Proven: money does buy happiness
Money, does it buy you happiness? Personally, I’ve had money and been without, and for me its definately better to have it! But does it buy happeness for most people?
Yes. It does.
In fact, according to research carried out by esteemed – and increasingly high profile – economists at the University of Michigan, Betsey Stevenson and Justin Wolfers, the more money you have the far happier you will be.
Their latest paper, just published by the Brookings Institute and based on extensive research on more than 1,000 people of various income brackets, clearly demonstrates an upward relationship between wealth and happiness.
It comes down to logarithms, apparently, as the happiness value you get from your next monthly salary is always less than the one you received before.
Let’s look briefly at the detail.
In the $10,000 – $20,000 income bracket, 42 per cent describe themselves at ‘very happy’, 47 per cent as ‘very satisfied’, 15 percent as ‘not too happy’ and 11 per cent are ‘dissatisfied’.
In the $30,000 – $40,000 income bracket, 55 per cent describe themselves at ‘very happy’, and only 4 per cent this time are ‘not too happy’. By the time income hits $50,000 – $70,000 only 5 per cent are ‘very dissatisfied. When it gets to $100,000-$150,000 not one of those surveyed is ‘not too happy’. At $250,000 – $500,000 a staggering 83 per cent are ‘very happy’ and everyone is ‘satisfied’ to some degree. And by the time we hit $500,000 + everyone is either ‘very happy’ or ‘very satisfied.’
There is an unequivocable trend: as income increases, so do levels of happiness and satisfication.
Of course, it would be nonsense to say that there are no downbeat high net worth individuals, but these scientific findings undeniably support the assertion that money is good for your wellbeing.
Ah, but that survey only takes into account consumer–driven, materialistic Americans. Well, no. The results are consistent across 25 different countries, including the UK, Luxembourg, Mexico and Saudi Arabia.
And, in addition, the happiness variations were almost perfectly pegged to the changes in economic conditions, which wouldn’t happen if it were a fluke or inconsistent.
So, it appears the more money we have, the happier we really are – which, I guess, further validates what those of us in financial services do for a living, as we strive each day to allow our clients to reach, and then exceed, their financial goals.