Scientists have finally shredded the old saw about money and happiness...

[obgyn65]

The results of this research are surprising to me... The comments from other readers on that website make interesting reading too...

Life Inc. - Does money make you happy? Absolutely-

 

[novaman]

....other research showed that money only made you happier up to a certain point. Once your basic needs were met, additional money didn't make you any happier.

 

[WhoDaresWins]

I do agree that as standards of living go up, social unrest is likely to go down....Maslow's hierarchy of needs and all that if I remember correctly from sociology 101 (a hundred years ago, or so it seems).

 

[BigNick]

People with 10 million dollars are no happier that people with 9 million dollars. Therefore, money doesn't buy you happiness. (Although it can rent it for an hour or so.)

 

[Dawg52]

People with 10 million dollars are no happier that people with 9 million dollars. Therefore, money doesn't buy you happiness. (Although it can rent it for an hour or so.)

Those 10 million $$$ folks should give me 1 mil. Won't affect their happiness, but I sure will be.

 

[BTravlin]

While having money in and of itself does not insure happiness it sure helps in the pursuit of happiness.

 

[NW-Bound]

Has any scientist discovered that just having lots of money to count can be enough to bring happiness, meaning one needs not spend it?

And can one spend it and still have it too?

 

[Independent]

ABSTRACT

We explore the relationships between subjective well-being and income, as seen across individuals
within a given country, between countries in a given year, and as a country grows through time.

We show that richer individuals in a given country are more satisfied with their lives than are poorer individuals,
and establish that this relationship is similar in most countries around the world.

Turning to the relationship
between countries, we show that average life satisfaction is higher in countries with greater GDP per
capita. The magnitude of the satisfaction-income gradient is roughly the same whether we compare
individuals or countries, suggesting that absolute income plays an important role in influencing wellbeing.

Finally, studying changes in satisfaction over time, we find that as countries experience economic
growth, their citizens’ life satisfaction typically grows, and that those countries experiencing more
rapid economic growth also tend to experience more rapid growth in life satisfaction.

So they find the trifecta -
1) You're happier if you have more than your neighbors, and
2) You're happier if you have more on an absolute level, and
3) You're happier if you have more than you did some years ago.

Who wudda guessed?

http://bpp.wharton.upenn.edu/jwolfers/Papers/SWBIncomeEconomicGrowth.pdf

In the US, total income has gone up much faster than median income. So the median worker is losing ground in (1) and not getting any (much?) benefit from (3). No surprise we're kind of bummed out.

 

[NW-Bound]

So they find the trifecta -
1) You're happier if you have more than your neighbors, and
2) You're happier if you have more on an absolute level, and
3) You're happier if you have more than you did some years ago.

1) Millionaire-next-door types know this. They do not move up and stay in their long-time neighborhood. Years go by, they slowly have more than their neighbors.
2) Being here in a developed nation gave us a headstart on that.
3) Keep spending low, keep investing and rebalancing, and be patient. That seems to help me.

PS. If one is as Scroogey like me, he would keep his SWR low, so his stash can grow even in retirement.

 

[Texas Proud]

People with 10 million dollars are no happier that people with 9 million dollars. Therefore, money doesn't buy you happiness. (Although it can rent it for an hour or so.)

Since both have plenty of money... not a comparison....


To me, another problem is the definition of happiness... what makes one person happy can make another sad.. or mad... or just pissed off...


I think we all gravitate to what makes us happy... as an example... the guy with the golden voice is much happier with his drinking and drugs... he got a lot of help to move him away from his lifestyle, but enjoyed it more than what others thought he should have...

 

[haha]

It boggles the mind that someone would be surprised that having more money, on average, makes one happier. It is like being surprised that men like looking at attactive women, and women at attractive men.

Big shock!

Ha

 

[audreyh1]

While having money in and of itself does not insure happiness it sure helps in the pursuit of happiness.

That's an excellent summary!

 

[BigNick]

Quite by coincidence, I was reading up on exactly this subject yesterday as part of my preparation for an interview for the course that I want to follow if I return to college.

 

[Nords]

People with 10 million dollars are no happier that people with 9 million dollars. Therefore, money doesn't buy you happiness. (Although it can rent it for an hour or so.)

The first million is always the [-]hardest[/-] happiest...

 

[Midpack]

So they find the trifecta -
1) You're happier if you have more than your neighbors, and
2) You're happier if you have more on an absolute level, and
3) You're happier if you have more than you did some years ago.

