortunately, in real life you don’t have handy visual aids to show the relationship between your spending and your happiness; you have to figure out what Enough is on your own. But as you’ll see in the next section, because we’ve been conditioned to believe that more money brings more happiness, most people reach the peak of the Fulfillment Curve and then keep on spending.

Caught Up in the Rat Race

Typically, as your income increases, your lifestyle grows with it. When your boss gives you a raise, you want to reward yourself (you deserve it!), so you spend more. All that new Stuff costs money to buy, store, and maintain. Gradually, your lifestyle becomes more expensive so you have to work harder to earn more. You think that if only you got another raise, then you’d have Enough. But in all likelihood, you’d just repeat the process by spending even more.

Psychologists call this vicious cycle the hedonic treadmill , though you probably know it as the “rat race.” People on the hedonic treadmill think they’d be happy if they just had a little more money. But when they get more money, they discover something else they want. Because they’re never content with what they have, they can never have Enough.

Most Americans are stuck on this treadmill. According to the U.S. Census Bureau ( http://tinyurl.com/census-inc ), in 1967 the median American household income was $38,771 (adjusted for inflation). Back then, less than one-fifth of U.S. families had color TVs and only one in 25 had cable. Compare that with 2007, when the median household income was $50,233 and nearly everyone had a widescreen color TV and cable. Americans now own twice as many cars as they did in 1967, and we have computers, iPods, and cellphones. Life is good, right? But despite our increased incomes and material wealth, we’re no happier than were in the ’60s.

In case it’s been a while since your last math class, here’s a quick refresher: If you have a set of numbers, half of them will be greater than the median , and half will be less. The median is usually different from the average. For example, in the group of numbers 2, 3, 4, 5, and 101, the average is 23, but the median is only 4. (If economists talked about average incomes instead of median incomes, their numbers would be skewed by billionaires like Warren Buffett.)

Since 1972, the National Opinion Research Center has been polling Americans about their happiness ( http://tinyurl.com/norc-gss ). As you can see in the following graph, the numbers haven’t changed much over the past 35 years. About one-third of Americans consistently say they’re “very happy” with their lives ( http://tinyurl.com/gss-happy ), while a little less than one-third say they’re “pretty well satisfied” with their financial situations ( http://tinyurl.com/gss-satfin ).

Figure 1-2. Info from the National Opinion Research Center’s General Social Survey

If Americans are earning more, why aren’t they happier? We’ve been led to believe that prosperity brings peace of mind, but it turns out your grandfather was right: Money isn’t everything.

The bottom line: Money can’t make you happy if your increased wealth brings increased expectations . In other words, if you want more as you earn more, you’ll never be content; there will always be something else you crave, so you’ll need to work even harder to get the money to buy it. You’ll be stuck on the hedonic treadmill, running like a hamster on a wheel.

The hedonic treadmill leads to lifestyle inflation, which is just as dangerous to your money as economic inflation; both destroy the value of your dollars. Fortunately, you can control lifestyle inflation. You can opt out, step off the treadmill, and escape from the rat race. To do that, you have to set priorities and decide how much is Enough. The next section shows you how.

How Much Is Enough?

Kurt Vonnegut used to recount a conversation he had with fellow author Joseph Heller (Vonnegut published this anecdote as a poem in the New Yorker ). The two writers were at a party thrown by a billionaire when Vonnegut joked, “How does it feel to know that our host makes more in one day than Catch-22 [Heller’s best-known work] has made in its entire history?” Heller responded, “I’ve got something he can never have. I’ve got Enough.”

Your Money And Your Life: Sudden Riches

Some folks believe their worries would vanish if only they had a six-figure salary. Others play the lottery because they think winning would solve their problems. But it’s not how much you earn that determines how happy you are—it’s how much you spend in relation to your income.

Take pro athletes: The average NFL player earns $1.1 million per year, and the average NBA player makes $4 million per year. Yet even these vast incomes sometimes aren’t enough to cover what players spend. In a recent issue of Sports Illustrated , Pablo S. Torre described how and why athletes go broke (you can read his article at http://tinyurl.com/brokeathletes ). He writes that after 2 years of retirement, “78% of former NFL players have gone bankrupt or are under financial stress. “Within 5 years of retirement, roughly 60% of former NBA players are in similar positions.

Lottery winners have the same kinds of problems. A 2001 article in The American Economic Review found that after receiving half their jackpots, the typical lotto winner had only put about 16% of that money into savings. It’s estimated that over a quarter of lottery winners go bankrupt. Take Bud Post: He won $16.2 million in 1988. Within weeks of receiving his first annual payment of nearly half a million dollars, he’d spent $300,000. During the next few years, Post bought boats, mansions, and airplanes, but trouble followed him everywhere. “I was much happier when I was broke,” he’s reported to have said. When he died in 2006, Post was living on a $450 monthly disability check. You can read more about him here: http://tinyurl.com/budpost .

Of course, not every wealthy person is so profligate. In fact, according to Thomas Stanley and William Danko, most millionaires are careful with their money. In their classic book The Millionaire Next Door (Pocket, 1998), Stanley and Danko catalog the characteristics of the quiet millionaires—those who live in average neighborhoods, drive average cars, and work average jobs. These folks are able to build and maintain wealth because they keep their spending in check—even as their incomes rise. The authors say the three words that best describe the affluent are “frugal frugal frugal.”

So even if you come into a windfall like an inheritance or a bonus—or even a lottery jackpot—take your cue from the frugal millionaires: Don’t spend it all in one place. ( Church, Charity, and Community has more about how to handle a windfall.)

Knowing that you have Enough can be better than having billions of dollars. If you’re obscenely rich but aren’t happy, what good is your money? Contentment comes from having Enough—not too little and not too much. But how much is Enough?

There’s no simple answer. What’s Enough for you may not be Enough for your best friend. And what you need to remain at the peak of the Fulfillment Curve ( The Fulfillment Curve ) will change with time, so Enough is a bit of a moving target. It’s tough to define Enough, but there are some steps you can take to figure out what it means to you.

Understand your goals and values

If you don’t know why you’re earning and spending money, then you can’t say when you have Enough. So take time to really think about what having Enough means to you. Discuss it with your family, and explore the idea with your best friend. Is being debt-free Enough? Being able to pay cash for a new boat? Having a million dollars saved for retirement? Decide what Enough means to you, and then write it down. If you don’t have an end in sight, you’re at greater risk of getting stuck in the rat race.

Personal goals are so critical to financial success that you’ll spend all of Chapter 2 learning how to set them.

Practice conscious spending

Because the notion of Enough is so vague, the best way to approach it is to be mindful of your financial habits. The act of consciously choosing how you spend can help you make purchases that are in line with your goals and values.

Ramit Sethi popularized the concept of conscious spending in his book I Will Teach You to Be Rich (Workman Publishing, 2009). The idea is to spend with intent, deliberately deciding where to direct your money instead of spending impulsively. Sethi argues that it’s okay to spend $5,000 a year on shoes— if that spending is aligned with your goals and values and you’ve made a conscious choice to spend this way (as opposed to spending compulsively—see Curbing Compulsive Spending ).

If you’re new to conscious spending, try asking yourself the following questions:

Did I receive value from this equal to the amount I spent ? In other words, did you get your money’s worth? You already know that $100 spent on one thing isn’t always as good as $100 spent on another. Conscious spending is about striving to get the most bang for your buck.

Is this spending aligned with my goals and values ? Conscious spending means prioritizing: putting your money toward the things you love—and cutting costs mercilessly on the things you don’t. If you’re happy with the coffee at the office, then don’t waste your money at Starbucks. But if your extra-hot nonfat caramel latte is the highlight of your day, then buy the latte! Spend only on the things that matter to you.

The box below tells the story of Chris Guillebeau, who has made a lot of unorthodox choices to be sure his spending matches his priorities.

Your Money And Your Life: The Art of Non-Conformity

Chris Guillebeau takes conscious spending to an extreme. At 32, he’s defined what’s important to him and is willing to make sacrifices to be sure his spending is aligned with his goals and values. One of his ambitions is to visit every country in the world by his 35th birthday. (As of this writing, he’s visited 124 of 192 countries, and he’s got 3 years to go.)

Travel is expensive, so in order to meet his goal, Guillebeau has made it his top priority. “Some people think I’m crazy,” he says. “I don’t own a car, so I walk everywhere. I don’t even like spending a few bucks to use public transportation. But I spend thousands of dollars to fly all over the world.”

By doing without the things that aren’t meaningful to him—like a car—Guillebeau can afford the things he’s passionate about. To read more about his unconventional life, check out his blog at www.chrisguillebeau.com , and look for his upcoming book, The Art of Non-Conformity (Perigee, 2010).

Reduce clutter

If you have so much Stuff that you need to rent a storage shed, you have more than Enough. If the Stuff leads to clutter that stresses you out, you’ve passed the peak of the Fulfillment Curve and your added luxuries are bringing you less happiness, not more.

Purging clutter can be a profound experience, but it can be difficult, too: You don’t want to toss anything out because you might need it someday, or it has sentimental value, or it may be worth something.

Getting rid of Stuff only hurts for a little bit. Once you’ve pared your belongings, it’s like a weight has been lifted; you feel free. Some people find the process so liberating that they go farther and practice voluntary simplicity , even to the point of moving into a smaller home. For example, Dave Bruno is chronicling his fight against materialism at his website ( http://tinyurl.com/100thingchallenge ); his goal is to own only 100 personal items.

Living Green: The Missing Manual suggests lots of great ways to de- clutter your life.

Seek balance

A balanced life is a fulfilling life. To find balance, you have to figure out how much is Enough for you—the point where you’re content with what you have and can say “this much, but no more.”

Once you define Enough, you gain a sense of freedom. You’re no longer caught up in the rat race and have time to pursue your passions. You can surround yourself with family and friends, and rediscover the importance of social capital —the value you get from making personal connections with people in your community (see Social Capital ). And because you no longer feel compelled to buy more Stuff, you can use your money to save for things that truly matter.

It’s Not About the Money

If vast riches won’t bring you peace of mind, what will?

In a 2005 issue of the Review of General Psychology , Sonja Lyubomirsky, Kennon Sheldon, and David Schkade looked at years of research to figure out what contributes to “chronic happiness” (as opposed to temporary happiness). Based on their survey, they came up with a three-part model:

About half of your happiness is biological . Each person seems to have a happiness “set point,” which accounts for roughly 50% of your sense of well-being. Because this set point is genetic, it’s hard to change.

