Why is it that we all desire to have more money?
Money can provide opportunities for us like never before. However, when we do end up with a higher income, why is it then that happiness is not necessarily a result?
The fact that we know that money can’t buy happiness doesn’t seem to help. Most people continue to have the desire to create a higher income.
I wanted to flip the notion that money doesn’t buy happiness on its head, and show you how happiness can lead to more cash in your hand.
And it’s really quite simple… let’s take a look.
Money CAN Buy You Happiness
Money can lead to happiness.
With money, you have more options. You have more choice in what you can do with your time and energy. When you are out for dinner, you can decide to go to the super-expensive restaurant and pick the most expensive meal without feeling guilty. When you are buying a new car, you are able to get the one that you have always dreamed of – brand new, in black and with all the bells and whistles you have ever dreamed of. When you need a break, why not go on that holiday to Fiji that you have always been dreaming? You have the money.
Spending money on more expensive items now is simply a form of short-term, instant gratification. Longer-term, delayed gratification can result in greater happiness.
Although I am 28 and do not have any children yet, I prefer not to spend my days blowing my cash, having expensive nights out and going on exhaustive long holidays as many others my age like to do. You’re probably asking ‘why’ as normally I talk about doing what you love and doing it more often. That is true, however I also talk a lot about having a plan in place and delaying gratification to create sustained happiness.
What makes me happy is actually knowing that I am building a life where I can support my wife and my children in the future. What makes me happy is knowing that I will be able to retire, financially sound so I can spend my old-age worry-free and enjoying the experience of watching my grandchildren grow.
It’s perceived by many that more money can help in creating this life. However, there is interesting research that has showed otherwise.
The Evidence that More Money Does NOT Lead to Increased Happiness.
Known as the world’s most influential living psychologist, Daniel Kahneman during his TED talk in 2010 makes note of studies that have shown that earning less than $60,000USD per year can have a significant effect on your happiness levels. Simply put (and apologies if this offends anyone), the less you earn under this, the more unhappy you will be. However, when it comes to earning more than $60,000USD per year, Daniel Kahneman notes that it is the flattest line he has ever seen. There is absolutely no correlation between more income and more happiness.
Here’s a little graph to show you a rough guide to what this would look like.
This is obviously a very generalised example, but it helps to convey the message. I highly recommend that you watch Daniel Kahneman’s TED talk. It has been viewed 1.3 million times at the time of writing this and explains some amazing concepts around experiences versus memories and its effect on our happiness.
Simply put, money can’t buy happiness. So why do we all strive for higher incomes when psychological studies have proven that income has little effect on happiness levels? We all have that perception that ‘I will be happier if I just had that little bit more’.
Let’s flip this concept around on its head.
How Happiness Can Help You Generate More Money
Money can’t buy you happiness… but happiness can get you more money!
A few months ago I shared with you the Happiness Model.
Quite simply, happiness leads to greater performance which can eventuate it greater rewards. Let’s refresh what the Happiness Model looks like.
The Happiness Model
Psychological studies have shown that greater happiness, wellbeing and positivity can lead to greater performance. This is through having a more optimistic and positive outlook as well as thinking with ‘clarity’.
In whatever activity you are undertaking, you are more likely to be successful when you are in this state of happiness and performing at a higher level. What does this bring? This then brings the rewards that you are after. This can be both monetary and non-monetary. Perhaps it is simple recognition from your manager at work and getting a pat on the back. Alternatively, it might lead to hitting your sales targets and achieving your bonus, or a greater prospect of getting a promotion.
The more sustained and consistent your happiness and positive outlook the greater performance and the more successful you will be in your pursuits.
In my role, I am responsible for the processes of developing and motivating the talent (people) in our workforce to ensure greater performance, productivity and overall bottom-line results. This is done through a number of methods such as:
- Providing a competitive salary
- Providing stretch targets linked to a bonus
- Creating a supportive and positive culture
- Providing a suite of benefits that cater to the individual needs of different employees
- But most importantly, providing meaningful work
If you’re coming to work engaged and excited each day then you’re going to be more productive and more successful in what it is that you’re doing.
This is no different in your personal life.
What do you spend your time doing? What are your hobbies and your interests? What excites you?
More often thvan not, the things that interest and excite you are the things that you are generally better at. This is not by chance. This is due to the fact that you’re in a more positive state of mind when you’re undertaking these activities.
To summarise the points above, if you do what you love, you will generally perform better and you will reap the rewards. Not only will you be more wealthy both in monetary and non-monetary forms, you will also be living a more fulfilling and happy life.
You have to love what you do.
Get out into the world and enjoy what’s around… there is a world of opportunity!
