One of the most pervasive financial questions - Does Money Buy Happiness? - is back in the news again. In the video, Shane Tenny, CFP®, shares the contradictory results and some questions he thinks are worth pondering.
Transcript:
[00:00:01.440 --> 00:00:11.899] Hi there, Shane Tenny, with Spaugh Dameron Tenny, here to address once again one of the most pervasive of all financial questions, and that is, does money buy happiness?
[00:00:12.070 --> 00:00:40.480] You see, there are individuals much smarter than I that have tackled research on this topic over the last 2 decades, and we're beginning to see contradictory evidence. In one of the earlier pieces of research conducted by Nobel Prize-winning author and Researcher Daniel Kahneman in 2010, the conclusion was that money and happiness were correlated only up to an income level of about $110,000 in today's inflated value.
[00:00:41.120 --> 00:00:57.420] Beyond this, there really didn't seem to be a correlation of wealth and happiness. For years, many of us in the financial field relied on this body of evidence to propagate the conclusion that money doesn't correlate with happiness.
[00:00:57.680 --> 00:01:22.679] 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 correlated well over $500,000 a year of annual income, even stretching all the way up into the millions.
[00:01:23.310 --> 00:01:33.549] And so here we have very smart, learned, accomplished individuals, conducting clinical research and coming to almost opposite results.
[00:01:33.790 --> 00:01:39.520] Contradictory at best, definitely confusing or inconclusive at worst.
[00:01:39.780 --> 00:01:41.959] And so where does that leave us?
[00:01:42.160 --> 00:01:46.650] Well, that leaves me asking 2 follow-up questions.
[00:01:46.970 --> 00:01:52.610] And the first is, what about this question feels so important?
[00:01:52.730 --> 00:01:56.620] In fact, if money does buy happiness, what then?
[00:01:56.880 --> 00:02:00.140] Or if it doesn't, how does that affect me?
[00:02:00.590 --> 00:02:08.700] I think what I want to offer is a little bit of self-reflection on why this question feels relevant.
[00:02:08.780 --> 00:02:23.130] And it occurs to me that perhaps it is just an apparently innocent manifestation of our gravitational pull to compare ourselves with others.
[00:02:23.120 --> 00:02:38.819] Is the question around money buying happiness just a way of trying to explain our own sense of satisfaction or dissatisfaction in life compared to those we see around us.
[00:02:39.760 --> 00:02:52.699] Is this part of the pull we feel when we compare our own children's accomplishments to those of others, when we compare ourselves on social media, to the activities or the trips of other people.
[00:02:53.180 --> 00:03:03.970] And if I find my own heart feeling jealous or dissatisfied or complaining, perhaps I can just blame it on my economics.
[00:03:04.670 --> 00:03:07.370] I don't know; I'm just asking the question.
[00:03:08.080 --> 00:03:12.580] But of course there's a good corollary in here that I've talked about in other occasions.
[00:03:12.680 --> 00:03:19.670] And that is while I can't find evidence that feels conclusive on the topic.
[00:03:19.920 --> 00:03:27.870] Now, it does cause a question, is there anything that is correlated with happiness and within my control.
[00:03:28.590 --> 00:03:44.840] And a growing body of evidence most recently from the University of California's Berkeley School shows there is an attitude and an outlook that is consistently correlated with a sense of well-being.
[00:03:45.180 --> 00:03:51.930] It's gratitude, Yup, and attitude of gratitude to borrow the cliche.
[00:03:52.250 --> 00:04:10.249] Now, what is gratitude? I think we all know it when we see it, but they've identified two key attributes, and gratitude is really a sense of finding goodness around us and identifying the source of that goodness outside of ourselves.
[00:04:10.670 --> 00:04:15.040] There is good going on. And it's not because of me.
[00:04:15.730 --> 00:04:21.669] That is perhaps the simplest way to approach this question of what is gratitude?
[00:04:21.860 --> 00:04:24.880] The great thing about it. It's free.
[00:04:24.970 --> 00:04:38.869] Now, there's no question. Researchers have concluded that some individuals are more inclined, or have a greater proclivity, to have an outlook of gratitude than others, but it is available to all.
[00:04:39.190 --> 00:04:46.140] In fact, one of the attributes they identify as being commonly linked with gratitude is an outlook of curiosity.
[00:04:46.350 --> 00:04:58.190] And so do you find yourself? Or are you open to growing in curiosity about the world, about the people around you, about what happens in your daily life?
[00:04:58.980 --> 00:05:18.069] Of course, there are also exercises we can do, such as a gratitude journal, stopping each day and pausing to reflect on 3 things you are grateful for gratitude. Letters can be written to people you care about and thank them for their role in your life.
[00:05:18.910 --> 00:05:29.589] So where does this leave us? Hopefully with a path towards greater sense of well-being and happiness, not because of money, but because of gratitude.
[00:05:30.020 --> 00:05:32.969] Something to think about. I'll see you back here next time.
Shane Tenny is the managing partner of Spaugh Dameron Tenny. Along with hosting the Prosperous Doc® podcast, Shane has a true passion for behavioral finance, helping clients and audiences understand how to develop successful strategies based on their unique temperaments. An accomplished and highly engaging speaker, Shane is regularly interviewed for television and podcasts, is actively involved in the Financial Planning Association®, and contributes to industry advisory boards.