Another 10% of happiness is based on circumstances—external factors beyond your control . These include biological traits like age, race, nationality, and gender, as well as things like marital status, occupational status, job security, and income. Your financial situation is part of this 10%—but only a part—which means it accounts for just a fraction of your total happiness.

The final 40% of happiness comes from intentional activity —the things you choose to do . Whereas circumstances happen to you, intentional activity happens when you act by doing things like exercising, pursuing meaningful goals, or keeping a gratitude journal.

According to the authors, because circumstances—including your financial situation—play such a small role in your general contentment, it makes more sense to boost your bliss through intentional activity, by controlling the things you can and ignoring those you can’t. (You can read the entire article at http://tinyurl.com/hmodel .)

Although your financial situation plays only a small role in your overall happiness, most people believe it’s more important than that. Because of this, many Americans spend their lives striving for more money and possessions—but find that this materialism makes them less happy.

If you’re caught up in the rat race, you may be dealing with things like credit card debt, living paycheck to paycheck, fighting with your spouse over money, and working a job you hate. These problems all stem from one issue: lack of control. When you feel like you have no control over money, you’re worried and stressed. By taking charge of your finances, you can get rid of many of these stressors and be happier. Wealth gives you options and makes it easier to focus on things that can make you content.

This book will teach you specific ways to gain control of your finances. The first step to leading a rich life is learning how to set priorities.

On The Money: Happiness by the Numbers

In their book Happiness , Ed Diener and Robert Biswas-Diener talk about the happiness formula , their attempt to quantify all this psychological stuff about money and well-being.

They found that a larger income generally makes people happier—but not always. It’s not just how much you make that determines how satisfied you are with your life, but how that money relates to your desires. You might say that happiness is equal to what you have divided by what you want.

Say, for instance, that you’re a famous author earning $200,000 a year. On paper, that sounds like a lot of money, but if you yearn for expensive luxuries and experiences, you may actually feel poor. On the other hand, if you’re a struggling writer bringing in $40,000 a year, you can be happy as long as your expectations are low—that is, if you don’t want more than you have. This is why frugality is so important. ( Chapter 5 is chock-full of tips for spending less.)

For another attempt to quantify well-being, take a look at this happiness formula from Dilbert creator Scott Adams: http://tinyurl.com/happy-dilbert .

Living a Rich Life

Living richly means figuring out what to spend your time, money, and energy on—and what to ignore. Since you can’t have everything, you have to prioritize. This means spending money on things that matter to you—and skimping on things that don’t.

Psychologists generally agree that a life well-lived is rich in:

Security . It’s hard to be happy when you’re constantly worrying about how to pay the bills. If you have money, you don’t have to worry about those things. (But, as you now know, you don’t have to be rich to be happy.) By living below your means and avoiding debt, you can gain some financial control over your life.

Relationships . True wealth comes from relationships, not from dollars and cents. Wealthy or poor, people with five or more close friends are more apt to describe themselves as happy than those with fewer. A long-term, loving partnership goes hand in hand with this. And as you’ll learn later ( Social Capital ), social capital can be worth as much as financial capital.

Experiences . As explained in the Note on How Money Affects Happiness , memories tend to grow more positive with time, but Stuff usually drops in value—both actual value and perceived value. As Gregory Karp writes in The 1-2-3 Money Plan (FT Press, 2009), “Experiences appreciate, assets depreciate.” And in Your Money and Your Brain (Simon & Schuster, 2008), Jason Zweig notes, “Doing and being are better than having.”

Remember these three pillars of happiness and you can build a rich life even on a limited income.

To further improve your relationship with money, keep these guidelines in mind:

Prioritize . Spend on the things that make you happiest. There’s nothing wrong with buying things you’ll use and enjoy—that’s the purpose of money. If you’re spending less than you earn, meeting your needs, and saving for the future, you can afford things that make life easier and more enjoyable. (For another way to prioritize, see the box on Living a Rich Life .)

Stay healthy . There’s a strong tie between health and happiness. Anyone who’s experienced a prolonged injury or illness knows just how emotionally—and financially—devastating it can be. Eat right, exercise, and get enough sleep ( Your Body: The Missing Manual has loads of tips on how to do all those things).

Don’t compare yourself to others . Financially, psychologically, and socially, keeping up with the Joneses is a trap. You’ll always have friends who are wealthier and more successful in their careers than you. Focus on your own life and goals.

Limit media exposure . Mass media—especially TV—tries to persuade you that happiness depends on things you don’t really need and can’t afford. Studies have found that watching lots of TV can influence your levels of materialism—how much you think you need to be happy.

Simplify . The average Joe believes that materialism is the path to happiness—but the average Joe is wrong. Research shows that materialism actually leads to unhappiness and dissatisfaction. By simplifying your life and reducing the amount of Stuff you own (or want to own), you’ll save money and be happier.

Help others . Altruism is one of the best ways to boost your happiness. It may seem counter-intuitive (and maybe even a little self-serving), but donating to your church or favorite charity is a proven method for brightening your day.

Embrace routine . Emerson wrote, “A foolish consistency is the hobgoblin of little minds,” but there’s evidence that some consistency is conducive to contentment. In Happier (McGraw-Hill, 2007), Tal Ben-Shahar recommends building routines around the things you love: reading, walking, gaming, knitting, whatever. Because it can be difficult to make the time for these activities, he argues that we should make rituals out of them. If you enjoy biking, make a ritual out of riding to the park every evening, for example. (See the box below for tips on finding time for what you love.)

Pursue meaningful goals . As you’ll learn in the next chapter, the road to wealth is paved with goals, and the same is true of the road to happiness. But for a goal to be worthwhile, it has to be related to your values and interests—it has to add something to your life. Chapter 2 will help you decide what goals to set.

On The Money: Fun Things First

You lead a busy life. There never seems to be enough time to do the things you really want, like doing yoga, running, or having a weekly night out with your sweetie. With so much already on your plate, how can you fit it all in?

In Work Less, Live More (Nolo Press, 2007), Bob Clyatt argues that you can make time for fun stuff. The secret, he says, is prioritizing:

Imagine you have an empty jar, a collection of a few large rocks, and several handfuls of gravel. Your task is to put all the large and small rocks into the jar. One approach would be to pile all the gravel first, but doing so would leave room for only one or two of the large rocks; you wouldn’t get everything to fit. Switch your approach and put the large rocks in first, and you’ll find that the gravel will all fit nicely around the empty space. If a bit of gravel doesn’t fit at the end, you’ve not lost much. Let too many little things take priority, and there never seems to be time for the big things. Consider the Big Rocks to be really important things you want to accomplish in life, the things that define you. Get the big things in first, work on the right projects and priorities, and let the little stuff fit in around the edges. Let your Big Rocks be non-negotiable priorities in your weekly calendar—and learn to say “no” when other things begin to intrude. Then fit those other things in where you can.

So if running makes you happy, schedule your runs—and then fit the rest of your life around them. Don’t ignore your obligations, but make the stuff you have to do fit around the stuff you want to do, not the other way around.

The bottom line is that if you can’t be content, you’ll never lead a rich life, no matter how much money you have. The key to money management—and happiness—is being satisfied. It’s not how much you have that makes you happy or unhappy, but how much you want . If you want less, you’ll be happy with less. This isn’t a psychological game or New Age mumbo-jumbo, it’s fact: The lower your expectations, the easier they are to fulfill—and the happier you’ll be.

That’s not to say you should lead an aimless life of poverty; quite the opposite, in fact. But most people confuse the means with the ends. They chase after money and Stuff in an attempt to feel fulfilled, but their choices are impulsive and random. Their “retail therapy” doesn’t address the root cause of their unhappiness: They lack goals and an underlying value system to help guide their decisions.

In the next chapter, you’ll learn how to create meaningful financial goals that are aligned with your passions. Then you’ll be able to use these goals to make better decisions about money. These choices will, in turn, help you live a happier life.

For an excellent look at how to be happy, pick up a copy of Gretchen Rubin’s The Happiness Project (Harper, 2009).

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However you spend it, money isn’t the key to happiness

Research Fellow at Stirling Management School, University of Stirling

Disclosure statement

Christopher Boyce receives funding from the Economic and Social Research Council.

University of Stirling provides funding as a member of The Conversation UK.

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How important, if at all, is having more money for our happiness and well-being? Unsurprisingly this question stimulates a lot of opinion and debate. But are people accurate in their predictions about the benefits of having money?

A new study published in the Journal of Positive Psychology highlights that people are often mistaken in how spending our money might benefit our lives. People are prone to forecasting errors – that is, they mistakenly predict future events to be better or worse than they actually turn out to be.

In this latest study the researchers show that people predict that buying material possessions will be a better use of money than spending instead on life experiences. But once the purchases are had, the experience is what’s perceived to have been a better use of money, resulting in higher well-being. More or less, this confirms findings from other studies . And so it seems that a focus on having as opposed to being may limit human potential.

But what does this new study tell us about the importance of money for both happiness and well-being more generally? On the whole money matters much less than people think and has led some to conclude simply that money doesn’t make us happy because we aren’t spending it right .

My own research has also illustrated that we probably don’t spend our money on the things most beneficial for well-being. For example, we have shown that spending on psychological therapy would be an extremely cost-effective way of raising well-being . But, the message from our research is not that we should just spend our money better and that people underestimate the effect of purchasing certain things, as the authors claim in the latest study. Instead, our work highlights just how relatively unimportant money is at raising individual well-being compared to other more important things.

More to life than money

How to spend our money is not the only choice we have – we also have choices as to how we should live our lives and whether in fact we should spend so much time and energy pursuing money in the first place. Thus when we are trying to understand the importance of money for well-being it is one thing to compare types of spending, but really we should be comparing how important money is in relation to other things.

The reality is that how much someone earns contributes very little to their sense of well-being compared with other things such as social relationships, physical and mental health or how a person relates to the world around them. Focusing directly on these factors would probably do much more for our well-being rather than how we chose to spend our money.

We have demonstrated that personality change, for example, contributes substantially more to changes in well-being than income factors . People who, for example, become more open to new experiences or emotionally more stable, are much more likely to experience larger well-being changes than any change to their income.

Being materialistic is well-known to be detrimental to an individual’s well-being. Those that pursue wealth and possessions consistently report lower well-being than those that don’t.

So a better question to address than how we should spend our money is: “Why does more money seem to bring us very little well-being even though we often predict otherwise?”

