Can money buy happiness? Scientists (finally) say yes.

[MJ DeMarco]

In light of the "To hell with getting rich, I just need to own my time" threads around here I give you the following:

https://www.washingtonpost.com/business/2023/03/08/money-wealth-happiness-study/

I don't like citing WAPO, but I'm familiar with these scientists so I feel I can post this. The article pretty much concludes what I've been saying since this forum started 15 years ago.

Money can buy happiness and is a significant determinant.

Is money everything in the happy equation?

Of course not.

But it is a big factor. Accept it, or lie to yourself and surrender to the system in a shack and an empty pantry.

Key points:

• Money adds to happiness, and much more than that stupid $70K/year level which has been claimed before.
• People with little money enjoy much more happiness on a marginal level than wealthy people. In other words, give a poor person $5K and it will move their happiness meter much more than it would I. Makes perfect sense.
• People with depression and psychological issues will find money less impactful.
• There is an unhappy minority ...

 

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[Skroob]

I very much believe in the unhappy minority. You ever meet people that are just miserable no matter what happens? I swear, they create their own misery. The “why do bad things keep happening to me” crowd.

 

[Minuz]

I once saw a study that said.

"Till you reach a certain point of money where you can get some level of lifestyle (example, having a house, being able to eat what you want and other kinda basic stuff), money does increase happiness. But the study also showed that money and happiness don't go together once that point is crossed."

I found this pretty accurate.

 

[Shono]

I very much believe in the unhappy minority. You ever meet people that are just miserable no matter what happens? I swear, they create their own misery. The “why do bad things keep happening to me” crowd.

I very much believe in the unhappy minority. You ever meet people that are just miserable no matter what happens? I swear, they create their own misery. The “why do bad things keep happening to me” crowd.

This. This is why the books like ‘the secret’ is so invaluable. First you have to believe then you can manifest your dreams.

 

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[Skroob]

I once so a study that said.

"Till you reach a certain point of money where you can get some level of lifestyle (example, having a house, being able to eat what you want and other kinda basic stuff), money does increase happiness. But the study also showed that money and happiness don't go together once that point is crossed."

I found this pretty accurate.

I disagree entirely. And so does the study in MJs post.

 

[MitchC]

I was hanging out with old friends I haven’t seen for years and was surprised by their thoughts and mindsets.

I wish I shared this thought I’ve had for a while with them but I didn’t.

The thought is more related to politics, but it applys to this too.

Imagine the world is taken over by your perfect politician and he does everything you want and it’s implemented perfectly with no resistance. How much does your life change? Probably very minimal.

Now imagine the difference you could make to your life by changing things yourself. Even just small things. Get off your phone, be nicer to people, plan more fun things to do, stop complaining, change jobs, start a business, eat better, work out, move to a better place. These are all small things that have a drastic difference on your happiness and quality of life.

I think the same applies to getting rich. If getting rich doesn’t make you happier that’s on you. You need to start doing more fun things and living better. Get a nicer house, travel, get off your phone, plan more fun things, hire a chef, organise a yacht with all your friends, give money to charity. More money 1000% makes your life better.

 

[Skroob]

Imagine the world is taken over by your perfect politician and he does everything you want and it’s implemented perfectly with no resistance. How much does your life change? Probably very minimal.

I feel so contrarian in this thread today. I swear I don’t mean to be, but I happen to have a counter example to this. Being a Floridian, if the governors election in 2018 had gone 0.1% the other way, I’m pretty certain my life would be significantly different right now. Granted, it’s been a weird few years, and I’m not sure theres many other times in my life where that would be the case.

 

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[Kevin88660]

I once so a study that said.

"Till you reach a certain point of money where you can get some level of lifestyle (example, having a house, being able to eat what you want and other kinda basic stuff), money does increase happiness. But the study also showed that money and happiness don't go together once that point is crossed."

I found this pretty accurate.

The key thing is at “what point.”

I am not even talking bringing your dog to the best vet.

But rather obvious stuff that your own net asset is able to support a family of 4-5 and none of you need to work. You and your spouse not having the need to work till death, and kid’s expense covered by you until they graduate from schools.

House fully paid up. Medical insurance fully covered.

That would put someone at top 0.05 percentile of the population.

A comfortable but simple family expense of $10k a month with 3 percent retirement withdrawal rate means a portfolio worth of 3.6 million is needed.

 

[BizyDad]

I once so a study that said.

