Can Money Buy Happiness?

The latest issue of Money magazine has a really good article called "Can Money Buy Happiness?" You should try to read the full article, but here is a summary of the main points:

Survey of people who said that they were "very satisfied" with life:

<$20K - 22%

$20K - $50K - 30%

$50K - $90K - 42%

$90K+ - 43%

This is very interesting. I believe that as long as you have enough money to provide for basic needs (so that you don't have to stress about paying the bills), more money beyond that does not lead to a proportionate increase in happiness. The article gave three reasons why this might be so:

You overestimate how much pleasure you'll get from having more. They said that intially after you purchase a new item, you feel very happy. But you quickly become used to having it around and it no longer makes you as happy. People make a mistake in thinking that perhaps they just bought the wrong item. :)

More money can lead to more stress. For example, having a big house in the suburbs might not increase your happiness if you end up spending 3 hours in commute traffic every day.

You endlessly compare yourself with the family next door. They said that your happiness depends mainly on how we feel compared to those immediately closest to us, and not to the ultra-rich that we see on TV or magazines. So if you have more money, but everyone around you also has more money, then you won't necessarily be happier!

So then, if money is not the key to happiness, what is? Again, three possibilities:

Friends and family are a mighty elixir. The people around us are most responsible for our happiness. Personally the happiest time in my life was getting my bachelor's degree at UCLA, which coincidentally was the time that I was the poorest. But all my friends were poor too, and we figured out all these creative ways to have fun without a big budget, and had a blast.

Doing things can bring us more joy than having things. I think this is really profound. You can surround yourself with things, but if you don't actually do anything you will just get bored. Interestingly, they also said that vacations are worthwhile, because even if we are stressed out on them, or things don't go as planned, as time passes we remember only the good things that happened.

Applying yourself to something hard makes you happy. Right on the money again. My satisfaction with work doesn't seem to be tied to how many hours I spend there (or how few), but on whether I feel that what I am doing is important and interesting.

In conclusion, they said that it important for us to 'Think Happy." They said that some characteristics of happy people are 1) they don't waste time dwelling on unpleasant things 2) they tend to interpret ambiguous events in positive ways, and 3) they aren't bothered by the successes of others.