Money and social standing

One reason is that people don’t care about how much money they have per se, but care more about the social position that their income gives them . But increases in an individual’s income won’t necessarily equate to a growth in social standing. And, while people may think that an income increase will bring greater well-being, this may not factor in that everyone else may experience an income increase at the same time.

It’s also been shown that income losses have a much greater impact on well-being than equivalent income gains . This suggests that any benefit that accrues from an income rise, whether at the individual or national level, may be completely wiped out by much smaller income losses. The importance of income is therefore not in obtaining it, but avoiding losing it. Only once it’s obtained does income become essential to maintain your current level of well-being and this may partly explain why it is believed to be so important for well-being.

The question as to whether more money brings greater happiness comes up time and time again and will no doubt continue to do so. Indeed it is an important question and how we spend our money is of course important – if we have money then of course it makes sense to use it wisely. But it would be a mistake to let the pursuit of money for the sake of happiness distract us away from the things in life that simply matter more.

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Does money make people happy.

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For Will Smith’s character, it was very clear that the “Pursuit of Happyness" was inseparable from ... [+] the pursuit of money.

Many people have seen the Will Smith movie The Pursuit of Happyness , which is based on the true story of the entrepreneur Chris Gardner, who was homeless for almost a whole year. In the film, Smith plays a single father who is struggling to make ends meet and give his young son Christopher a normal life. When one day he is offered an unpaid internship as a stockbroker, he takes up the offer, even though he is already struggling to get by. He dedicates himself to completing the internship in order to offer his son the prospect of a better future.

Smith’s marriage and family life fell apart largely because he wasn’t earning enough to keep up with his rent and bills. On one occasion, he even had to spend a night in prison because he couldn’t pay his outstanding parking tickets. As for many people, money became important for him not because he had too much of it, but because he had too little. It was therefore quite clear to him that the Pursuit of Happyness was inseparable from the pursuit of money.

“Health Without Money Is Half A Sickness”

Poets, bards and philosophers have coined numerous aphorisms to question the value of money and condemn the pursuit of earthly riches. “If your happiness depends on money, you will never be happy with yourself,” the Chinese philosopher Lao Tzu cautioned. The musician Bob Dylan asked: “What’s money? A man is a success if he gets up in the morning and goes to bed at night and in between does what he wants to do.” And Albert Einstein said: “Money only appeals to selfishness and irresistibly invites abuse.”

Even the ancient philosophers were frequently critical of wealth and money. In his Republic , Plato says: “The more they think of making a fortune the less they think of virtue; for when riches and virtue are placed together in the scales of the balance, the one always rises as the other falls.”

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On the other hand, there have always been poets and philosophers who viewed the matter in quite a different light. “Health without money is half a sickness,” the great poet Johann Wolfgang von Goethe said. Meanwhile, the Dutch philosopher Benedictus de Spinoza professed skepticism against those who express a one-sided view of wealth: “For a poor man also, who is miserly, will talk incessantly of the misuse of wealth and of the vices of the rich; whereby he merely torments himself, and shows the world that he is intolerant, not only of his own poverty, but also of other people’s riches.”

The American poet Gertrude Stein said: “I’ve been rich and I’ve been poor. It’s better to be rich.” And the writer Oscar Wilde, who loved to exaggerate in order to provoke outrage and reveal simple truths, claimed: “When I was young I thought that money was the most important thing in life; now that I am old I know that it is.”

Married Couples Argue A Lot About Money

So what is it that causes unhappiness—money or rather the lack of it? Money is a major bone of contention in virtually every divorce and researchers have found that it is also at the core of many arguments in relationships. Lauren Papp from the University of Wisconsin asked 100 couples with children to keep a diary for two weeks. Partners were asked to separately record the cause and duration of their arguments each day. The results showed that couples argued more intensely about money than any other subject. Most couples felt that arguments about money constituted a threat to their shared future and found them harder to resolve than any other arguments.

Erich Kirchler, a business psychologist at the University of Vienna, wanted to know what couples talk about and what they argue about. He asked 40 couples to keep a diary for a year. Economic issues proved to be more controversial than any other topics. Couples frequently argued about how much money they were allowed to spend on what.

Conduct an experiment for yourself and keep a record of everything you worry about for one month. Make sure you cover all areas of your life: your job, your health, raising your children, your finances, your relationship, your body weight, etc. After a month, evaluate the results: how many of these issues would not have come up if you had plenty of money? You will see that there are many worries you would have avoided if you had enough money. However, you will also see that there are many worries that would not have gone away if you had enough money. For these, you should note whether they would have been more bearable or whether the attendant problems might have been easier to resolve if you had a lot more money.

Findings From The Field Of Happiness Research

Is there anything more important than the question of what it takes to live a happy life? Attempts to answer this question have given rise to an entire research discipline, the “science of happiness.” There is a popular misconception that scientists have come to the conclusion that money does not lead to happiness. However, recent scientific research by Joachim Weimann, Andreas Knabe and Ronnie Schöb has shown that this is not exactly true.

In 1974, Richard Easterlin was the first scientist to claim that “money does not lead to happiness.” Based on surveys, he came to the conclusion that happiness does not depend on a person’s absolute income level, but on their relative position in society, i.e. whether they have more or less than their peers. According to Easterlin, this holds true globally above an income level of $15,000 a year. In other words, there is an assumption that raising the income of the poorest would clearly have a significant impact on their quality of life and overall happiness.

However, matters are more complicated than they might seem at first glance. Scientists distinguish between “affective” and “cognitive” happiness. Researchers have traditionally measured cognitive happiness by asking people to rate their current levels of happiness: “On a scale of 0 (not satisfied at all) to 10 (completely satisfied), please tell us how satisfied you currently are with your life as a whole.”

This type of survey measures overall satisfaction rather than “affective” happiness, i.e. the accumulation and duration of moments of happiness over the course of a day or a month. While wealth has no measurable impact on the latter, recent studies have shown that—Easterlin’s claims notwithstanding—there is in fact a strong correlation between overall satisfaction and income.

These studies have found that “people at higher income levels are more satisfied with life. Interestingly, even at annual income levels above $120,000, this positive correlation still applied. There is no saturation point, a higher income equals more happiness at all levels.” These studies even showed that where incomes are increased by the same percentage, the impact is stronger at higher income levels than at lower income levels.

Of course there are numerous aspects of life that are not directly related to money. People suffer from illnesses or relationship break-ups at any income level. However, the most interesting finding of scientific research into personal happiness is that “poor people experience adverse circumstances, e.g. an illness, a divorce or loneliness as significantly worse than wealthier cohorts.” This observation is all the more important because it shows that income and wealth affect other areas of life as well.

Whenever someone says that “money is not important” or even “money makes you unhappy,” their motive is obvious. Since they have no money, their words are designed to comfort themselves.

The vast majority of people, however, would certainly agree that freedom makes people happy. And far fewer people would dare to argue with the fact that “freedom” is clearly positive and desirable than would reject the notion that money is something positive and desirable. But financial freedom is an important component of freedom in general. Only the financially free, namely those who do not have to work to pay their bills, are truly free to decide whether to work, what work to do, where to work, when to work and how to work.

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ORIGINAL RESEARCH article

Money does not always buy happiness, but are richer people less happy in their daily lives it depends on how you analyze income.

• 1 Institute of Applied Health Research, University of Birmingham, Birmingham, United Kingdom
• 2 Department of Psychology, Georgetown University, Washington, DC, United States

Do people who have more money feel happier during their daily activities? Some prior research has found no relationship between income and daily happiness when treating income as a continuous variable in OLS regressions, although results differ between studies. We re-analyzed existing data from the United States and Germany, treating household income as a categorical variable and using lowess and spline regressions to explore nonlinearities. Our analyses reveal that these methodological decisions change the results and conclusions about the relationship between income and happiness. In American and German diary data from 2010 to 2015, results for the continuous treatment of income showed a null relationship with happiness, whereas the categorization of income showed that some of those with higher incomes reported feeling less happy than some of those with lower incomes. Lowess and spline regressions suggested null results overall, and there was no evidence of a relationship between income and happiness in Experience Sampling Methodology (ESM) data. Not all analytic approaches generate the same results, which may contribute to explaining discrepant results in existing studies about the correlates of happiness. Future research should be explicit about their approaches to measuring and analyzing income when studying its relationship with subjective well-being, ideally testing different approaches, and making conclusions based on the pattern of results across approaches.

Introduction

Does having more money make someone feel happier? The answer to this longstanding question has implications for how individuals live their lives and societies are structured. It is often assumed that more income brings more happiness (with happiness broadly defined herein as hedonic feelings, while recognizing closely related constructs, including satisfaction and eudaimonia; Tiberius, 2006 ; Angner, 2010 ; Dolan and Kudrna, 2016 ; Sunstein, 2021 ). In many aspects of policy, upward income mobility is encouraged, and poverty can result in exclusion, stigmatization, and discrimination by institutions and members of the public. More income provides people with opportunities and, sometimes, capabilities to consume more and thus satisfy more of their preferences, meet their desires and obtain more of what they want and need ( Harsanyi, 1997 ; Sen, 1999 ; Nussbaum, 2008 ). These are all reasons to assume that higher income will bring greater happiness—or, at least, that low income will bring low happiness.

Some research challenges the assumption that earning more should lead to greater happiness. First, because people expect that more money should make them happier, people may feel less happy when their high expectations are not met ( Graham and Pettinato, 2002 ; Nickerson et al., 2003 ) and they may adapt more quickly to more income than they expect ( Aknin et al., 2009 ; Di Tella et al., 2010 ). Second, since the 1980s in many developed countries, the well-educated have had less leisure time than those who are not ( Aguiar and Hurst, 2007 ) and people living in high-earning and well-educated households report feeling more time stress and dissatisfaction with their leisure time ( Hamermesh and Lee, 2007 ; Nikolaev, 2018 ). The quantity of leisure time is not linearly related to happiness, with both too much and too little having a negative association ( Sharif et al., 2021 ). Evidence also shows that people with higher incomes spend more time alone ( Bianchi and Vohs, 2016 ). The lower quality and quantity of leisure and social time of people with higher incomes may, in turn, negatively impact their happiness, especially given there are strong links between social capital or “relational goods” and well-being ( Helliwell and Putnam, 2004 ; Becchetti et al., 2008 ).