"Till you reach a certain point of money where you can get some level of lifestyle (example, having a house, being able to eat what you want and other kinda basic stuff), money does increase happiness. But the study also showed that money and happiness don't go together once that point is crossed."

I found this pretty accurate.

I disagree entirely. And so does the study in MJs post.

The key thing is at “what point.”

I am not even talking bringing your dog to the best vet.

But rather obvious stuff that your own net asset is able to support a family of 4-5 and none of you need to work. You and your spouse not having the need to work till death, and kid’s expense covered by you until they graduate from schools.

House fully paid up. Medical insurance fully covered.

That would put someone at top 0.05 percentile of the population.

I will back him up that the study exists. I remember reading a study that had similar results. It was primarily based on Americans. And they quoted the figure that anything over 120K a year had marginal improvement of happiness. I remember it talked about that being individual salary as opposed to household income.

It was kind of the opposite of this new study. There was a minority of people for whom more money meant more happiness. But for most people, it didn't seem to make much of a difference.

This was many years ago, so adjust that 120K figure for inflation... 120 k isn't what it used to be.

How true is it?

Shoot, I don't know. I always question how any of these studies quantify "happiness".

I imagine, regardless of income level, my happiness will be more predicated on what I do with my time than what my bank account looks like.

On the other hand, my stress level is strongly inversely correlated to the size of my bank account.

 

[PureA]

Love the pushback to the current and increasingly prominent 'settling' mentality MJ.

I similarly react when I hear people say "I can't be fit and healthy because I want to enjoy my life"... You think these things are mutually exclusive? GAAH.

 

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[Johnny boy]

The one time I trust the science

 

[Kevin88660]

The key thing is at “what point.”

I am not even talking bringing your dog to the best vet.

But rather obvious stuff that your own net asset is able to support a family of 4-5 and none of you need to work. You and your spouse not having the need to work till death, and kid’s expense covered by you until they graduate from schools.

House fully paid up. Medical insurance fully covered.

That would put someone at top 0.05 percentile of the population.

I will back him up that the study exists. I remember reading a study that had similar results. It was primarily based on Americans. And they quoted the figure that anything over 120K a year had marginal improvement of happiness. I remember it talked about that being individual salary as opposed to household income.

It was kind of the opposite of this new study. There was a minority of people for whom more money meant more happiness. But for most people, it didn't seem to make much of a difference.

This was many years ago, so adjust that 120K figure for inflation... 120 k isn't what it used to be.

How true is it?

Shoot, I don't know. I always question how any of these studies quantify "happiness".

I imagine, regardless of income level, my happiness will be more predicated on what I do with my time than what my bank account looks like.

On the other hand, my stress level is strongly inversely correlated to the size of my bank account.

I wonder how much of the “happiness” is actually being blissfully unaware.

If that is the case that “happiness” does not mean anything because it is not sustainable through out the entire lifecycle of a person.

 

[heavy_industry]

This is why the books like ‘the secret’ is so invaluable. First you have to believe then you can manifest your dreams.

A better title for "The Secret" would be "The Scam".

This is a new age pseudo-scientific mystical garbage that promises free money and success for the lazy and undeserving.

And the most dangerous part about "The law of attraction" is that it's half true. Which makes it so appealing for a lot of people.

The life we are living is the result of a very complex chain of reactions. This deterministic chain of events starts with our imagination.

What we think and how we view the world will determine what we do. What we do repeatedly, will determine how our future will look like. A -> B, cause and effect.

So yes, we are the creators of our own destiny. But "The secret" encourages people to stop at the imagination stage and perform no action, hoping that the universe will break the natural deterministic rules of how existence is happening, and give us free money.

This is preposterous. This is narcissistic self-delusion.

 

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[Bohemi]

I met this guy a fem months back. During a casual conversation I asked him what he would do if he got a million to spend, and his first response was: i am happy with the life im living, i have nothing to spend a million on. And then he added that he played the lottery every week….

a few weeks later i talked to him again. This time he suddenly talked about where he wanted to travel to if he had a million… okay i thought something had shifted within him

I have seen him occasionally since then and even though he talks more about a new tv and traveling, even talking about learning a new skill (this guy has no education besides public school and have been working the same job for 20 years, so that is a big deal to do) you know what else have been increased? His gaming habit! Last time i saw him, the longest time he put his phone down was while during dinner

I think that this is what living in denial looks like. When you pack away your dreams like that (im not sure he has done it on purpose, just lost hope on ever achieving it) all it takes for it to come alive again is one silly question during a casual conversation. And if you aren’t ready to do anything about it, the distractions will come and take over once again.

