Does Money Buy Happiness?

Have you ever thought that if you just had [insert dollar figure] this amount of money, you'd have no worries and be happy? Then, it should come as no surprise that "Does money buy happiness?" is one of the most pervasive financial questions.

Does Money Really Buy Happiness? It Depends...

Over the last two decades, many individuals much brighter than me have tackled research on this topic. Interestingly, we are beginning to see contradictory evidence.

One of the earlier studies conducted by Nobel Prize-winning author and Researcher Daniel Kahneman in 2010 concluded that money and happiness were correlated only up to an income level of about $110,000 in today's inflated value. Beyond this, there didn't seem to be a correlation between wealth and happiness. For years, many in the financial field relied on this body of evidence to propagate the conclusion that money doesn't correlate with happiness.

However, in 2021, researchers at the University of Pennsylvania's Wharton School of Business conducted another study on the topic, and the findings were almost 180 degrees different. In fact, they found that happiness, a sense of well-being, and money were well correlated with incomes over $500,000 a year, even into the millions.

And here we have very smart, learned, accomplished individuals conducting clinical research and coming to almost opposite results, contradictory at best, definitely confusing, or inconclusive at worst.

So, where does that leave us? Keep reading or watch the video below.

Two Questions to Ponder

Well, that leaves me asking two follow-up questions.

1. What about this question feels so important?

In fact, if money does buy happiness, what, then? Or if it doesn't, how does that affect me?

I want to offer a little self-reflection on why this question feels relevant. And it occurs to me that perhaps it's just an apparently innocent manifestation of our gravitational pull to compare ourselves with others.

Is the question about money buying happiness just a way of explaining our sense of satisfaction or dissatisfaction in life compared to those we see around us? Is this part of the pull we feel when we compare our own children's accomplishments to those of others or when we compare ourselves to the activities or trips of other people?

And if I find my own heart feeling jealous, dissatisfied, or complaining, perhaps I can just blame it on my economics. I don't know; I'm just asking the question.

2. Is there anything that is correlated with happiness and within my control?

A growing body of evidence, most recently from the University of California's Berkeley School, shows an attitude and an outlook consistently correlated with a sense of well-being.

It's gratitude — the attitude of gratitude, to borrow the cliche.

What Is Gratitude?

We all know it when we see it, but the University of California's Berkeley School identified two key attributes.

Gratitude is a sense of finding goodness around us and identifying the source of that goodness outside of ourselves. There is good going on, and it's not because of me.

That's perhaps the simplest way to approach this question of what gratitude is.

The great thing about it: It's free.

There's no question that researchers have concluded that some individuals are more inclined, or have a greater propensity, to have an outlook of gratitude than others, but it is available to all.

In fact, one of the attributes they identify as being commonly linked with gratitude is an outlook of curiosity.

Do you find yourself, or are you open to growing in curiosity about the world, the people around you, and what happens in your daily life?

Appreciation and Gratitude

I recently listened to a podcast from my friend Dan Sullivan at Strategic Coach, and he made an interesting observation.

In his experience, gratitude seems to be an effective antidote for almost every negative emotion. He shared that it's hard to nurse a sense of worry and anxiety when you're also feeling an undergirding sense of gratitude. It's hard to be jealous when you're also feeling thankful.

How Can I Practice Gratitude?

There are also exercises we can do, such as:

• Begin a gratitude journal
• Stop each day and pause to reflect on three things you are grateful for
• Write notes or gratitude letters to people you care about and thank them for their role in your life

The Struggle: You Can Only Control What You Can Control

Now, let's face it: There are moments when we all struggle with being grateful or appreciative and, in turn, feel disappointed, upset, or discouraged. I've found that, often, I'm comparing my current situation to where I expected, hoped, or wanted to be.

Unfortunately, when I measure the future I was hoping for or expecting against where I actually am, I become aware of the deficit. And that can lead to an inward focus instead of a sense of gratitude.

However, when I focus on what is within my control, I realize that I can change my perspective. If I look back and see how far I've come, where I was a year or five or ten years ago, and where I am now, I realize how much has been accomplished — all that has occurred and all the growth that has happened. I'm reminded of how much there is for which to be grateful.

That sense of gratitude, curiosity, and appreciation always manifests as a greater sense of happiness, contentment, and joy. It occurs to me that the saying that life is 10% what happens to you and 90% how you respond to it is pretty profound.

Final Thoughts

So, where does this leave us? Hopefully, it will lead us to a greater sense of well-being and happiness, not because of money but because of gratitude.

If money and happiness cause you uncertainty, please reach out to one of our financial planners. For years, we've helped our clients and their families achieve their financial and lifestyle goals and develop a healthy relationship with money.

CRN202712-7695190