At the same time, some—but not all—evidence suggests that working class individuals tend to be more generous and empathetic than more affluent individuals ( Kraus et al., 2010 ; Piff et al., 2010 ; Balakrishnan et al., 2017 ; Macchia and Whillans, 2022 ), and such kindness toward others has been associated with higher well-being ( Dunn et al., 2008 ; Aknin et al., 2012 ). Relatedly, psychological research suggests that people with lower socioeconomic status have a more interdependent sense of self ( Snibbe and Markus, 2005 ; Stephens et al., 2007 ). It is, therefore, possible that people high in income have lower well-being because they experience less of the internal “warm glow” ( Andreoni, 1990 ) benefit that comes along with valuing social relationships and group membership. In theory, therefore, there are reasons to suppose that high income has both benefits and costs for well-being, and empirical evidence can inform the debate about when and whether these different perspectives are supported.

Empirical Evidence on Income and Happiness

The standard finding in existing literature is that higher income predicts greater happiness, but with a declining marginal utility ( Dolan et al., 2008 ; Layard et al., 2008 ): that is, higher income is most closely associated with happiness among those with the least income and is least closely associated with happiness for those with the most income. Recently, this finding has been qualified by studies showing that the relationship between income and happiness depends on how happiness is conceptualized and measured: as an overall evaluation of one’s life or as daily emotional states ( Kahneman and Deaton, 2010 ; Killingsworth, 2021 ). In this vein, authors Kushlev et al. (2015) found no relationship between income and daily happiness in the American Time Use Survey (ATUS), which has recently been found for other happiness measures, too ( Casinillo et al., 2020 , 2021 ) The finding from Kushlev et al. (2015) was replicated in the German Socioeconomic Panel Survey (GSEOP) by Hudson et al. (2016) , and in another analysis of the ATUS by Stone et al. (2018) .

Some research has focused specifically on the effect of high income on happiness. Kahneman and Deaton (2010) conducted regression analyses using a Gallup sample of United States residents, finding that annual income beyond ~$75K was not associated with any higher daily emotional well-being. Income beyond ~$75K, however, predicted better life evaluations. Using a self-selecting sample of experiential data in the United States, Killingsworth (2021) conducted piecewise regressions and found no evidence of satiation or turning points. Jebb et al. (2018) fit regression spline models to global Gallup data, showing that the satiation point in daily experiences found by Kahneman and Deaton (2010) was also apparent in other countries. Unlike Kahneman and Deaton (2010) , however, Jebb et al. (2018) also found evidence of satiation in people’s life evaluations, and even some evidence for “turning points”—whereby richer people evaluated their lives as worse than some of those with lower incomes. A satiation point in life evaluations was also found in European countries at around €28K annually ( Muresan et al., 2020 ).

This pattern of findings could partly depend on the choice of analytic strategy. In analyses of the same dataset as Jebb et al. (2018) but using lowess regression, researchers found no evidence of satiation or turning points in the relationship between income and people’s life evaluations ( Sacks et al., 2012 ; Stevenson and Wolfers, 2012 ). These conflicting results suggest that the effect of analytic strategy on results deserves a closer examination.

The Research Gap

While there has been much research on income and happiness, including according to how happiness is defined and measured, we are not away of any studies that have compared the relationship between income and happiness according to how income is defined and measured. We propose that the relationship between income and happiness may depend not only on how happiness is measured, but also on how income is measured and analyzed. To improve our knowledge of the relationship between income and happiness, this paper, we focus on nonlinearities in the relationship between income and happiness and re-analyze the ATUS data used by Kushlev et al. (2015) and Stone et al. (2018) , as well as the GSOEP data used by Hudson et al. (2016) . Specifically, while Kushlev et al. (2015) analyzed income as a continuous variable in the ATUS, we treat income the way it was measured: as a categorical variable. We compare these results to GSOEP data where we re-code the original continuous measure of income into categorical quantiles. To further explore nonlinearities in the relationship between income and happiness, we also conduct local linear “lowess” and spline regression analyses.

We chose to re-analyze these data to address the question of differences in the relationship between income and happiness according to the measurement and analysis of income because the ATUS and GSOEP provide nationally representative data on people’s feelings as experienced during specific “episodes” of the day after asking them to reconstruct what they did during the entire day. Thus, compared to data from Gallup, which measures affect “yesterday,” measurements in the ATUS are more grounded in specific experiences, and therefore, less subject to recall bias ( Kahneman et al., 2004 ). And unlike Gallup, which uses more crude, dichotomous (“yes-no”) response scales, ATUS measures happiness along a standard seven-point Likert-type scale. In the GSOEP, we were also able to analyze data from the Experience Sampling Methodology (ESM), which asks people how they are feeling during specific episodes during the day and, as such, is even more grounded in specific experiences.

Measuring and Analyzing Income

The original ATUS income variable—family income—contains 16 uneven categories (see Table 1 ). For example, Category 11 has a range of ~$10K, whereas Category 14 has a range of ~$25K. The increasingly larger categories are designed to reflect declining marginal utility as an innate quality of income. Based on this, Kushlev et al. (2015) analyzed income as a continuous variable using the original uneven categories. Continuous scales, however, assume equal intervals between scale points—a strong assumption to make for the relatively arbitrary rate of change in the category ranges. Is increasing one’s income from $20,000 to $25,000 really equidistant to increasing it from $35,000 to $40,000 ( Table 1 )? And can we really assume, for example, that adding $5,000 of additional income to $35,000 is the same as adding $10,000 of additional income to $40,000? Recognizing this issue, income researchers have adopted alternative strategies. For example, Stone et al. (2018) took the midpoints of each category of income, and then log-transformed it. Thus, they transformed the categorical measure of income into a continuous measure. This approach produced results for happiness consistent with the findings of Kushlev et al. (2015) .

Table 1 . The original categories of income in the ATUS family income measure with number of individuals in each income category in the ATUS 2010, 2012, and 2013 well-being modules.

Both the increasing ranges of the income scale itself and its log-transformations reflect an assumed declining marginal utility of income: They treat a given amount of income increase at the higher end of the income distribution as having less utility than the same amount at the lower end of the distribution. But by subsuming income’s declining utility in its very measurement (or transformation thereof), it becomes difficult to interpret a null relationship with happiness. In other words, we might not be seeing a declining marginal utility of income reflected on happiness because the income variable itself reflects its declining utility.

Even when the income variable itself does not reflect its declining utility, a null relationship between income and daily experiences of happiness has been observed. Hudson et al. (2016) used GSOEP, which contains a measure of income that is continuous in its original form. Whether analyzing this income measure in its raw original form or in transformed log and quadratic forms, a null relationship with happiness was observed. This approach, however, does not consider whether there might be nonlinear/log/quadratic turning or satiation points at higher levels of income—an issue also applicable to previous analyses of ATUS ( Kushlev et al., 2015 ; Stone et al., 2018 ). This is important because there are theoretically both benefits and costs to achieving higher levels of income that could occur at various levels of income; however, this possibility has not yet been fully explored in ATUS or GSOEP data.

In sum, past research using ATUS has treated categorically measured income as a continuous variable, either assuming equidistance between scale points or attempting to create equidistance through statistical transformations. By doing so, however, researchers may have statistically accounted for the very utility of income for happiness that they are trying to test. In both ATUS and GSOEP, the question of whether there might be satiation and/or turning points at higher levels of income has not been fully considered. The present research explores whether treating income as a categorical variable in both ATUS and GSOEP would replicate past findings or reveal novel insights, focusing on possible nonlinearities in the relationship between income and happiness.

Materials and Methods

We used data from ATUS well-being modules in 2010, 2012, and 2013. To facilitate future replications of this research, the ATUS extract builder was used to create the dataset ( Hofferth et al., 2017 ). 1 The ATUS is a repeated cross-sectional survey and is nationally representative of United States household residents aged 15 years and older. Its sampling frame is the Current Population Survey (CPS), which was conducted 2–5 months prior to the ATUS. Some items in the ATUS come from the CPS, including the household income item that we analyze.

Data from the GSOEP come from the Innovation Sample (IS), which is a subsample of the larger main GSOEP ( Richter and Schupp, 2015 ). The main GSOEP and the IS are designed to be nationally representative. The IS contains information on household residents aged 17 years of age and older. We used two modules from these data: the 2012–2015 DRM module, which is a longitudinal survey, and the 2014–2015 ESM module.

Outcome Measures

In ATUS, participants were called on the phone and asked how they spent their time yesterday: what activities they were doing, for how long, who they spent time with and where they were located. This information was used to create their time use diary. A random selection of three activities were taken from these diaries and participants were asked how they felt during them. The feelings items were tired, sad, stressed, pain, and happy. Participants were also asked how meaningful what they were doing felt.

In GSOEP, participants were interviewed face to face for the DRM questions and through smartphones for the ESM questions. In the DRM, as in the ATUS, they were asked how they spent their time yesterday and, for a random selection of three activities, they were asked further details about how they felt. In the ESM, participants were randomly notified on mobile phones at seven random points during the day for around 1 week. As in the DRM, they were asked how they were spending their time at the point of notification, as well as how they felt. Participants in both ESM and DRM samples were asked about whether they were feeling happy, as well as other emotions such as sadness, stress, and boredom.

The focus of this research is on the happiness items from both the ATUS and GSOEP to highlight differences according to the treatment of the independent measure of income rather than differences according to the dependent outcome of emotional well-being.

Data were analyzed in STATA 15 and jamovi. The Supplementary Material S1 file contains the STATA command file for the main commands written to analyze the data. In both ATUS and GSOEP, OLS regressions were conducted with happiness as the outcome measure and income as the explanatory measure. Following Kushlev et al. (2015) and Hudson et al. (2016) , the average happiness across all activities each day was taken to create an individual-level measure. Because the GSOEP DRM sample contained multiple observations across years, the SEs were clustered at the individual level for models using this dataset.

The treatment of income differed according to the dataset because income was collected differently in each dataset. In the ATUS, income was first analyzed in continuous, log, and quadratic forms in OLS regressions, as in other research ( Kushlev et al., 2015 ; Hudson et al., 2016 ). Next, it was analyzed as a categorical variable with 16 categories, preserving the identical format that it was originally collected in from the CPS questionnaire.

In GSOEP, the income variable in the dataset is provided in continuous form because participants reported their monthly income as an integer. To compare to the ATUS results, 16 quantiles of income were created and analyzed in GSOEP DRMs (see Table 2 - note that there were insufficient observations to conduct these analyses with GSOEP ESMs). This income variable was also analyzed in continuous, log, and quadratic forms.

Table 2 . The range and number of person-year observations of the GSOEP Income 4 variable divided into 16 quantiles.

Omnibus F -tests and effect sizes ( n 2 ) are also reported to compare the categorical, continuous, log, and quadratic approaches.