I wonder how much of the “happiness” is actually being blissfully unaware.

I wonder if you misplaced the “” - perhaps it should have been placed around the word blissfully ?

 

[Supa]

I think one reason, why there seems to be a trend towards "being happy with mediocrity" ist the boom of entrepreneurship over the last 5-10 years or so.

I remember, when I read TMF and came on here, most people didn't give a crap about entrepreneurship. Sure there have always been some that did, but those were quite in the minority compared to the rest.

But then all these new possibilities of becoming wealthy by doing something enjoyable and not work too much, emerged:

YouTube creators. Instagram Influencers. And now TikTokers.

Getting rich online suddenly wasn't about building a business or a product anymore. All you needed was a smartphone with a camera, an internet connection and, most importantly, yourself. That's it.

Of course we all know, that it is definitely not easy, and that you need to put a ton of work into this type of business. All of that in an overcrowded market. But it SEEMS easy.

So what does this lead to?

Millions of young people trying to become rich the easy and enjoyable way.

But what happens, once most of these realize, that it's not as easy as they thought? That they may never make it?

You need a counter perspective to sooth all those frustrated by the fact, that they will probably never make a living from filming themselves and putting it on YouTube, Instagram, TikTok or whatever other social media platform.

Not to mention, that there's a whole market now of these people who will probably not make it.

Lots of people to sell your books and courses and stuff about how it's totally ok to be mediocre.

 

[biophase]

I once so a study that said.

"Till you reach a certain point of money where you can get some level of lifestyle (example, having a house, being able to eat what you want and other kinda basic stuff), money does increase happiness. But the study also showed that money and happiness don't go together once that point is crossed."

I found this pretty accurate.

I’m curious as to how you came to that conclusion. Did you cross that point and your happiness didn’t increase?

 

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[Belesarius]

There are many lies cemented into society that are based on some random study that was conducted many years ago and than it is spread like Gospel. I am sure that 99,999% of people who believe in the random fact that more than 75k in a year won´t make you happy have not read the study. Have not checked for its statistical relevance. Often times other studies are published that completly contradict a certain thesis but only one thesis spreads like a virus.

I have found another Study that says something completly different:
Same goes for a Gallup poll question asking Americans, "Generally speaking, how happy would you say you are — very happy, fairly happy, or not too happy?" Only 35 percent of people in households making under $10,000 a year reported being very happy. Eighty-three percent of people in households making $250,000 to $500,000 did. And 100 percent of people making more than $500,000 did. There was no point at which more money didn't correlate with more happiness.

In the end you have to form your own opinion, for me 75k certainly will never be enough, espacially after taxes and insurance, and will not lead to a life of financial stability and monetary and choices abundance.

 

[Belesarius]

I will back him up that the study exists. I remember reading a study that had similar results. It was primarily based on Americans. And they quoted the figure that anything over 120K a year had marginal improvement of happiness. I remember it talked about that being individual salary as opposed to household income.

It was kind of the opposite of this new study. There was a minority of people for whom more money meant more happiness. But for most people, it didn't seem to make much of a difference.

This was many years ago, so adjust that 120K figure for inflation... 120 k isn't what it used to be.

How true is it?

Shoot, I don't know. I always question how any of these studies quantify "happiness".

I imagine, regardless of income level, my happiness will be more predicated on what I do with my time than what my bank account looks like.

On the other hand, my stress level is strongly inversely correlated to the size of my bank account.

This is a very important point : "I always question how any of these studies quantify "happiness"." You can look up the studies and you find out the parameters that they are using. For the most famous study the 75k one they used the following parameters: "Did you experience the following feelings during a lot of the day yesterday? How about _____?" with emotions like "stress," "happiness," "enjoyment," "worry," and "sadness" filling in the blank.

It just captured a state of mind of the person in an exact moment. Can rich people also be stressed, worries or sad? Of course. What does this say about their general level of happiness? Not much in my opinion

 

[heavy_industry]

But then all these new possibilities of becoming wealthy by doing something enjoyable and not work too much, emerged:

YouTube creators. Instagram Influencers. And now TikTokers.

Getting rich online suddenly wasn't about building a business or a product anymore. All you needed was a smartphone with a camera, an internet connection and, most importantly, yourself. That's it.

