“If you are already unhappy, money alone cannot save you.”
However, what I discovered most interesting about this study was the finding that life satisfaction and emotional well-being can actually decline if you exceed these thresholds. Once you have reached your ceiling, give attention to things like social comparison (e.g., the way you rank next to the Joneses) and achieving further material gains (e.g., extra money, more things). In other words, you’re driven by the idea that others are doing higher than you, so you have got to do more to maintain up, causing your life satisfaction to diminish.
What is the connection between funds and well-being?
In a related 2023 study by psychologists Daniel Kahneman and Matthew Killingsworth, they pitted their opposing theories against one another in a controversial collaboration to seek out out whether happiness actually plateaus at a certain income level.
In 2010, Kahneman famously theorized that emotional well-being doesn’t increase with an annual income of $75,000, while a decade later Killingsworth argued that it did. Finally, after surveying a brand new group of participants, they collectively discovered that while happiness could increase with extra money, there was a limit to the flexibility to defend against happiness.
If you are already unhappy due to heartbreak, grief, clinical depression, or “other misery” like trauma or experienced discrimination, money can only ease your suffering as much as $100,000 a yr, but not much beyond that.
Commenting on these findings, Killingsworth said: “This suggests that for most people, higher income is associated with greater happiness.” . [but the] An exception is people who find themselves doing well financially but are unhappy.
For example, in the event you are wealthy and miserable, extra money won’t help. For everyone else, extra money was related to higher happiness to barely different degrees.”
What is the conclusion of all these studies about money, happiness and stress?
Here’s what all these studies tell me: First, in the event you do not have enough to satisfy your basic needs, extra money is undeniably the answer to that problem. This all the time jogs my memory of a classic exchange where Ross says, “I just never look at money as a problem,” to which Rachel angrily replies, “That’s because you have it.”
If you have got enough money, this is not any longer an issue. However, it could possibly bring focus to your other problems. As Vitug puts it in his book: “Money solves money problems, but it is not the answer to life problems.”
As I said originally of this book, there may be a reason why there are such a lot of unhappy millionaires and billionaires. There’s also a reason why I’ve met so many individuals within the FIRE community who’ve successfully amassed a seven-figure nest egg, only to seek out that they were still unhappy after retiring early.