We conducted lowess and spline regressions to further investigate possible nonlinearities in the relationship between income and happiness. For the lowess regressions, the smoothing parameter was set at of 0.08. For the regression splines, we fitted knots at four quartiles and five quantiles of income. We also used the results of OLS regressions treating income as a categorical variable, as well as the results of the lowess regression treating income as continuous, to fit knots at pre-specified values of income (where these analyses suggested there could be turning and/or satiation points).

Complete case analyses were conducted with 33,976 individuals in ATUS, 6,766 individuals in German DRMs, and 249 individuals in German ESMs. There was item-missing data in some samples (ATUS, 1.7% missing; GSOEP DRMs, 8.2% missing; GSOEP ESMs data, and 6.0% missing). We make analytical and not population inferences and therefore do not use survey weights ( Pfeffermann, 1996 ).

Results are presented without and with controls for demographic and diary characteristics. Following Kushlev et al. (2015) , Hudson et al. (2016) , and Stone et al. (2018) , these controls were age, gender, marital status, ethnic background, 2 health, 3 employment status, children, 4 and whether the day was a weekend. We also control for the year of the survey in ATUS DRM data to address the issue that our results are not due to new data but rather how we treat the income variable.

The list of variables we use in analyses are in Table 3 .

Table 3 . List of variables used in analyses in ATUS and GSOEP.

In both ATUS and GSOEP, daily happiness was analyzed using a 0–6 scale (in GSOEP scale points 1–7 were recoded to 0–6 to match ATUS). The ATUS mean happiness was 4.38 (SD = 1.33). The GSOEP DRM mean happiness was 2.91 (SD = 1.46), and the GSOEP ESM mean happiness was 2.65 (SD = 1.03).

The magnitude of our results can be considered in the context of effect sizes from other research on demographic characteristics and daily happiness ( Kahneman et al., 2004 ; Stone et al., 2010 ; Luhmann et al., 2012 ; Hudson et al., 2019 ). For example, the effect size for the relationship between age and daily experiences of happiness was 0.16 in Stone et al. (2010) . Our effect sizes range from 0.06 to 0.37. Throughout, we focus on coefficients, their 95% CIs, and visualizations of these coefficients and CIs, rather than on their statistical significance ( Lakens, 2021 ). The purpose of this is to highlight how analytic treatments of income affect the magnitude and precision of the relationship between income and happiness.

When treating the 16-category family income variable as continuous in OLS regressions, there was no substantive relationship between income and happiness as in other prior research ( Kushlev et al., 2015 ; Hudson et al., 2016 ; Stone et al., 2018 ). Out of the linear, squared, and log coefficients without and with controls, the largest and most precise coefficients were with controls; for linear income it was ( b  = −0.006, 95% CI = −0.01, −0.002), squared income ( b  = −0.0001, 95% CI = 0.0003, 0.00006), and log income ( b  = −0.03, 95% CI = −0.05, 0.001). The omnibus F -test (without controls) for linear income was F  = 0.28, n 2  = 0.000008 (95% CI = 0.00, 0.0002), for income squared was F  = 1.60, n 2  = 0.00005 (95% CI = 0.00, 0.0003), and for log income was F  = 0.23, n 2  = 0.000006 (95% CI = 0.00,0.0002).

The categorization of income focused attention on those with incomes of $35–40K, who appeared substantively happier than some of those with higher incomes (and lower incomes; see Figure 1 ). For example, with controls, those with incomes of $35–40K appeared happier relative to those with incomes of $150K+ ( b  = 0.16, 95% CI: 0.08, 0.24) and $100–150K ( b  = 0.14, 95% CI: 0.07, 0.221). The omnibus test for categorical income was F  = 1.61, n 2  = 0.007 (95% CI = 0.00, 0.0009).

Figure 1 . Predicted values of average individual happiness in the American Time Use Survey (ATUS) at the 16 values of the family income variable without and with controls. Covariates at means. 95% CI.

Results from regression splines and a lowess regression suggested null results overall (see Figure 2 ). Further details of the analyses are in Supplementary Material S2 .

Figure 2 . Line graph of predicted values from lowess regressions explaining variance in happiness from income treated as a continuous variable in ATUS.

When treating the continuous household income variable as continuous (in €10,000s) in OLS regressions, there was no substantive relationship between income and happiness as in other prior research ( Kushlev et al., 2015 ; Hudson et al., 2016 ; Stone et al., 2018 ). The association with the largest magnitude and most precision was for log income with controls ( b  = −0.08, 95% CI = −0.18, 0.01). 5

As in ATUS, treating the variable as categorical suggested some relationships between income and happiness. These results drew attention to those third quantile (~€14–18K), who seemed happier than those both higher and lower in income (see Figure 3 ). For example, with controls, they were happier than those in quantiles 13 (€42.6–48K, b  = 0.46, 95% CI = 0.25, 0.67), seven (~€24–27K, b  = 0.34, 95% CI = 0.13, 0.56), and one (€2.40–11,520K, b  = 0.28, 95% CI = 0.05, 0.51). The omnibus test for categorical income was F  = 4.00, n 2  = 0.009 (95% CI = 0.003, 0.01), whereas the omnibus test for linear income was F  = 0.09, n 2  = 0.00001 (95% CI = 0.00, 0.0007). The omnibus for log income was F  = 1.42, n 2  = 0.0002 (95% CI = 0.00, 0.0001) and for income squared it was F  = 0.96, n 2  = 0.0001 (95% CI = 0.00, 0.001).

Figure 3 . Predicted values of average person-year happiness from GSOEP DRMs at 16 quantiles of income (Income 4) without and with controls. Covariates at means. 95% CI.

The lowess and spline regressions suggested null results overall, as the coefficients were small in magnitude (see Figure 4 ). Further details of the analyses are in Supplementary Material S3 .

Figure 4 . Line graph of predicted values from lowess regressions explaining variance in happiness from income treated as a continuous variable in GSOEP DRMs at 16 quantiles of income.

There was no evidence to suggest any substantive association between income and happiness in ESM data for linear income, income squared, log income, in the lowess regressions, or regression splines. A visualization of the lowess results are in Figure 5 and further details of the analyses are in Supplementary Material S4 .

Figure 5 . Results of local linear “lowess” regression from GSOEP Experience Sampling Methodology (ESM) data with happiness as the outcome and continuous annual income as the explanatory variable.

The omnibus F -test for linear income was F  = 0.53, n 2  = 0.002 (95%CI = −0.00, 0.03), and for log income it was F  = 0.12, n 2  = 0.0005, 95%CI = 0.00, 0.02. For income squared it was F  = 0.63, n 2  = 0.003, 95%CI = 0.00 0.03.

Is income creating a signal in these data on daily experiences of happiness, or is it all simply noise? The present results suggest that whether income can be concluded as being associated with daily experiences of happiness may depend on how income is analyzed. When income in ATUS is analyzed in its original, categorical form, there is some evidence that some people with higher incomes feel somewhat less happy than some of those with lower incomes. When the continuous income variable in GSOEP is split into categories, a similar pattern is observed. This is not inconsistent with the findings of Kushlev et al. (2015) , Hudson et al. (2016) , and Stone et al. (2018) , who found no relationship between income and daily feelings of happiness in the same data when income was analyzed as a continuous variable. It simply illustrates that a relationship between income and happiness could be interpreted when treating income categorically rather than continuously.

There are at least three possible interpretations to our overall results. One interpretation tends toward conservative. We conducted multiple comparisons of many transformations of income, which might inspire some to question whether we should have accounted for this in some way by adjusting for multiple comparisons. Although we found some evidence of differences in happiness according to income, such an adjustment might lead to an overall null conclusion when characterizing the relationship between income on happiness. A second interpretation is more generous. Within this perspective, one might emphasize the fact that because our income measures were correlated, no correction for multiple comparisons was required. It could then be argued that because we found some evidence for the relationship between income on happiness, there is good evidence that the overall effect is not null. A more moderate perspective, and the one adopted in this paper, is that because the overall pattern of our results showed mixed null and nonnull results, we can make an overall conclusion of some differences in happiness according to income. We also noticed that equivalizing income in the German data strengthened the relationship of income and happiness, further supporting the conclusion of some differences—and that the analytic treatment of income matters.

Based on the moderate perspective, we conclude that there is very little evidence of any relationship between income and daily experiences of happiness—and any relationship that does exist would suggest higher income could be associated with less happiness. The results do not support the results of Sacks et al. (2012) or Killingsworth (2021) , where a greater income was associated with greater happiness, and there were no satiation or turning points (see also Stevenson and Wolfers, 2012 ). These results are more aligned with Kahneman and Deaton (2010) , who found a satiation point in the relationship between income daily experiences of happiness, researchers finding no association between income and happiness ( Kushlev et al., 2015 ; Jebb et al., 2018 ; Casinillo et al., 2020 , 2021 ), who found that higher income can be associated with worse evaluations of life. We suggest the analytic strategy for income could contribute to explaining discrepant results in existing literature, and researchers should be clear about the approaches they have tested, although we acknowledge that sampling differences could play a role, too.

Overall, the results were broadly consistent between countries because there was no substantive relationship between income and happiness when income was treated continuously but there appeared to be relationships when treating income categorically. Despite a similar overall pattern in the income results, there were other difference between countries. German residents rated their happiness as lower than United States residents (a difference of ~1.5 scale points out of seven). This could be because of different interpretations of the word “happiness” in Germany and the United States. The word for happiness in German used in the survey— glück —can mean something more akin to lucky or optimistic—which is different from the meaning of word “happy” in the United States. Despite this linguistic difference, those with higher incomes were still less happy than some of those with lower incomes in both samples.

Limitations

One limitation to our results is the representativeness of the income distribution. Household surveys like those that we used do not tend to capture the “tails” of the income distribution very well: People in institutions and without addresses are excluded from these sample populations, which omits populations such as those living in nursing homes and prisons, as well as the homeless. Moreover, people do not always self-report their income accurately due to issues such as social desirability bias ( Angel et al., 2019 ). Existing studies that have focused on those with very low incomes do tend to find that low income is associated with low happiness ( Diener and Biswas-Diener, 2002 ; Clark et al., 2016 ; Adesanya et al., 2017 ). In ATUS, the highest household income value available was $150K, whereas in GSOEP it was €360K. Thus, it is not always clear whether the very affluent, such as millionaires, are represented in these samples ( Smeets et al., 2020 ). Overall, our results cannot be taken as representative of people who are very poor or rich and should not be interpreted as such.

