Money and Happiness – Happier With More, But Only To A Point?

In this post:

• You probably think more income would make you happier
• Why do so many studies say otherwise?
• Maybe we should focus on Contentment rather than just Happiness

 Let’s cut right to the chase.

If someone, whether it be your employer or late great aunt, were to offer you $1 million, you would probably tell me that it would make you happier. Are you sure?

My employer did give me $1 million. Not all at once, but over a not-so-long-period before I left. It helped pay for some remaining years of my kids’ college, support two mortgages, and pad the retirement fund, and  I’m certainly not complaining about having the extra income.

But reflecting back on this while pondering the concept of money and happiness, I can honestly say that I was far less happy on a day-to-day basis the last five years of my time at that Big Corporate company than during the first five years, when I was in my mid-20s and making approximately 1/8 as much.

As you’ll see below, it turns out I was not in the minority.

But first, ironically as I was finishing up this post, the special Wealth section New York Times this past Sunday had a lot to say about how some wealthy people feel about their money.

In one of the articles, titled “I’m Rich, And That Makes Me Anxious”, one multimillionaire says “I have more money than I had ever imagined, but I still worry — do I have enough?”

Another of the articles was about how conflicted many lottery winners feel with their sudden windfall. As one man, a bartender from the Bronx and $7 million winner, put it “People say you don’t have to worry about money. Well, that’s all I worry about now”.

Not that these people don’t have a measure of financial backstop they never had before, but the common denominator seems to be the level of anxiety that seems to consume them even more than when they had significantly less money.

Still, I know what you’re saying… Give me more money and I’ll take my chances! Because one might assume that people with vastly higher income would generally be happier, right?

Breaking News! Studies show far less of a relationship between money and happiness than you might think …

Somewhat surprisingly, it appears that once certain lower thresholds of needs are met, the general satisfaction that comes with a higher income flattens out at fairly modest income levels.

Data shows that the degree of happiness is definitely not linear, especially beyond a certain point. A 2010 Princeton study put this flattening at incomes around $75,000 (as described in this Time article). The study focused on peoples’ day-to-day happiness, as opposed to longer-term contentment.

While those making significantly below $75,000 indicated lower levels of happiness because of inherent difficulties in meeting basic needs, increasing income bands above $75,000 did not show corresponding increases in happiness.

And since incomes and lifestyles vary across the U.S., this “happiness threshold” can differ significantly by state, as shown in this map. For example, people tend to identify the level above which they aren’t significantly happier at around $65,000-$75,000 in the majority of states, while this rises to around $90,000-$100,000 in higher-cost states, mainly on the east and west coasts.

The cover story of the November 2017 issue of National Geographic is on “The Search for Happiness”. While the subject of this blog post is the relationship between money and happiness, the article focuses on general happiness around the world, which is shown to be the highest in Denmark, Costa Rica, and Singapore.


The profiles of these places identify a common sense of happiness that correlates with family, health, and a sense of purpose, in many cases enabled by having basic needs met. Most interesting is that there is very little mention of money itself!  (FYI, the “happiest” place in the U.S. based on similar criteria is in Boulder, Colorado)

So If You’re Generally Happy at Different Incomes, What’s The Problem?


If people seem to be just about as happy making $75,000 a year as those at $200,000, or $1 million, why do we care if it doesn’t increase higher up the scale?  Well, asked a different way, it seems there is an underlying sea of discontent when people are asked some variant on the question “what amount of income would it take to eliminate all your financial concerns?”.

The answer has invariably been at some level just above one’s current tier of income. It seems people very rarely say “right where I am right now!”

For example, people making $30,000 per year might say $40,000 would solve all their problems. Many of those in the $200,000 range feel that $250,000 is the ticket. Interesting! (The Princeton study also corroborates this, with people saying they would feel “much happier” at about 10% above their current income, regardless of the respondents’ income, even though the data goes on to show this isn’t necessarily true once they get there because then they want the next level).


Coffee Break – I just discovered the very cool Urban Bean in downtown Detroit, and I’ll definitely be coming back! Not only for the great vibes (jazz and techno on a Tuesday morning) but the creative coffee drinks like the Pure Evil latte — featuring amoretto and cherry.



I also met some great people, one of whom (Klara with a K, shown here) was in Detroit for the very first time and is doing a video for her YouTube channel called Spirit Vehicle.  Her site says she is “doing what I can to help fix fractured feelings, balance out any wobbly spirits and raise frequencies with a big old serving of reality”. Ties in nicely with today’s post, I must say!

