Tom's Thursday Thoughts: Does Money Buy Happiness?
Tom Schweizer
Director, Solutions Engineer | U.S. Public Sector Collaboration | Championing Growth with Data-Driven Optimism
Tom's Thursday Thoughts: Does Money Buy Happiness?
The age-old question of whether money buys happiness has fascinated us for years. A groundbreaking 2010 study by Angus Deaton and Daniel Kahneman offered an intriguing answer:
1. The $75,000 Plateau: Emotional well-being—the joy, stress, and satisfaction we feel daily—levels off once annual income hits $75,000. Beyond that, more money doesn’t seem to improve how we feel day-to-day.
2. Life Satisfaction Keeps Rising: Interestingly, our overall perception of life continues to improve with higher income, showing that wealth might bring a sense of achievement, even if it doesn’t directly boost daily happiness.
3. 2023 Revisions: Recent research suggests that for most, happiness can grow with income beyond the earlier thresholds—but for those struggling with deeper unhappiness, money alone isn’t the solution.
The takeaway? Money might buy comfort, but true happiness often requires something more: purpose, relationships, and a sense of fulfillment.
In 2010, Nobel laureates Angus Deaton and Daniel Kahneman published a seminal study examining the relationship between income and two facets of well-being: emotional well-being and life evaluation.
Key Findings:
? Emotional Well-Being: This refers to the daily experiences of emotions such as joy, stress, sadness, and affection. The study found that emotional well-being improves with income but plateaus at an annual income of approximately $75,000. Beyond this threshold, additional income did not significantly enhance daily emotional experiences.
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? Life Evaluation: This pertains to an individual’s overall life assessment when reflecting upon it. Unlike emotional well-being, life evaluation increased steadily with higher income levels without a discernible plateau. This suggests that while day-to-day feelings may stabilize beyond a certain income, individuals perceive their overall life satisfaction as progressively better with increased earnings.
Implications:
The study indicates that while higher income can alleviate certain stressors and improve daily emotional experiences up to a point, it does not guarantee increased happiness beyond the $75,000 threshold. However, individuals’ broader life evaluations continue to rise with income, implying that financial gains may influence one’s overall sense of success or achievement.
Subsequent Research:
In 2021, researcher Matthew Killingsworth conducted a study that challenged the 2010 findings, suggesting that well-being rises with income beyond the previously identified threshold. To reconcile these differing results, Kahneman and Killingsworth collaborated on a 2023 study, which found that happiness increases with income for the majority. However, for a smaller group of individuals who are already unhappy, additional income beyond $100,000 does not significantly enhance well-being.
These studies collectively highlight the complex relationship between income and happiness, suggesting that while money can influence well-being, its effects are nuanced and subject to individual differences.
How do you balance income and well-being in your life?
#TomThursdayThoughts #Happiness #WellBeing #Leadership
District Manager - Pure Storage - Eastern PA & Delaware
2 个月Money can't buy happiness, but money gives you choices and choices make you happy. Money can buy comfort, freedom, options, and quality of life. Unfortunately, many of us believe that happiness is a destination. Once I make 1 million dollars a year, I will finally have “enough”. This never works. We all know this too well. Even as a child, the next toy never made us truly happy — at least not in the long run. My suggestions for happiness and a life free of economic anxiety: Work in tech sales ( healthy earning potential) Strive to live to your full potential Be grateful for the present moment. Do not tie your self-worth to your net worth Crush your goals, and enjoy the journey!
Fractional CLO | Forbes Writer | Executive & Career Coach | Business Coaching Program Architect | Leadership Development & Organizational Effectiveness Strategist | Host “What’s On Your Bookshelf" | Global Board Advisor
2 个月We invested a whole year of weekly episodes of What’s on Your Bookshelf to the topic of Happiness. Here’s one of the episodes about money and closely aligned to your post! We can chase money, or chase wisdom and find peace and contentment in things money can’t buy. As the research shows - there’s a baseline and threshold for the necessity of money. I know some very wealthy miserable people and some modest very happy and content people. Last thought - companies say that money doesn’t make people stay at jobs - but people want to be paid fair value and to be compensated for good work. People leave when the culture is bad but when the economy and job markets are thriving - people leave bad cultures and for better pay. Thoughts on this? https://podcasts.apple.com/us/podcast/whats-on-your-bookshelf/id1688553668?i=1000674098115
Thank you for taking the time to share your opinions. If you have not read The Surprising Truth about What Motivates us, you might want to give it a read. This is a 10 minute version of the book and is super well done. https://youtu.be/u6XAPnuFjJc?si=z9BKalEFQQS6yt1T