Another limitation is that the present results cannot be interpreted casually because there has been no manipulation of income in these data nor exploration of mechanisms and there was no longitudinal data in ATUS. As discussed by Kushlev et al. (2015) , there are issues such as reverse causality. Here, however, some of our results potentially suggest an alternative reverse causality pathway, whereby less happy people may select into earning more income. Because the counterfactual is not apparent—we do not know how happy people with high incomes would be without their higher income—it could also be that those with high incomes would be even less happy than they currently are if they had not attained their current level of income. In other words, people with high incomes may have started out as less happy in the first place and be even less happy if they did not have high incomes.

A further limitation is the time period of the data, especially that they were collected prior to the COVID-19 pandemic. This could be an issue because it is possible that the relationship between income and daily experiences of happiness has changed, such as due to the exacerbation of health inequalities and restrictions on freedom of movement due to nationwide lockdowns. Our study does not provide any information on the longer-term and health and well-being consequences of both COVID-19 itself and the policy response to COVID-19 ( Aknin et al., 2022 ). As one example, access to green space, which has health and well-being benefits, is lower among those with low income, and this mechanism between income and happiness may have become more salient during COVID-19 ( Geary et al., 2021 ). Overall, it is important to consider the regional, political, and socioeconomic contexts in which income is attained to understand its relationship with well-being, including levels of income in reference groups such as neighbors, friends, and colleagues ( Luttmer, 2005 ; De Neve and Sachs, 2020 ). It would be important to replicate the results in this research with more recent data to address the limitation that the data we used are not recent, considering our broader point that the measurement and analysis of income should be considered as carefully as the measurement and analysis of happiness.

Future Directions

This research points to several directions for future research. One direction relates to data and measures: Nonlinearities in the relationship between income and happiness could be examined using time use data from other countries, considered between countries and/or within countries over time ( Deaton et al., 2008 ; De Neve et al., 2018 ), and investigated for measures of emotional states other than happiness ( Piff and Moskowitz, 2018 ). In general, our results suggest that researchers should pay attention to how income is measured and analyzed when considering how it is related to happiness, which complements findings from other research that the way happiness is measured and analyzed is important ( Kahneman and Deaton, 2010 ; Jebb et al., 2018 ).

Future research could also explore mechanisms that may explain our findings. In addition to those mentioned in the Introduction—expectations ( Graham and Pettinato, 2002 ; Nickerson et al., 2003 ), time use ( Aguiar and Hurst, 2007 ; Hamermesh and Lee, 2007 ; Bianchi and Vohs, 2016 ; Nikolaev, 2018 ; Sharif et al., 2021 ); generosity ( Dunn et al., 2008 ; Kraus et al., 2010 ; Piff et al., 2010 ; Aknin et al., 2012 ; Balakrishnan et al., 2017 ; Macchia and Whillans, 2022 ), and sense of self ( Snibbe and Markus, 2005 ; Stephens et al., 2007 )—another is the identity-related effect of transitioning between socioeconomic groups. Though one might expect upward mobility to be associated with greater happiness, research suggests that some working class people do not wish to become upwardly mobile because it could lead to a loss of identity and change in community ( Akerlof, 1997 ; Friedman, 2014 ). Indeed, upward intergenerational mobility is associated with worse life evaluations in the United Kingdom—though not in Switzerland ( Hadjar and Samuel, 2015 ), although recent findings show substantial negative effects of downward mobility, too ( Dolan and Lordan, 2021 ). Over time, therefore, the degree of mobility in a population could influence the relationship between income and happiness in both positive and negative directions.

Additionally, social comparisons could drive the effects of higher income on happiness. Higher income might not benefit happiness if one’s reference group—that is, the people to whom we compare or have knowledge of in some form ( Hyman, 1942 ; Shibutani, 1955 ; Runciman, 1966 )—changes with higher socioeconomic status. As income increases, people might compare themselves to others who are also doing similarly or better to them, and then not feel or think that they are doing any better by comparison—or even feel worse ( Cheung and Lucas, 2016 ). This is one of the explanations for the well-known “Easterlin Paradox” ( Easterlin, 1974 ), which suggests that as national income rises people do not become happier because they compare their achievements to others. The paradox is debated ( Sacks et al., 2012 ). Additionally, some research shows that it is possible to view others’ greater success as one’s own future opportunity and for upward social comparisons to then positively impact upon well-being ( Senik, 2004 ; Davis and Wu, 2014 ; Ifcher et al., 2018 ). As with the role of mobility in the relationship between income and happiness, it is unclear whether the role of social comparisons would create a positive or negative impact over time and future research could explore this.

Final Remarks

Overall, our results provide some evidence that individual attainment in terms of income may not equate to the attainment of individual happiness—and could even be associated with less daily happiness, depending upon how income is measured and analyzed. These results suggest that how income is associated with happiness depends on how income is measured and analyzed. They provide some support to the idea that financial achievement can have both costs and benefits, potentially informing normative discussions about the optimal distribution of income in society.

Data Availability Statement

Publicly available datasets were analyzed in this study. These data can be found at: https://www.atusdata.org (The ATUS extract builder was used to create the ATUS dataset, see Hofferth et al., 2017 ). GSOEP data were requested from https://www.diw.de/en/diw_02.c.222516.en/data.html , see Richter and Schupp, 2015 .

Ethics Statement

Ethical review and approval was not required for the study on human participants in accordance with the local legislation and institutional requirements. Written informed consent from the participants’ legal guardian/next of kin was not required to participate in this study in accordance with the national legislation and the institutional requirements.

Author Contributions

LK and KK contributed to conception and design of the study. LK organized the data, performed the statistical analysis in STATA, and wrote the first draft of the manuscript. KK performed additional statistical analysis in jamovi and wrote sections of the manuscript. All authors contributed to the article and approved the submitted version.

LK was supported by a London School of Economics PhD scholarship during early work and later by the National Institute for Health Research (NIHR) Applied Research Collaboration (ARC) West Midlands. The views expressed are those of the author(s) and not necessarily those of the NIHR or the Department of Health and Social Care.

Conflict of Interest

The authors declare that the research was conducted in the absence of any commercial or financial relationships that could be construed as a potential conflict of interest.

Publisher’s Note

All claims expressed in this article are solely those of the authors and do not necessarily represent those of their affiliated organizations, or those of the publisher, the editors and the reviewers. Any product that may be evaluated in this article, or claim that may be made by its manufacturer, is not guaranteed or endorsed by the publisher.

Acknowledgments

LK thanks Professor Paul Dolan and Dr Georgios Kavetsos for their support early on in conducting this research, as well as Professor Richard Lilford for insights about multiple comparisons.

Supplementary Material

The Supplementary Material for this article can be found online at: https://www.frontiersin.org/articles/10.3389/fpsyg.2022.883137/full#supplementary-material

1. ^ https://www.atusdata.org

2. ^ In the ATUS this was Hispanic and Black, in GSOEP this was German origin.

3. ^ In the ATUS this was whether the respondent had any physical or cognitive difficulty (yes/no), in GSOEP this was self-rated general health (bad, poor, satisfactory, good, and very good).

4. ^ In the ATUS this was presence of children <18 years in the household, in GSOEP this was number of children.

5. ^ This association was stronger and more precise when equivalizing income (dividing by the square root of household size), b  = −0.16, 95%CI = −0.06, −0.27, underscoring the importance of transparency in the treatment of income.

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Keywords: happiness, measurement, time use, income, methodology

Citation: Kudrna L and Kushlev K (2022) Money Does Not Always Buy Happiness, but Are Richer People Less Happy in Their Daily Lives? It Depends on How You Analyze Income. Front. Psychol . 13:883137. doi: 10.3389/fpsyg.2022.883137

Received: 24 February 2022; Accepted: 08 April 2022; Published: 31 May 2022.

Reviewed by:

Copyright © 2022 Kudrna and Kushlev. This is an open-access article distributed under the terms of the Creative Commons Attribution License (CC BY) . The use, distribution or reproduction in other forums is permitted, provided the original author(s) and the copyright owner(s) are credited and that the original publication in this journal is cited, in accordance with accepted academic practice. No use, distribution or reproduction is permitted which does not comply with these terms.

*Correspondence: Laura Kudrna, [email protected]

Disclaimer: All claims expressed in this article are solely those of the authors and do not necessarily represent those of their affiliated organizations, or those of the publisher, the editors and the reviewers. Any product that may be evaluated in this article or claim that may be made by its manufacturer is not guaranteed or endorsed by the publisher.

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Money and Happiness in Poor and Wealthy Societies Essay

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Introduction

Positive correlation between happiness and money, insignificant correlation between happiness and money, works cited.

Many societies believe that money does not buy happiness. However, others affirm the contrary belief by saying that income levels affect people’s happiness. Before delving into the details of these perceptions, it is important to understand that happiness is an emotional or mental state where people experience more positive than negative feelings. These feelings outline how people interact with different stimuli, such as income, to influence their happiness. People experience different emotional effects through such stimuli. The positive and negative effect refers to the effects that varying income levels have on people’s feelings and emotions. In detail, a positive effect refers to the extent that a person experiences positive moods (such as joy and interest), while negative affect refers to negative emotions (such as anxiety, sadness, and depression) that most people experience from varying income levels.

Using the above definitions, happiness, and emotional outcomes, Kesebir and Diener (117) say unsurprisingly different researchers have investigated the relationship between happiness and money. Indeed, many societies believe that life is not about (merely) living, but living a fulfilling and happy life (quality life). This realization has caused many philosophers to explore different ways of rising above the mere existence of life to a more fulfilling purpose of living.

Comprehending the motivations for pursuing money and happiness is the key to understanding this correlation. In this paper, I argue that wealthy and poor societies have different relationships between money and happiness. In detail, after exploring different types of correlation between the two variables, I explain that the relationship between both variables is strong in low-income societies, but it gradually weakens as income increases (especially in wealthy societies). Based on this understanding, money affects happiness to a limited extent. Indeed, beyond the satisfaction of basic human needs, other non-monetary factors, such as social relationships, have a more significant correlation with happiness than money does.

The positive correlation between money and happiness mainly exists in low-income societies. The utilitarian philosophies of the modern era affirm this relationship (Kesebir and Diener 117). However, their influences stem from common beliefs in the 19 th century (and beyond), which equaled happiness to utility (utility refers to the ability of material possessions to satisfy human needs and wants). Using the relationship between happiness and utility, many medieval societies believed the latter was equal to human pleasure (Kesebir and Diener 117). Jeremy Bentham and Aristotle (among other philosophers) supported this view by saying that most people should strive to experience more pleasure than pain (as a measure of their happiness) (Kesebir and Diener 117). They also argued that different societies should use this basis for understanding morality and legislation (Kesebir and Diener 117).

