Many people strive to be financially successful and well taken care of. Many people place the goal of material wealth on a pedestal and seek this as something they believe will make them happy. There’s no doubt that a healthy income, sufficient funds not only for living expenses but for extra things like vacations and trips, a nicer car, clothing and material possessions are appealing. But new research has revealed that money isn’t everything, and instinctually we all know it probably never really was.
As of 2019, the average income of a working American is $31,133. In other words, the average American takes home $2,594 monthly. Hardly enough to pay for an extra trip yearly, especially with rent rates on the rise and hyperinflation causing the cost of many other goods and services, even basic necessities like food to skyrocket dramatically in just the past 6 months.
It’s always interesting to look at the data and draw your own conclusions. It’s also interesting to look at the data and see how people react or feel with where they’re at in life based on their perspective. Large scale empirical data, to understand different frameworks and mindsets better at scale.
Income has always been a hot topic, a hot button that has caused riff-raffs between the top 1% and the other 99%, when it was ‘occupy wall street’ or when the mortgage crisis happened and bankers got away with billions while everyday working Americans got laid off, lost their companies and their livelihood. There is no justifying corrupt economic behavior for one’s personal gain, when the economy and community are hurt at large.
We’d all like more income, but at what cost? If we reach a point where happiness doesn’t elevate any higher, is there truly a point to chase material wealth much further down the rabbit hole?
I remember reading a quote from a Native American tribe years ago that shared that within their tribe they believe that if one wants more than he needs, they are mentally ill and the tribe would seek to help them to cure this mental illness. Greed was essentially seen as a mental illness, yet here in our western culture greed is marketed as ‘good’ but is it really? What good is a man that gains the world and loses his soul?
Everything comes at a cost in life. Whether it’s income, relationship, health, the body of your dreams. Everything has a cost, and to pay that cost you need to know the price.
The Study That Changed My View On Money Forever
One such study cracked the lid wide open for me. Like many Americans I valued and pursued material wealth and at one point in my life it consumed me. Money was my crutch, my coping mechanism. My God, my everything! I worked my body to the bone 6 days a week and on the 7th day of the week I couldn’t even relax because I was so wound up with tension and stress, and the next day I had a full day ahead of me! So no time to even think about relaxing or resetting. The ‘day off’ was essentially a day of prioritizing and scheduling the following week. I was a mess.
The study that shifted my perspective was a very simple study that assessed the value of money, income and a persons general sense of well-being and happiness.
The study assessed people that made just $15,000 per year up to those who made $480,000 yearly. They were basically comparing those who were living in poverty, to the middle class, to the top 1% net worth individuals and what they found in this study shocked even the researchers.
The researchers found that those who made around 60-75k yearly had a sidways curve as far as life-satisfaction and experienced well-being were concerned. See the graph below:
The next graph however were as researchers expected. You’d think that seeing the overall life satisfaction and experienced well-being scores still rising with income you’d think that feelings and emotions would mimic that curve. But this graph is a bit different. It assesses the difference in positive feelings vs. negative feelings. Lower income people have more negative feelings and less positive feelings. Higher income people have higher levels of good feelings and lower levels of negative feelings.
Turns out, this is one study. This single study appears to show that wealthier people are indeed happier. Having money is nice. It can solve a lot of challenges and problems in one life. You can buy higher quality food, you can get higher quality medical care, even prevention measures that others cannot afford. You can invest more into the comfort of your home, your travel, this list goes on and on.
The Interesting Part About This Study No One is Talking About
The interesting part about this study that no one is talking about is that years ago there was another study that had findings that were quite different. In fact, quite the exact opposite from this study. This study revealed that people’s happiness levels essentially tapered off, reached a sort of plateau at about $75,000 per year.
What I find fascinating is that the study above shows a bit of a sideways graph in the 60-75k range.
Perhaps the first study illustrating that an income over $75k yearly didn’t extend it to those who made upwards of a $500k yearly, so they didn’t get as much data.
The mystery remains and the science is still open on this one, as it always should be. Science is a never ending pursuit of the highest probability and in this case, we have some conflicting studies and ideas, which often occurs in different research.
What do you think? If you’ve made under and over $75k yearly, did it affect your happiness in a drastic way at all?
There are so many factors that determine one’s state of happiness. They’re age plays a role I’d be willing to bet. How healthy they are, if they are in a happy relationship. If they like where they live, their city, town, community. There are so many factors that can be taken in to account.
We’ll leave it on this note. It wouldn’t hurt to have a few more bucks in your pocket, and if you feel that the money has consumed you a bit too much, you can always find a well vetted charitable cause to contribute to!
Recommended Reading: Financial Advisor Reveals 3 Stages To Wealth Creation And Easy Traps Along The Way
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