Can Money Buy You Happiness?

Many say that money can’t buy happiness; nearly everyone wants to test that theory.
Most people believe they would become happy if they only had more money; however, lottery winners provide telling case studies of what happens when people’s financial dreams come true. The stories of financial ruin, divorce, misery and even murder of those who win lotteries seems to be the norm. We still believe money will make us happy. Many argue, like Jimmy Stewart in the movie “It’s a Wonderful Life”, when he asked the Angel Clarence if he had any money — the angel said: “we don’t use money in heaven,” to which Jimmy Stuart replied, “well it sure comes in handy down here!”


People dream of having more money and having financial independence. But many times once they have money they find no lasting happiness, and any hope they had that money may deliver them vanishes. Money itself is not bad or evil; it’s the love of it that causes harm to the soul — “for the love of money is a root of all kinds of evil” (1Timothy 6:10). We unfortunately have been making this mistake from the beginning of time, including King Solomon in the Old Testament. He said after achieving and acquiring all that he put his mind to desire: “but when I surveyed all that my hands are done, and what am I had worked so hard to achieve, I realized that it was pointless, like chasing after the wind”( Ecclessiastes 2:11).
Modern day positive psychology – the study of happiness and how to improve it – is one of the fastest growing philosophies on happiness. The field has spawned an entire industry of self-help books, coaching, courses and consultancy. People think that if they just made one more bonus or sold one more item or got one more promotion, then their world and their family’s world would be so much better, that this isn’t necessarily true. If people don’t have it, they want to think it into existence, claim it, and hopefully obtain it.

The wise steward
Money has its place, and being a wise steward is our responsibility. Proverbs 30:9 says, “For if I grow rich, I may deny you and say, ‘Who is the Lord?’ Or I may become poor and steal and thus insult God’s holy name.” This verse indicates there is a balance for our hearts not to be swept away in avaricious desire for money or unrealistic abasement of it. However, for most workers real income has barely shifted for decades, and more than a quarter of working Americans earn what are officially classified as “poverty-level wages.” Forty-six million people in the US live below the poverty line and even the middle class is in financial crisis. Nearly half of Americans would struggle to find $400 in an emergency. Money isn’t a fringe issue to our wellbeing. It’s at the very heart and soul of it.
According to the research (Kahneman and Deaton’s), in modern America the average income required to be happy day-to-day, to experience “emotional well being” is about $75,000 a year. According to the researchers, past that point, adding more to your income “does nothing for happiness, enjoyment, sadness or stress.” A person who makes, on average, $250,000 a year has no greater emotional well-being, no extra day-to-day happiness, than a person making $75,000 a year. In Mississippi it is a bit less, in Chicago a bit more, but the point is there is evidence for the existence of a financial happiness ceiling. The super-wealthy may believe they are happier, and you may agree, but you both share a delusion. The happiness money offers doesn’t keep getting more and more potent — it plateaus. The research showed that a lack of money brings unhappiness, but an overabundance does not have the opposite effect. The biggest mystery is why we’re so bad at knowing what will give us true satisfaction in the first place, and why we pursue relentlessly getting more money.
Most would agree that your happiest moments are spent with friends and loved ones. If you have money to travel and be with those you care about, is that not happiness production? It absolutely is. We have to remember, though, that the most extravagant vacations or experiences do not garner happiness, while modest and free experiences spent with those we value and love can. Part of the problem is that happiness isn’t a quality like height, weight or income that can be easily measured and given a number (whatever psychologists try and pretend). Happiness is a complex emotional state. So, perhaps it isn’t surprising that we sometimes have trouble acting in a way that will bring us the most happiness, or truly putting real merit on those things that are intrinsically valuable.

What does bring happiness?
If not money, then what causes happiness? Consider an experiment led by psychologist Sonja Lyubomirsky about doing kind acts for others. Researchers asked people to do five kind acts one day per week for six weeks. Examples included donating blood, writing a thank-you letter or visiting an elderly relative. People experienced a significant boost in happiness for doing kind acts for others.
You probably think happiness involves living a good life. A good life includes being a good person, a moral person. Doing good things for others will likely make you happier. If money can’t buy a good life, then money can’t buy happiness. So next time you are buying a lottery ticket because of the amount it is paying out, or choosing a purchase by looking at the price, or comparing jobs by looking at the salaries, you might do well to remember to think hard about how much the behavior, purchase, or job will really promote your happiness, rather than simply relying on the flesh and the culture around you to help you decide. Money doesn’t buy you happiness, and part of the reason for that might be that money itself distracts us from what we really enjoy.

Jeffery Masters, President of Jeffery W. Masters & Associates. Securities offered through LPL Financial, member FINRA/SIPC. Investment Advise offered through Independent Financial Partners, a Registered Investment Advisor. Independent Financial Partners and Jeffery W. Masters & Associates are not affiliated with LPL Financial. Call 954.977.5150 Jeffery.Masters@LPL.com

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