Can money buy happiness? While it’s undoubtedly true that having money beats being broke, research suggests that once you have enough to cover your daily needs, anything above this may not increase your happiness.
In 2009, psychologist Daniel Kahneman and economist Angus Deaton conducted a study by analysing 450,000 respondents across the United States. Their findings suggest that although money does buy some happiness, it’s capped at about $75,000, implying that once you have enough to live comfortably, excess dollars don’t crack a smile.
In 2012, business coach Alan Furlong discovered that although he had built a multi-million dollar coaching business in only 13 months, he was waking at 3 a.m. with a racing heart and mind full of terror.
He was referred to a heart specialist, who believed he had a heart condition. “I said, ‘No, you’re wrong’. I knew exactly what it was; it was stress. Unrelenting stress,” says Furlong. Instead of accepting his diagnosis, Alan chose to uncover what was going on emotionally and physiologically.
“Although money does buy some happiness, it’s capped at about $75,000 … excess dollars don’t crack a smile.”
“I stumbled on neuroscience, positive psychology [and] the science of happiness. I really delved into that to work out where I personally had gone wrong, and then used that science with the entrepreneurs that I mentored.”
Furlong’s research has led him to understand that the predominant reason we’re becoming richer, but not happier, is because the things that we think should make us happy actually don’t. “The house by the beach, the flash car, none of these things make us happier. There’s a thing called hedonistic adaption which kicks in after about six weeks. That Ferrari you’ve loved and wanted for two years, or 20 years, is an amazing car in week one, a great car in week two, a good car in week three.”
Once you lose the high from the acquisition of one thing, you need to chase it by purchasing something else. As for Furlong’s own stress, he discovered daily meditation, meaningful relationships and helping others has eased his troubled mind and body, so he can continue his mentoring.
Rebecca Farquhar was 35 years old and working a 65-hour week when she realized how unhappy she was. Although the policies she worked on in her six-figure salary government job made a difference to others, she was stressed, tired and dissatisfied with her life.
“I was making loads of cash and spending it on nonsense,” says Farquhar. “My ex was also on a lot of money, and by the time I ended that relationship we were each on $120,000 annually with no house [and] no real roots, knowing that all that money was just stuff. I was looking for more because I was not happy.”
“If your happiness is dependent on things such as possessions or the approval of others, then no amount of money will satiate your need.”
After that relationship, Rebecca and her new partner hatched a plan to sell everything and travel the world. “I wanted to lose [the money].”
They bought one-way tickets to Europe where they’ve been living and traveling frugally ever since—now in excess of three years.
“I’ve never been happier with my life,” she says. “We don’t have much money but we only need enough for the next adventure and then we can make more.”
If your happiness is dependent on things such as possessions or the approval of others, then no amount of money will satiate your need. However, according to anthropologist Stephen Juan, if you look inside yourself you can discover the true source of wealth.
“Intrinsic happiness comes from sources within you,” says Juan. “You cannot be happy if none of your sources are intrinsic and are all extrinsic. You must have inner peace, optimism, hope, joy, confidence … all the inside riches. Outside riches are nice, but not essential once you are comfortable and secure.”
A 2014 Gallup poll indicated that Paraguay is the happiest country in the world, but it’s by no means the richest, sitting around the middle, at 94 on the global rankings.
The poll asked only five questions to ascertain happiness; whether people felt rested, felt they were treated with respect, laughed or smiled a lot, whether they experienced enjoyment and whether they had learned or done something interesting the day before.
Perhaps, instead of chasing Ferraris and beach houses, we should be seeking those things that money can’t buy–laughter, sleep and everyday adventures.
This article by Danielle Colley originally appeared on Collective Hub.