As many societies embraced this idea, the medieval conception of happiness, as a function of virtue and perfection, disappeared (Kesebir and Diener 117). People started to see material possessions as more important than gaining respect from society (by practicing good morals and virtues). Similarly, this ideological shift made it uncommon for many people to focus on issues of human well-being (human well-being closely associates with happiness because it refers to a state of health or prosperity) (Kesebir and Diener 117). Therefore, their focus shifted to material possessions as a measure of happiness.

In line with the above argument, Aristotle argued that wealth was an important requirement for happiness. Easterlin (3) shared the same view by explaining America’s perception of happiness. He said many US citizens perceived happiness through “material” lenses. The Easterlin (3) paradox summed this view by showing that income had a direct correlation with happiness. It based this argument on several cross-national studies, which showed that rich people were happier than poor people were. For example, in a 1970 American study, Easterlin (4) found out that less than one-quarter of low-income people believed they were “happy” people. Comparatively, about double this number of respondents (in the high-income group) said they were happy. The same findings appeared in more than 30 similar researches conducted in other parts of the world. Although the same study established a correlation between happiness and education, health, and family relationships, income emerged as having the strongest and most consistent relationship with happiness (Easterlin 4).

Although Easterlin (3) used the above findings to support the correlation between income and happiness, he said increasing everybody’s income weakened the correlation between both variables. Therefore, income variations affected people’s perceptions of happiness (people always judge their happiness based on what their peers think of them). Lane (57) supported these views when he said that most people often adjusted to a new standard of measuring their happiness whenever they increased their income levels (the desire for money tapers off as income increases). Using this analogy, Easterlin (5) believed that wealthy nations were no happier than poor nations. Based on the same logic, he said that people’s subjective perceptions of happiness depended on their welfare perceptions (Easterlin 5).

Therefore, as opposed to perceiving their happiness through “material” lenses, they did so by understanding how it compared to their social norms. Consequently, people who are above the “norm” feel happier than those who are below it (how people perceive the social norm depends on the economic well-being of the society).

Although Easterlin (5) argued that happiness was subjective to the national income (as shown above), researchers who have conducted studies that are more recently told that the correlation between happiness and well-being was stronger than his paradox showed. Consequently, they revised this model by saying that increased national income affected the overall sense of individual well-being in a country. Unlike the data relied on Easterlin (4), researchers established the above fact, using findings that are more reliable. For example, Lane (56) quoted the findings of a 1976 transnational study, which showed that a nation’s poverty index affected the well-being of its citizens (such as people’s attitudes, feelings, and perceptions). These studies showed that personal satisfaction increased with increased levels of economic development (money “bought” happiness).

Money has an insignificant correlation with happiness in wealthy societies. This is an old view of this relationship because philosophers from ancient Greece started exploring this insignificant correlation in 370 BC (Kesebir and Diener 118). They said material wealth had an indirect correlation with happiness. Based on this understanding, they believed that a man’s mind defined his level of happiness. Similarly, they believed it was difficult for people to be happy if they lacked morals and virtues (money was not a priority). Democritus and Epicurus (two ancient Greek philosophers) mainly advanced this view (Kesebir and Diener 118).

Similarly, other ancient Greek philosophers, such as Socrates and his student, Plato, refuted the claim that happiness depended on the “enjoyment” of beautiful and good things. They believed that all people needed to show prudence and honor to be happy (Kesebir and Diener 118). Lane (56) has also reported the same findings after analyzing the relationship between money and happiness in a contextual approach. Like, Easterlin (3), he said in many developed countries, money did not increase happiness levels. Frank Andrews and Stephen Withey (cited in Lane 58) also supported these findings when they said that different socioeconomic groups showed small differences in people’s well-being. They also said that income levels had an insignificant impact on life as a whole.

The above findings show the different correlations between income and happiness. However, I believe this limited correlation mainly emerges in wealthy societies, as opposed to low-income societies. For example, non-monetary issues have a strong correlation with happiness in wealthy societies. Economists also affirm this fact through the Maslow hierarchy of needs because they say people crave for higher-level needs, such as love, social relationships, and recognition after they have met their primary needs such as food, shelter, sex, and clothing. Since many people in wealthy societies do not struggle to meet basic human needs, the insignificant correlation between happiness and money applies to this group of people.

Some philosophers maintain a “middle ground” by supporting the limited influence of money on happiness. Epicureans also supported this view because they said wealth was important to people’s happiness, to the extent that it gave people their basic needs, like shelter and clothing (Kesebir and Diener 118). However, beyond this threshold, it had an insignificant relationship with happiness. This analysis affirms the different correlations between happiness and income across poor and wealthy nations. Indeed, Kesebir and Diener 117) say there is a strong correlation between happiness and income in low-income countries, while wealthy economies experience an insignificant correlation between the two variables. A comparative study conducted in America revealed that the wealthiest Americans (profiled in Forbes) were only modestly happier than middle-income and low-income control groups that lived with them in the same location (Lane 58).

Based on the above analysis, income is not the only variable that affects happiness. Non-monetary issues affect happiness too. Lane (58) supports this argument by highlighting the need to distinguish individual pleasures from human well-being issues. Individual pleasures may depend on income, but people’s well-being is subjective. Therefore, besides income, other factors affect people’s happiness. To support this view, Lane (58) cited a 1982 study (conducted by Gallup), which asked Americans what made them happy (Lane 58). The respondents said family relationships made them happier than money did. Other things that made them happy included television, friends, reading books (and other pleasures) that most people from low-income families could afford (Lane 57).

Therefore, income does not solely define happiness. This analysis shows that although most people need to have adequate money to be happy, money, in isolation, is not sufficient to guarantee happiness, beyond providing basic needs. In the book, Happy People , Jonathan Freedman (cited in Lane 57) affirmed the above fact by saying that rich and poor people have different perceptions of the role of wealth in increasing people’s happiness levels. Overall, while many rich people understand that wealth does not automatically guarantee happiness, people from low-income societies believe it does. This was similarly true for their perceptions of well-being. Therefore, when a person is extremely poor, money looks like a “savior” of some sort, but as income increases, this idea disappears. This analogy has stronger merit than the general perception that money “buys” happiness. Indeed, not all happy people are rich. In this regard, many human societies have focused so much on material wealth that they have forgotten. It does not guarantee happiness.

After weighing the findings of this paper, easily, a person could affirm an indirect relationship between happiness and income. Some researchers say money has a direct relationship with happiness, while others do not affirm this relationship. This inconsistency stems from the contextual appeal of income and wealth to human societies. For example, income has a weak correlation with happiness in wealthy societies. However, this relationship is stronger in low-income societies. Evidence also shows that there was a weak correlation between income and happiness in medieval societies because many people believed adhering to human virtues made people happy (this was the medieval standard for happiness).

However, the modern era changed this perception and shifted the societal focus from virtues and morals to material wealth. Now, people attach more value to income and similar “material” factors. However, as changes to the Easterlin (3) paradox suggest, wealth increases happiness to a limited extent. Overall, this paper shows that income and happiness have a “contextual” relationship. For example, if there is a broad increase in income across a nation, this correlation weakens (the Easterlin (3) paradox mainly supports this view); however, as income levels decrease, the correlation strengthens. Consequently, there is a strong correlation between money and happiness in low-income societies. In wealthy societies, non-monetary factors like health and the quality of family relationships have a stronger impact on happiness than money does.

Easterlin, Richard. “Does Money Buy Happiness?” Public Interest 30.3 (1973): 3-10. Print.

Kesebir, Pelin and Ed Deiner. “In pursuit of happiness: Empirical Answers to Philosophical Questions.” Perspectives on Psychological Science 3.2 (2008): 117-123. Print.

Lane, Robert. “Does Money buy Happiness?” Public Interest 113.3 (1993): 56-65. Print.

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IvyPanda. (2020, May 26). Money and Happiness in Poor and Wealthy Societies. https://ivypanda.com/essays/money-and-happiness-in-poor-and-wealthy-societies/

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Analytical Essay: Should We be Rich to be Happy?

Lots of people play the lottery and try and find other ways of winning money, while other focus on money when choosing their career and planning their lives. This is because people believe that being rich will make you happy. This essay will explore if money does make you happy, and if it is possible to be happy without it.

It is true that having plenty of money provides you with financial stability, and this means less stress and worry in your life. People with plenty of money don’t have to worry about how they will pay the bills or put food on the table for the money, and a lack of these worries is certainly conducive to happiness. Furthermore, wealthy people are able to buy lots of nice things and indulge themselves and their loved ones, spending money on the things that make them feel happiest, be it clothes and shoes, eating out, or nice holidays.

Then you have to consider that rich people may have no need to work, or work as much, and certainly won’t find themselves having to do a job they absolutely loathe just to make enough to live on. They tend to have much more leisure time, and can be stay at home parents much more easily when their children are born, and spend school holidays with their children too if they wish too. Poorer people don’t usually have this option, and feel that they would be much happier if they had more time to spend with their family.

There is much more to happiness than simply having lots of money, even for people who really do love money, and it is the things that we can do with money that is generally the source of happiness for most people, not the fact of having lots of money. It is for this reason that rich people can often be very unhappy, because if they have nothing good to spend it on, their money is pointless. Wealthy people with no friends or family are usually at least as miserable as poor people with no friends or family, and often worse. People who suddenly win lots of money can actually lose their loved ones, as people may not treat them the same anymore, or take advantage of them.

Overall, not having the stresses of poverty and financial difficulty does make it easier for people to be happy with their lot on life. However, wealth is definitely not an essential requirement for happiness as plenty of poor people all over the world are happy, and there are plenty of unhappy rich people. Therefore, being rich could help you to be happy but it is not a prerequisite or a guarantee of happiness.

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Is It Better to Be Poor and Happy or Wealthy and Miserable?

This is a question only poor people ask because wealthy people never think these are their options.

When coaching people on wealth creation, it is amazing for me every time to discover how strongly people who are not wealthy believe that this question is valid.

Don’t get me wrong. I came from a simple family, where my mom and dad both worked hard, very hard, at more that one job, to provide for 5 children. When my clients discuss this, I know what they are talking about because we had such discussions around our dinner table.