Guess I'm the odd man out. It's taken me a lifetime to understand it's an illusion, but I don't buy #1 at all and I thought many others on this forum agreed. #1 is based on a misguided understanding of what happiness is, it's become so pervasive in our culture that it's considered a given, though false. It's like starting from the premise that playing basketball makes you tall. People spend their entire lives pursuing money, possessions, social position, etc. and happiness is fleeting and ever just out of reach. Some are lucky enough to figure it out before they're dead, some never do.

And #3 doesn't work for me either. I remember a thread here just a little while ago in which people confessed they were happier in their 20's than they are now later in life, and I agreed with that sentiment. I have much more now, but life is considerably more complicated.

Guess I'm out in left field again...

 

[W2R]

Guess I'm the odd man out. It's taken me a lifetime to understand it's an illusion, but I don't buy #1 at all and I thought many others on this forum agreed. #1 is based on a misguided understanding of what happiness is, it's become so pervasive in our culture that it's considered a given, though false. It's like starting from the premise that playing basketball makes you tall. People spend their entire lives pursuing money, possessions, social position, etc. and happiness is fleeting and ever just out of reach. Some are lucky enough to figure it out before they're dead, some never do.

And #3 doesn't work for me either. I remember a thread here just a little while ago in which people confessed they were happier in their 20's than they are now later in life, and I agreed with that sentiment. I have much more now, but life is considerably more complicated.

Guess I'm out in left field again...

+1

I don't really see it either. As long as I have the basics I'm pretty happy. Like others here I am not spending all of my SWR because I am perfectly content spending less.

 

[Geoffrey]

My recollection is that recent studies have shown that the correlation between money and happiness is limited, i.e., the correlation is stongest at the lowest income levels and weaker as one grows more prosperous. As I recall, some researchers have found that after about $60K per year, you reach a point of diminishing returns. That makes sense to me as having more than "enough" seldom brings much satisfaction.

 

[harley]

I'm pretty sure I would be happier with $10M than $9M.

 

[travelover]

I'm pretty sure I would be happier with $10M than $9M.

I'm not sure, but would volunteer for the study.

 

[Major Tom]

While having money in and of itself does not insure happiness it sure helps in the pursuit of happiness.

Allow me to give you my version:

While having money in and of itself does not ensure happiness it sure helps in the pursuit of pleasure.

 

[haha]

This is very simple. If money never figures into your decision making, or into your perception of lifetime security, then more money would perhaps not make you happier.

If it does, more money will likely make you happier, or at least less stressed.

But if money never figured into your perceptions and decisions, you wouldn't be here obsessing on this board.

Comparing a well-off 55 year old with a mostly penniless 21 year old really doesn't prove much, except that for most of us, youth trumps money.

Another "Who knew?" moment.

Ha

 

[Rustic23]

I suspect that if you could graph this you would see up to a point every dollar more you had would make you a little happier, up to a point. At some point the curve decreases or possibly goes down. I also suspect that each persons curve is different. I think most of this board would consider themselves happy, at least those that have reached FI, and those that have RE'd even more. Money has something to do with that.

For me, money does not make me happy but being FI, i.e. having enough money, allows me to do the things that make me happy. However, just having money, or being FI does not guarantee you happiness. However, IMHO, it is impossible to to achieve long term happiness without having the means to support it.

 

[ls99]

Pretty happy with what I've got. A few million may put a bigger grin on my mug. Any givers to see if it will work?

 

[Bossonova]

I think Wharton might have a slight bias, being a Business School and all. But as an earlier posted noted, it is all about Maslow's Hierarchy of needs. If your basic needs are not being met, you will not be happy. Once the basic needs of food, shelter and security are met, a lot of the other needs are non monetarily driven (with maybe the exception of esteem....at least in our society).

 

[Onward]

If money never figures into your decision making, or into your perception of lifetime security, then more money would perhaps not make you happier.

This is really the crux of the issue IMO. Absolutely spot on.

Comparing a well off 55 year old with a mostly penniless 21 year old really doesn't prove much, except that for most of us, youth trumps money.

I'd say the penniless 21-yr-old is happier because he has no house payment, no car payment, no tax issues, no neighbor-envy, no nasty commute, no unbearable j*b that he can't leave.

There's something very wrong or incomplete in the study. I've spent time in 35+ countries and lived in a few, and there is no way that citizens of the highest-GDP countries are the happiest people on Earth. Not even close. It's a fiction we tell ourselves to avoid blowing our brains out on Monday morning.