Money Can't Buy Happiness
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Happiness is a feeling that everyone aims to accomplish, yet some people seem to only catch a sight of it. Gratifying atonement, a state of well-being, and serenity are the more eminent elements of happiness. David G. Myers and Ed Diener propose the article “Who Is Happy?” which present aspects of happiness, a theory that recognizes adaptation, cultural world view, and personal goals. I believe through word of mouth and through those whom we look up to, we are told many myths about happiness, especially the biggest myth that money can buy happiness. In Daniel Gilbert’s “Reporting Live from Tomorrow”, he argues that the definition of happiness is not defined by wealth and that we rely on super-replicators and surrogates to make decisions that we feel will enhance our happiness. Our economic history has proven the idea of declining marginal utility. If we pursue life and liberty without happiness, our lives, quality, and value will slowly vanish, but the absence of wealth has nothing to do with one’s happiness.
To begin with, anyone can be happy, it all depends on the type of person they are. There are of course they myths of happiness, predictors of happiness, and life satisfaction. Majority people believe myths that there are unhappy times during one’s lifetime, the stress-filled teen years “midlife crisis and then the years of old age” (Myers and Diener 12). In reality, people of all ages unveil that no specific time in their life were they happier or unhappier than others.
In addition to anyone being happy, genuine happiness is vulnerable. “If happiness is similarly available to people of any age, sex, or race, and to those of most income levels, who is happiest?” (Myers and Diener 14), the capacity of peoples’ joy is undiminished. Self-esteem, personal control, optimism, and extraversion are four inner traits that classify happy people. People who are happy admire themselves and feel personal control, empowered rather than helpless about their lifestyle. They are also optimistic and tend to be more healthy, successful, and happier than pessimistic people. Also, people that are happy are extraverted and they are happy when they are surrounded by a lot of people and even when they are alone. They are not happy because of their status of wealth.
Furthermore, super-replicating beliefs are ideas passed to new generations through surrogates. Surrogates are individuals who have faced a similar situation in which they pass the super-replicating beliefs to.
How to Cite this Page
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Through the use of surrogates, information passes from person to person due to word of mouth. Gilbert refers to super-replicators as false super-replicating beliefs. Although these beliefs are inaccurate, they are still transmitted due to the reason that beliefs do not need to be true or have merit to be widespread. For example, a team of Imperfects playing a game of telephone against team Perfects. Within this scenario, the second group of surrogates, the parents would be on the Perfects team and this team would only transmit accurate beliefs. The Imperfects, who would be represented by the first group of surrogates, the older siblings or friends who often communicate inaccurate beliefs, “under the right circumstances, the cost of [an] inaccurate belief would be outweighed by its benefits, namely that it led [Imperfects] to behave in ways that increased the odds that they would share accurate beliefs” (Gilbert 172). The objective of this game is to show how inaccurate beliefs can prevail in the belief-transition game. This example demonstrates how super-replicating beliefs are not only false, but are easily spread. The belief-transmission game justifies why we tend to believe what causes happiness that are not even factual; wealth.
Moreover, there is the “does money buy happiness?” question, and it seems as though the American dream is the goal of “life, liberty, and the purchase of happiness” (Myers and Diener 16). A figure in Myers and Diener’s article illustrated the correlation between national wealth and well-being. The figure proved that wealth and well-being are connected and that people who reside in rich countries are more satisfied than those who live in lower class countries. According to the figure presented, the correlation between national wealth and well-being is positive. Wealth is like health, “its absence can breed misery, yet having it is no guarantee of happiness” (Myers and Diner 17) meaning that just because one may be wealthy does not mean that they are happy because they already have money. If one lacks the ability to be wealthy then they will gain happiness from becoming wealthy so that they do not dwell in poverty.
Likewise, I agree with the argument that happiness is not defined by wealth. Wealth is freedom for those that are drowned in poverty. Poverty has the capability to position people in an unhappy lifestyle. Wealth generates temporary happiness and also bestows assurance of a better future. The “pleasures of wealth and greatness strike the imagination as something grand and beautiful” (Gilbert 174), individuals are not happy because of wealth, but because of the idea of serving the needs of a stable society. Americans who “earn $50,000 per year are much happier than those who earn $10,000 per year” (Gilbert 173). Less fortunate people are much less satisfied compared to the more fortunate wealthy people. Yet, those who live moderately wealthy lives are not much less happy than people who live in extremely wealthy nations. Wealth has “declining marginal utility” which means that once people have overcome burdens, the remaining money is useless. Wealth does not cause happiness; it only increases happiness when people are brought out of poverty.
To conclude, those whose happiness lacks stability are those who withdraw too much from those circumstances that caused their joy without them putting anything into it. Their happiness is like a bubble that can be easily popped by a change in their circumstances. One who enjoys nothing and has no pleasure in anything will not seek happiness in life. We obtain most of our knowledge through the experience of others. By relying on others in relation to decisions that affect our future, we are less served. Even though we look to surrogates for guidance in life due to their past experiences, super-replicator beliefs on the other hand are far from helpful. Through surrogates, we allow ourselves to be lead into false beliefs that promote social stability, not necessarily to our own best interest and happiness. Our consumption-driven society says that happiness correlates with wealth is false. One is not happy because of wealth, but because they are satisfied emotionally, physically, and mentally with life.