In other words:

The modern society no longer encourages discipline, responsibility, hard work, or actual value production.

You can be a little bitch laughing at a camera and begging your followers for money. And then you have the audacity to call yourself an "entrepreneur".

I cringe hard, every time I encounter this.

They all call themselves "influencers" or worse, "digital creators", when in reality they are a bunch of clowns posting fake photos on a fake website about their fake life in the desperate hope of getting free & easy money.

The good news is that this is your competition.

If you have any trace of discipline and work ethic, you instantly win.

 

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[Panos Daras]

The man himself, Daniel Kahneman, a Nobel prize economist that is actually a psychologist, whose team was part of the studies talks about these findings at around 17:23 of this video. This video is from 2010---> The riddle of experience vs. memory. Please watch it till the end if you have not done so already. You will get great insight into how happiness actually works in our monkey brain
P.S: Unpopular opinion: Happiness is a bullshit hypermarketed buzzword, that corporate America and other capitalist countries (or the SCRIPT as MJ calls it) push to sell you more crap that you don't need.

 

[JAJT]

And the most dangerous part about "The law of attraction" is that it's half true. Which makes it so appealing for a lot of people.

Exactly - my biggest problem with new-age mindset books is that they aren't NECESSARILY wrong, but they ignore WHY they are right, which puts them squarely in the "just smart enough to be dangerous" camp, IMHO.

The reality is that the law of attraction is just a fancy phrase for the Baader-Meinhof phenomenon:

Wiki definition - "Frequency illusion, also known as the Baader–Meinhof phenomenon or frequency bias, is a cognitive bias in which, after noticing something for the first time, there is a tendency to notice it more often, leading someone to believe that it has an increased frequency of occurrence. It occurs when increased awareness of something creates the illusion that it is appearing more often. Put plainly, the frequency illusion occurs when "a concept or thing you just found out about suddenly seems to pop up everywhere."

This is also often called the "red car" phenomenon - as in you buy a red car because you want to stand out, only for it to seem like everyone on the road just started driving a red car as well.

The Secret / Law of Attraction 'works' for no other reason than you're suddenly paying attention. Not because the universe is bending reality to your will.

 

[Minuz]

I’m curious as to how you came to that conclusion. Did you cross that point and your happiness didn’t increase?

I just saw a research someone did. Not that I took this conclusion myself

I believe is accurate tho when you have certain things in life money wont make you happy just by itself.

If you are not happy driving a BMW are you gonna be happy just because you drive a Ferrari? I know people with lots of money and still they are always not happy or with different problems and i know people with less money and lots of problems too that are always with another vibe and positive energy.

This means is not correlated after a certain amount of money you own. You can be really rich and really happy or maybe really rich and not happier than someone that earns 120k a year.

Idk if I'm good at explaining it , but I believe you get the idea.

 

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[Guest931Xfjyx]

Reducing stress through increasing spending capacity results in happiness, who woulda thought?

 

[MJ DeMarco]

If you look at this study and its methodology, it has the propensity to be far more accurate as it was able to query its participants at all parts of the day via their smartphone. All other studies in the past, like the stupid $75K study, were unable to do so.

I once so a study that said.

"Till you reach a certain point of money where you can get some level of lifestyle (example, having a house, being able to eat what you want and other kinda basic stuff), money does increase happiness. But the study also showed that money and happiness don't go together once that point is crossed."

I found this pretty accurate.

In my experience, and those around me with any amount of wealth, it's a study of complete bullshit.

Enjoy the mediocrity.

 

[Subsonic]

In light of the "To hell with getting rich, I just need to own my time" threads around here I give you the following:

https://www.washingtonpost.com/business/2023/03/08/money-wealth-happiness-study/

I don't like citing WAPO, but I'm familiar with these scientists so I feel I can post this. The article pretty much concludes what I've been saying since this forum started 15 years ago.

Money can buy happiness and is a significant determinant.

Is money everything in the happy equation?

Of course not.

But it is a big factor. Accept it, or lie to yourself and surrender to the system in a shack and an empty pantry.

Key points:

• Money adds to happiness, and much more than that stupid $70K/year level which has been claimed before.
• People with little money enjoy much more happiness on a marginal level than wealthy people. In other words, give a poor person $5K and it will move their happiness meter much more than it would I. Makes perfect sense.
• People with depression and psychological issues will find money less impactful.
• There is an unhappy minority ...

