We see the one-liners don’t we? ‘Whoever says that money can’t buy happiness doesn’t know where to shop’. And so on. And we smile. Because we know that all those super-rich people with the big house, the Ferrari and the yacht, are deeply unhappy, empty inside. They’re all stressed, depressed and in therapy with broken relationships and dysfunctional families. People are so much happier when they have nothing. Life is simpler. And for some people, that might be true.
But not for most of us. Most of us are happier with a certain comfortable level of income. There are a number of studies that show this. In particular, a study from Purdue University, published in Nature Human Behavior, draws from the Gallup World Poll of over 1.7 million people that asked individuals to rate their lives from “worst possible” to “best possible” on a scale of 0-10.
The research follows a much-discussed 2010 study from Princeton University that found emotional well-being only rises with income to a point of about $75,000 for Americans (or $86,000 in today’s dollars). This is for single people, but can be scaled up for families. The exact amount differs slightly from one study to another, and obviously differs a lot in different countries. But it is roughly the amount required for a nice home, all material needs plus some left over for fun and for a rainy day.
At income levels above around $125,000, satisfaction levels tend to fall. According to lead author of the Purdue study, Andrew T. Jebb, “there’s a certain point where money seems to bring no more benefits to well-being in terms of both feelings and your evaluation.” And this seems to be true around the world. The extra income tends to bring with it extra working hours, extra responsibility and extra pressure. Some people may deal with this well, or even relish the thrill and the stress, at least for a while. But many people don’t. Maybe it’s better not to be crying, either in your Lamborghini or on a bike, but smiling in your Ford.
So how much money would really make you happy? Have you ever really thought about it? Maybe now would be a good time. Then you can plan how to achieve that income.