Does Money Buy Happiness?

First, they say it doesn’t. Then they say it does. Then they say it doesn’t… It’s kind of like the research on whether coffee is good for you, yes and no and yes and no… Or like that saying, “If you don’t like the weather, wait 5 minutes” wherever it was. Connecticut? Doesn’t matter.

What does? Does happiness matter? Our founders thought so when they wrote in the Declaration of Independence that all people had a right to “Life, Liberty, and the Pursuit of Happiness.” And no, let’s clear this up. Happiness is not selfish.

Research found that happier people are kinder to others, are more productive, experience physical benefits, and are more creative too.

Look at all the well-being that comes from just being happy. Just imagine what a better place the world could be if more people were. Okay, so happiness matters. But how much does it cost? As in, how much money on average do people need to have to be happy?

Here’s an excerpt from an Investor’s Business Daily that lays it out well:

Back in 2010, for example, research by Princeton professors Daniel Kahneman and Angus Deaton found that emotional well-being and day-to-day happiness rise as annual income increases. But they also found that happiness leveled off and plateaued at $75,000. That’s roughly $105,000 in today’s dollars.

But a similar study in 2021 by Matthew Killingsworth, a professor at the University of Pennsylvania, found that happiness continued to rise above incomes of $75,000. That suggested that higher incomes still have the potential to improve people’s day-to-day well-being. 

However, a joint research project by Kahneman and Killingsworth in 2023 found that, on average, higher incomes result in greater happiness for most people. But there’s a big exception. People who are well-off but unhappy only show more happiness up to a certain income threshold and then plateau. “If you’re rich and miserable, more money won’t help,” Killingsworth wrote in the paper.

In short, we used to think that beyond $75,000 yearly income there was little to no return on happiness, but the 2021 study showed increases in happiness beyond $75K. Unless, and this is the best part, if you are already rich and still miserable, you are going to need something else.

Like what?

What About Meaning and Purpose?

Maybe this sounds a little woo-woo to you, although I have to say a lot of clients have talked with me about how much they believe a sense of meaning and purpose in their lives would make them happier.

And they are onto something there. Studies show that a sense of purpose contributes to:

  • Mental Health and Overall Well-being
  • Better Cognitive Functioning, Longevity
  • Better Stress Management and Sleep
  • Fewer Heart Attacks, Strokes, and Dementia
  • Healthier Lifestyle Choices, Less Loneliness
  • Happier and More Productive Work

And, not only that, researchers found that “Participants who reported a higher sense of purpose had higher levels of household income and net worth initially, and were more likely to increase on these financial outcomes over the nine years between assessments.”

This sounds good. So, what is it?

Purpose is: “An abiding intention to achieve a long-term goal that is both personally meaningful and makes a positive mark on the world.”

And yet, one study finds that “only 25% of American adults say they have a clear sense of purpose about what makes their lives meaningful.” And money can’t buy that.

How to Find Meaning and Purpose

The researchers found these low-to-no-income indigenous and local communities, sprinkled throughout the world, to be on average about as happy (6.8 on a scale of 1-10) as the average for the U.S. (7.0). But they did not know why.

I would not be surprised at all if it turned out to be that the simplicity of their lives fosters greater closeness to each other and their values—accounting for their happiness despite their lack of financial wealth.

This also suggests that what we are looking for is already there right inside of us.  It’s just so noisy in there that it’s hard to hear. Naturally, I am going to suggest falling still when you can whatever way you prefer to quiet things down inside enough to hear what bubbles up on what matters to you.

For a prompt, you may want to take this simple assessment tool: The Life Values Inventory. Then you can align how you actually live your life with your values, to give yourself the gift of meaning and purpose—that is, if you haven’t already.

To close for now with a quote from an earlier post:

The Real Measure of Your Wealth Is How Much You’d Be Worth if You Lost All Your Money. ~ Unknown

For help with this or something else, Contact Me at [email protected]



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About the Author: Madelaine Weiss
Madelaine Claire Weiss (LICSW, MBA, BCC) is a Licensed Psychotherapist, a Board Certified Executive-Career-Life Coach, and bestselling author of “Getting to G.R.E.A.T. 5-Step Strategy for Work and Life.” sfas

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