People who do not have “enough” money (90% of our society) have some beliefs that support their identity as “poor”, “struggling”, “cannot have what we want”. Here are some of them:

• Rich people make their money at the expense of poor people
• Rich people were born rich
• Rich people have a miserable life
• Rich people do not care about others
• Rich people are greedy and stingy
• Rich people do not have a life, only work
• Rich people cannot sleep at night

And there are many more.

Since my field of expertise is happiness, I am most interested in the belief “Rich people do not have a life”. Poor and happy vs. wealthy and miserable?

A research from the University of Virginia, the University of Illinois and Michigan State University of 193 undergraduate students at Illinois discovered that happiness and wealth have only a one way connection.

The study found that in general, wealthier students were happier or at least were higher in their own happiness ratings. For most, the measurements of happiness included success in money, employment and relationships.

“Happy people are more likely to get married, are more likely to stay married and are more likely to think their marriage is good”, said Professor Ed Diener, an author of the study. “They are more likely to volunteer, they are more likely to be rated highly by their supervisor and they are likely to make more money”.

“Happy people are also, on average, healthier than unhappy people and they live longer”, Diener said.

Happiness, as you can see, can help a lot in your marriage, your health and with your money. But I could tell you that without the study. The wonderful part of that research is that they found that it only goes one way. While happiness helped people make more money, money did not make them happy.

You see, money is a magnifier. It cannot make you anything you are not already. It only takes the person you are and enlarges it. If you are happy it can make you happier, but if you are not happy, money is going to make you even unhappier.

If you have good relationships, with money, you will have even better relationships but it will not fix any broken relationship you may have.

If you are a caring person, with money, you will care even more but if you are not a caring person, having money will not turn you into a caring person.

If you have a life, with money, you will have more in life but if you are miserable and do not find joy and fun in your life, even lots of money will not help you find them.

Happiness and money are linked only in one direction.

Find happiness first! It is the simplest, fastest, cheapest, healthiest way to the bank!

Be happy, Ronit

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Rich And Unhappy vs Poor and Happy

The following sample essay on Rich And Unhappy discusses it in detail, offering basic facts and pros and cons associated with it. To read the essay’s introduction, body and conclusion, scroll down.

* Choosing a career that pays well, but makes a person unhappy, and choosing a career that  makes a person  happy,but does not pay well. What is the purpose of life? What is the one thing that truly matters in order to experience a meaningful, gratifying existence? Some people might say that love and happiness are all one needs in order to live a fulfilling life, where no amount of materialistic wealth will amount to the same level of contentment as a life where one’s career is something that one strongly believes in and has passion for.

Others, however, might argue that the only path to an enjoyable life is when one is able to live luxuriously. To have the finest, rarest, most expensive items or clothing is to have value and importance in society, which in turn, makes life worth living.

In order to reach this stage, necessary steps need to be taken even if it causes unhappiness doing so.

Choosing a career that ensures a generous paycheck will guarantee a life filled with materialistic commodities, but it doesn’t guarantee the benefits of a career that entices them, such as the drive or desire to work and the gratification one feels that might affect their emotional well being for the better. Yet, Choosing a career that sparks interest and passion guarantees a feeling of fulfillment but may not guarantee a substantial enough pay to enjoy some of society’s luxuries, such as the ability to travel or not having to worry about putting food on the table which otherwise might lead to stress that is harmful to one’s health.

Proficient in: Apathy

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Issues with Choosing a Career

In a perfect world, everyone would be able to choose a career that houses both aspects, but alas, that is not the way the world works. Should one choose a career that pays well, but makes one unhappy? Or should one choose a career that makes one happy, but barely pays the rent. A life filled with the luxuries that our society provides can be seen by many to be a much-desired way to live. For them, the end result overcomes the means to get there, such as a stressful, unrewarding career who’s only redeeming aspect is a substantial paycheck.

The ability to purchase the materialistic objects of ones desires, such as a fancy car, or a big house, is enough for some people to put themselves through school in a programme that doesn’t stimulate them emotionally, or intellectually. Nevertheless, with the disposable income, one would be able to take part in activities outside of work that is enjoyable and stimulating, like traveling or going to various cultural events that are out of reach for those with lower incomes.

However, while one may be enjoying life outside of work, the harsh reality is that one spends the majority of the week at ones job, so in reality, a huge portion of one’s life is spent in apathy and indifference if the work doesn’t invoke any sort of enjoyment. As this continues over the years, depression is likely to follow due to the constant dread and lethargy that goes along with the job, and the realization that it will be like that day in and day out for years to come.

For those who choose this way of life, happiness equates to the number of possessions they gained with their hard earned money, regardless of the mundane work they had to go through in order to achieve it, unless of course, they realize they made a huge mistake choosing money over their actual dreams and aspirations when its already too late. Other people have a completely different view of life as the ones who value money in high regard.

These people see the benefits of a life filled with things that give them satisfaction, with the choice of career being a huge component of it. When one decides to spend the rest of ones life doing something that one is passionate and excited about, the wage it garners wouldn’t be high on one’s list of concerns, especially if it means that waking up every morning wouldn’t be such a dreaded daily event. The mere thought of spending another day doing something one enjoys is enough to keep one motivated throughout the longevity of their career.

There are a few instances however, that may cause certain hesitation. For example, a young aspiring artist might be satisfied with a one-bedroom that doubles as their studio while eating ramen noodles for breakfast, lunch and dinner for now, but what if down the road they decide they want to settle down and have a family before they are able to make a profit from their art, which might not never even happen in the first place? The pressure of this realization and the constant worry of having to make ends meet could be detrimental down the line.

Soon, the joys that the job brings could be overshadowed by the stress produced by this situation. Fortunately, most people that choose to go down this path are able to make ends meet and are content with living in the simplest terms as long as their lives revolve around the career of their liking. The decision of choosing which career path to take is probably one the most important, tear-inducing decisions a person has to make in their lifetime. It will dictate the way their life will go from that day forward nd the means on which they must live by. Whether it is a career that will bestow significant financial gain, or a career that will bestow significant personal gain, the decision rests on the personal opinions of the individual’s definition of a happy life. Even though this decision is entirely subjective, there is a stat that is worth mentioning; over a third of an average person’s life is spent working. Is being able to by the latest Prada really worth hating a massive part of one’s existence?

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Sample essay: does money bring happiness?

Ielts essay prompt.

Some people believe that money brings happiness; others are of the opinion that having too much money is a problem. Discuss both views and give your own opinion.

Sample response

There is a limit to the amount of money that we can spend on ourselves. Still, the richest among us have amassed wealth they or their progeny will never use in their lifetime. Still, they aren’t satisfied. They want more. That is the lure of money. It never makes people content. Those who don’t have it want to have it. Those who have it want to have even more of it. Unfortunately, in our pursuit of riches, we often forget to live. We forget to appreciate the little joys that make our lives worth living.

Having a lot of money is definitely a problem. It even threatens our safety and security and makes us the target of thieves. Look at the richest people. They can’t move around freely like you or I. They are always surrounded by their personal security guards and often live their entire lives in constant fear of getting attacked.

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Guest Essay

It’s Not You: Dating Apps Are Getting Worse

By Magdalene J. Taylor

Ms. Taylor is a writer covering sex and culture.

“The golden age of dating apps is over,” a friend told me at a bar on Super Bowl Sunday. As we waited for our drinks, she and another friend swiped through Bumble and Hinge, hunting for new faces and likes. Across the bar were two young men: phones out, apps open, clearly doing the exact same thing. Never did the duos meet.

What’s lamentable here isn’t only that dating apps have become the de facto medium through which single people meet. Since 2019, three in 10 U.S. adults have reported using them, with that figure rising to roughly six in 10 for Americans under 50 who have never been married. Not only are people not meeting partners in bars or any of the once normal in-person venues — they’re barely meeting them on the apps, either.

Maybe most of us just aren’t as hot as we used to be. Maybe it’s time our inflated egos got knocked down a notch. Maybe the market of people still willing to put themselves out there in an attempt to date has gotten smaller. Or maybe the apps have functionally, intentionally gotten worse, as have our romantic prospects. The more they fail to help us form relationships, the more we’re forced to keep swiping — and paying.

The internet, where so many of us spend so much of our time, has not been spared from the decline in quality that seems to plague so much of consumer life. This phenomenon was described by the writer Cory Doctorow in a November 2022 blog post and is sometimes called “platform decay”: Tech platforms like Amazon, Reddit and X have declined in quality as they’ve expanded. These sites initially hooked consumers by being almost too good to be true, attempting to become essential one-stop shops within their respective spaces while often charging nothing, thanks to low interest rates and free-flowing venture capital funding . Now that we’re all locked in and that capital has dried up, those initial hooks have been walked back — and there’s nowhere else to go.

This is precisely what is happening with dating apps now, too, with much more urgent consequences. What’s worsening isn’t just the technological experience of online dating but also our ability to form meaningful, lasting connections offline.

The collapse of dating apps’ usability can be blamed on the paid subscription model and the near-monopoly these apps have over the dating world. While dozens of sites exist, most 20-something daters use the big three: Tinder, Hinge and Bumble. (Older people often gravitate toward Match.com or eHarmony.) All three sites offer a “premium” version users must pay for — according to a study conducted by Morgan Stanley , around a quarter of people on dating apps use these services, averaging out at under $20 a month. The purpose, many believe, is to keep them as paid users for as long as possible. Even if we hate it, even if it’s a cycle of diminishing returns, there is no real alternative.

Have you ditched dating apps for a new way to meet people, or are you still swiping left?

Opinion wants to hear your story.

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Wealth does not necessarily guarantee happiness. To what extent do you agree with this statement?

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Some people say that protecting the environment is the government’s responsibility. Others believe that every individual's responsibility for it. Discuss both views and give your opinion.

Some people believe that professionals, such as doctors and engineers, should be required to work in the country where they did their training. others believe they should be free to work in another country if they wish. discuss both these views and give your own opinion., some people think the news has no connection to people's lives, so then it is a waste of time to read the news in the newspaper and watch television news programs. to what extent do you agree or disagree, some people think that it's a good idea to socialise with work colleagues during evenings and weekends. other people think it's important to keep working life completely seperate from social life. discuss both views and give your opinion., today's young generation is facing many problems in school and at home. what are the problems what can parents do to help their teenage children.

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Italy's PM Meloni comes out on top in EU vote, strengthening her hand

Prime Minister Giorgia Meloni's arch-conservative Brothers of Italy group won the most votes in the European parliamentary election over the weekend, boosting her standing both at home and abroad.