Will More Money Make You Happier?

Most people would say that having a lot of money is near the top of their list when it comes to what they want to achieve in life.

And it’s not because they’re greedy, but because people strongly believe that having more money will give them an overall better life.

Unfortunately, they would be wrong.

Studies repeatedly show that after an individual makes $75,000, having more money does not increase the well being of one’s life.

Just look at lottery winners for example.

When an individual wins the lottery, they experience a surge of happiness. The lottery winner buys a new car, a new home and starts eating more fancy food. And at first they’re thrilled by the contrast of their new life compared to their old one.

However, eventually their new lifestyle becomes the new baseline of living. As a result, the winner takes the money and new life for granted and the lottery winner’s happiness returns to the level of happiness it was before they won.

Typically, a lottery winner’s happiness comes from rising in wealth, not from standing still at a high level.

This is because as humans, our brains are extremely sensitive to changes, but not to absolute levels.

Psychologist have shown that humans have the tendency to adapt to new circumstances, regardless of whether they’re good or bad.

This is called hedonic adaptation and in many situations, hedonic adaptation is very helpful because it protects us from staying depressed over negative events for long periods of time.

Consequently, it also keeps us from staying happy over positive events, such as winning the lottery, for long periods of time.

In the book “The Happiness Hypothesis,” Jonathan Haidt, a psychology professor at New York University’s Stern School of Business, calls this The Adaptation Principle.

In the book, Haidt says,

“Whatever happens [to you], you’re likely to adapt to it, but you don’t realize up front that you will. We are bad at “affective forecasting” that is, predicting how we’ll feel in the future. We grossly overestimate the intensity and the duration of our emotional reactions.”

In the long run, it doesn’t really matter then what happens to you financially.

Does this mean that you shouldn’t pursue wealth or buy a lottery ticket?

No it doesn’t.

Definitely pursue wealth if you want to, but don’t hope on the idea of achieving happiness when you finally reach your end goal.

Remember, pleasure comes from making progress towards goals, not from achieving them.

As Shakespeare once said, “Things won are done; joy’s soul lies in the doing.”

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2 thoughts on “Will More Money Make You Happier?

  1. the “nut” is different for every family so once the basics are covered without financially worry about the bills and a few things like a vacation for the family once a year then you have a chance to make a difference with accumulated monies. Charities, donations to individuals and being a philanthropist even on a small scale feeds the soul.

    Like

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