As if you needed further evidence sliced differently, a separate poll by CNN called the “American Dream Poll” boiled down into ranges where people said they would simply “be happy“. Just over half (51%) said it was under $100,000 per year. And asked how much it would take to “feel rich“, 60% indicated an amount less than $250,000, with the most typical answer being between $100,000 and $200,000.

Keep in mind that the absolute level indicated in the answers is not what’s important — it’s that people again overwhelmingly tend to provide answers that were above their current income, assuming they will be happy if only they made “that much more”!

However, as the CNN American Dream Poll sub-headline states:

“Most people know in their heart of hearts that making gobs of money can’t guarantee true happiness”

It’s not difficult to see the societal dilemma in this.

The average person thinks more happiness is just around the corner (like the bar with the sign “Free Beer Tomorrow” –think about that one for a moment).

Human nature, as evidenced in these studies, exposes the risk that people may be living their entire lives thinking it’s never quite enough. There’s always the next level of income to strive for, and thus happiness is just out of reach.

If you’re constantly restless about your current state, ask yourself why. If it’s because Maxwell next door just got a new Range Rover and you wish you could afford one too, your anxiety may be of questionable origin. But if you’re young and just getting established, and you want to be able to support a family and someday buy a house and send the kids to college, then a certain amount of “positive” restlessness is understandable.

It seems there can be forms of “good striving” and “bad striving” –the latter which is driven by envy, comparison, or that uneasy feeling of just wanting “more”. Taken to extremes, we even see examples of billionaires engaging in questionable business practices (or at least not appearing content with their status) in their drive to simply keep accumulating.

Are We Just Focusing on the Wrong “Things”?

Not convinced yet? Doesn’t it still seem intuitive that having more income to purchase more of the things you want would make you more happy? Another answer may lie in the form of how you define “things”.

You may have been hearing in recent years that Millennials value experiences over physical items, and they may be on to something. This is illustrated in a comprehensive article in the Wall Street Journal that explains that a general perception that buying material goods is more satisfying may be misplaced for a couple of reasons:

1) The “lasting impact” of whatever physical item you buy is temporary. You may enjoy the thrill of a purchase but do not maintain the feeling over time. And,

2) Satisfaction from experiences turns out to be longer-lasting and more personal. For example, you may show off your new car to your neighbor until he/she gets a newer, better one (while yours just gets older and loses the new-car smell). But that unique trip you took or event you attended carries with it memories that are yours alone and cannot be duplicated.

Don’t get me wrong, you might be very happy to get a nice raise or bonus. And you might run out and by a giant TV or expensive designer shoes with the newfound cash (middle daughter – “did he just say shoes?!”). And you may very well be thrilled to obtain those things, at least for a while. But does this make you a happier person overall?

Finally, If “Happy” is Elusive, Maybe “Content” is the Goal

One of my all-time favorite quotes, and one I take to heart very day is:

“Wealth isn’t how much you have, but how little you want”

To me, money can correlate to contentment, over time and with the proper perspective. That feeling that you have just enough. That your budgeting and planning has put you in a position to not worry where the rent or grocery bill will come from, and in a bigger sense not lose sleep over the long-term financial security of you and your family.

In that context, money certainly appears to be able to “buy” these things.  Mo’ money mo’ problems? Only if you let it.

You see, we’re all different in our aspirations, and I think we can all agree that having money is absolutely necessary to function in life, at the very least as the transactional means to achieving food, shelter, and clothing.

But don’t confuse the hoped-for happiness that comes with more money or more things with contentment!

A recent book on the topic has made a huge impression on me. It’s from Mo Gawdat, called “Solve for Happy – Engineering Your Path to Joy”. Gawdat, a top executive at Google, has essentially created an “algorithm for happiness”. Before you get too skeptical that someone can actually reduce happiness to a formula, please hear him out if you get a chance (there are also a number of YouTube videos of him explaining this).

In a nutshell, true contented happiness (as opposed to the potential giddiness of temporary happiness we often seek) boils down to comparing what the world gives us versus what we expect from it. As Gawdat says, “If the world gives us what we expect, then we are happy”. The book goes into a thorough examination and is well worth the read.

So, do I have all the answers? Of course not. And am I “happy” all the time? Far from it. But as far as your money goes, having a frame of mind that allows you to crave and ultimately realize contentment may be much better than constantly dwelling on comparisons, setbacks, unrealistic expectations, and where that next rush of transient “happy” will come from.

Let me know what makes YOU happy here, or leave a comment