The question has always been asked: can money buy happiness? Can wealth bring meaningful and permanent joy to our lives? And if so, then how much? How much money is needed, and how much happiness can it buy?
If you Google the words “money” and “happiness” together, you get popular headlines such as:
- “How Much Money Do You Really Need To Be Happy?” (Forbes)
- “The Perfect Income for Happiness? It’s $161,000” (CNBC)
- “How much do you need to be happy?” (CNN)
- “Do We Need $75,000 a Year to Be Happy?” (Time)
These articles, and others, often reference a US study by Aknin, Dunn and Norton that says: “higher incomes are related to better moods on a day to day basis … however money has no effect on people’s happiness after a level of $75,000 is attained”. In other words, $75,000 a year is the optimal income for happiness and beyond that, money does not influence how happy we are. Another study conducted by Skandia International puts that number at $161,000 as an international average.
Irrespective of the dollar amount, studies appear to conclude that there is a relationship between money and happiness, but the effect of wealth on happiness is not linear; meaning the richer you are does not necessarily translate into happiness. Also, where you live affects the level at which you feel wealthy, so the relationship between money and happiness is actually relative and shaped by external factors.
This leads to the conclusion that there is still no answer to the age-old question of money buying happiness. In a way it does, but there is a limit.
So what does all this mean?
Well, according to a 5 year study by T. Corley, 82% of the wealthy are happy, while 98% of the poor are not. The majority of the poor link their unhappiness to finances. That link does not exist for the rich. This is not surprising, because it’s easy to assume that being rich creates the required conditions for happiness, such as improved relationships, reduced stress, better health and superior education. But there’s always more to life than the obvious, so here’s a couple of ideas that might intrigue you. The first is “FU Money” and the second is “Happiness to Wealth”. These are not research-based and there is no data to back them up, but I find them compelling and logical.
The F Word might throw you off a little, but bear with me, this is a valid concept. I first heard about “FU Money” in Jason Statham’s movie “Wild Card”, and then Mark Wahlberg’s “The Gambler”. Interestingly enough, both movies involve casinos, debt and gambling but the concept itself goes beyond Vegas and is applicable to everyone. “FU Money” is the dollar amount you need to be able to say FU to anything and anyone, whenever you want to. It’s the amount of money you need to quit your job if you don’t like it, or move to another city if you hate the weather where you live, change your car or get involved in activities that you normally can’t afford, etc. FU Money is a number that varies from one person to another, because it’s specific to the individual’s need, situation and circumstances. As such FU Money may or may not be $75,000 or $161,000.
Obviously, FU Money is not part of any life coaching process or school of thought, but I actually incorporate it in the goal-setting stage of working with my clients. Financial goals can’t be set without first knowing how much would really provide you with financial freedom. In other words, everyone wants a million dollars, but a million dollars is not a goal if you don’t know why you need it in the first place.
Happiness to Wealth
The second concept is about turning the tables, reversing your thinking and looking at the relationship between money and happiness from the standpoint of the latter. What if being happy first is the answer and the source of future wealth? What if seeking happiness from the little things in life is the thing that will get you success and fortune, and not the other way around? I believe it is possible, and although the question is often “can money buy happiness?” I think the question should be “what makes me happy?” and the money will then come.
This is not a new concept. Actually, The Law of Attraction, which will be the subject of my next article, is in principle that same idea. However, I’m not talking here about visualization or the alignment of the stars in your favour. When I say “Happiness to Wealth” I’m referring to a shift in perspective that could actually redefine your life priorities. I’m talking about focusing on becoming happy first, then using that positive energy to grow and creating a snow-ball effect that then leads to success and more happiness.
Sooner or later most people come to the realization that life isn’t just about material things, and that money is a means to an end, not an end in itself. However, the relationship between money and happiness often appears to be a tug of war; a shifting target. This is why I first work with my clients on clarifying their perspective, by asking the right questions and unpacking the right answers. So even if research shows that money buys happiness up to a certain level, and even if poor people worry about money while the rich don’t, there is still no rule that defines your own happiness. There is great value in setting your own goals, and it’s often the hidden formulas that work best. Happiness before wealth, and wealth to the extent that gives you absolute freedom … that’s the recipe for a life of abundance.