View attachment 47475

I believe that all the studies that say "more money doesn't being more happiness" only consider people that work jobs or job equivalent businesses.

With a cents business going from 20k a month to 200k a month doesn't mean you need to 10x the working hours. It could mean reducing working hours and being able to do more fulfilling work while making more money.

Tell me in what world your happiness doesn't increase when you make enough to hire a general manager and then don't have to deal with all the braindead bs tasks of a window cleaning business.

Because I know how it feels to work outside on a shaky ladder at 4°. It sucks.
I see my parents both earning 8k a month and both having a dead soul because they work a corporate job.

Don't these people know how happy I would be if I could pay off their mortgage and retire them and revise their souls.


Like already said money is just a number, it matter what you do with it.

 

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[Bohemi]

For many years Denmark has been labeled as the happiest country in the world. I am Danish, have lived here all my life and I know why we have that high standard of happiness. Because the country is strong, we have a strong and powerful culture and our communities are hard to knock out of balance.

That said I can count on one hand only of people being genuinely happy. I obviously can’t speak about their level of happiness, all i can say that they dont act happy. Complaints, stress and depression are at an all time high here too, our kids are struggling in schools more than ever and we are even experiencing increased violence. At least that is what the news are trying to tell us (hmmm maybe I shouldn’t have listened)

I believe that money has a lot to do with happiness. But I don’t really think that having money is enough when it comes to happiness. But by all means it helps to be able to go the doctor without having to worry about the payment, and to send my kid of to school without having to think about tuition.

But Im also “blessed” with a chronic disease. No money in the world can fix that. But worrying about money will definitely make my health issues worsen

just a few thoughts from a single mother of a happy teenager

 

[Panos Daras]

I don't understand what is that difficult to grasp for people. The studies conclude that money buys happiness both for the remembering and the experiencing self (see the video above from Kahneman of what these selves are) most of the time, but it has diminishing returns. Of course, there are outliers in happiness. To me, that is no shocker and basically, the studies just tell us what we already know. Of course, to a large extent, you will be happier with more money. Not only can you buy whatever you want but also you can have whatever impact you want on this planet and to the people around you! Why is this such a shocker to everyone?

 

[James Klymus]

Ahhh yes, Science taking years to catch up to what we already know. Where have I heard that one before over the last 3 years?

 

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[biophase]

I just saw a research someone did. Not that I took this conclusion myself

I believe is accurate tho when you have certain things in life money wont make you happy just by itself.

If you are not happy driving a BMW are you gonna be happy just because you drive a Ferrari? I know people with lots of money and still they are always not happy or with different problems and i know people with less money and lots of problems too that are always with another vibe and positive energy.

This means is not correlated after a certain amount of money you own. You can be really rich and really happy or maybe really rich and not happier than someone that earns 120k a year.

Idk if I'm good at explaining it , but I believe you get the idea.

So you basically read a study.

This is a dangerous way to be going through life. How do you know what you say is true without any data to back it up?

If you based your future emotions and wants on how you perceive others' reaction to xxxx, you are never going to figure anything out.

If all the people you knew didn't like sushi, would you assume that you wouldn't like sushi?

BTW, I can tell you that I was much happier driving a Ferrari vs a BMW. You can't even compare the two. But, how would you know? Oh, you read a study.

 

[biophase]

This is a very important point : "I always question how any of these studies quantify "happiness"." You can look up the studies and you find out the parameters that they are using. For the most famous study the 75k one they used the following parameters: "Did you experience the following feelings during a lot of the day yesterday? How about _____?" with emotions like "stress," "happiness," "enjoyment," "worry," and "sadness" filling in the blank.

It just captured a state of mind of the person in an exact moment. Can rich people also be stressed, worries or sad? Of course. What does this say about their general level of happiness? Not much in my opinion

The thing about asking about happiness is that someone that makes $50k could be happy. But they could be happier with $150k. They just don't know because they don't make or spend that.

Imagine you have a cell phone in 2007, someone asks if you are happy with your Nokia phone. You'd probably say yes.
Now in 2008, you get an Iphone . Are you happier with the Iphone vs the Nokia? The problem was that you couldn't even imagine that a phone could do all those things.

The person that was happy with his horse drawn cart couldn't imagine a car. So of course he's happy with it. That's until he gets to sit and drive a car one day.

You don't know what you don't know.