Does money bring you happiness? Will making your dream level of income allow you to create the life you want? Would having more money make you feel better emotionally?
Every few years, a new study comes out that you will see highlighted in the financial media. Many people have different opinions as to whether money can buy you the life and love you desire.
The Studies
One of the most referenced is from a 2010 study by Princeton researchers, Daniel Kahneman and Angus Deaton. The study found that people tend to feel happier the more money they make, up until a point, which Kahneman and Deaton estimated to be about $75,000 a year per person. The study basically concluded that how people felt on a daily basis didn’t improve as they made more than $75,000, but their life satisfaction, or how happy they were with their life overall, did.
But more recently, a 2018 study from Purdue University used much wider data from the Gallup World Poll and found that the ideal income point for individuals is $95,000 for life satisfaction and $60,000 to $75,000 for emotional well-being. When people earned more than $105,000, their happiness levels decreased.
But according to a new study out of University of Pennsylvania’s Wharton School, people’s well-being rises with the amount of money they make, even beyond $75,000. The study’s author said that the reason it rises is that more money gives people more ability to take control over choices about how they live their lives.
My Thoughts
Here are my thoughts on money and happiness. They come from my life experiences and not from an empirical study.
Financial happiness is:
Positive cash flow every month
Being free of consumer debt
Helping my parents in their old age
Being able to help my children get started in life
Enabling organizations I care about to deliver on their charitable missions.
What is financial happiness to you? Just leave a comment on this post.
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