Leave it to a couple of Noble Prize Winners to get the latest scoop! While the whole money happiness correlation is always in a state of debate; Daniel Kahneman and Angus Deaton believe they have reached the best possible conclusion.
In a recent poll involving 1,000 American households they discovered that making more can indeed buy happiness; but then that same joy literally slams into a dead-end. Yikes.
Money Happiness – Can Making More Buy Happiness… Latest Findings May Shock
Consequently, many economists are not exactly wrong when they make the claim that money can increase happiness. However, they do not always mention how that “happiness” is not exactly fulfilling. There comes a point where all comforts are met and money no longer produces satisfaction. The study’s findings reveal:
“When people making $30,000 a year are asked what kind of annual salary it would take to make them truly happy; the average answer is $50,000. You ask the same question of people making $100,000 a year, you’d expect them to say, ‘I’m double happy! I make twice the happiness threshold!’
Instead, what they actually say, on average; is that if they made $250,000 a year, then they’d be truly happy. You might think that means there is no set monetary amount that brings happiness; but that’s not entirely true, either. There is a set amount, and it’s $75,000.
Reported well-being rises with income until you hit $75,000, at which point it levels off. Beyond that, there’s no observable increase in happiness with higher income.”
Interesting. Nevertheless, in a nutshell what does that all mean? Well, for many happiness does increase when wages go up, but as economists have found; it is likely due to how society and various cultural backgrounds as a whole have been conditioned. From youth up most are taught that a higher salary means satisfaction. We are literally trained to believe and associate wealth with higher life satisfaction.
Money Happiness – Can Making More Buy Happiness…
However, as this study and many others show; money happiness comes with an expiration. At a certain point, when all basic necessities are met: food, housing, clothing, etc. Then the “relationship between money and happiness becomes purely theoretical.” Once needs are met you will have to look elsewhere to be “happy.”
While this study’s numbers can seem a little absurd given where you may live. For instance, in NY or California making $75,000 may not even cover just the basics. Thanks to good old social media, we spotted others who agree. Here are just a few of their thoughts.
“1,000 households where?? Definitely not NY.”
“If you live in any major city in the U.S., making more than $75,000 is a necessity to pay living expenses.
“I’d like to see these numbers adjusted to NYC.”
“This is a widely inaccurate generalization – it doesn’t I think take into account cost of living across different cities and states.”
“I’ve often thought about this and it depends on where you live and how much money it is to live there and meet your basic needs… So it all depends.”
“50k… so they can take home a measly 37. American wages are a joke.”
Money Happiness – Can Making More Buy Happiness… (Continued)
Yes, choosing to live in an expensive area is going to cost more money. Simple math. Realistic expectation. However, are all these studies on money happiness pointless?
We found one comment in particular that in our opinion brilliantly shows what all this research is trying to convey. One commenter stated,
“Interesting. Poverty is stressful. But anything above struggle with smart spending is actually a good place mentally; which makes you feel happy and more positive. Greed and trying to showboat can cause more stress than poverty.”
Do you agree with the above? Keeping up with the Jones can look good from the outside, but can actually cause unhappiness. Studies on money are interesting, plus great conversation; but they also help to show that is is always important to find a set amount that takes care of you and does not “overstretch” you either.
Like anything in life, money is a balancing act. We all need it to live, that’s a given. Yet, it’s about learning how much it takes to be truly content and not allowing the dollar to be the only reason we get up in the mornings.
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