Money Doesn't Make People Happy

Can money buy happiness? Well, no one knows. That's the point of this piece from Forbes. The general conclusion is that money doesn't make people happy, but people with more money are happier than those who have less. Sound confusing? Here are but a few quotes from the piece that may straighten things out a bit:

Once a country gets fairly rich (though much poorer than the United States), further economic growth does not seem to make its citizens any happier.

So, money does not buy happiness. Or does it? "In every society, at any point in time, richer people are happier," points out Will Wilkinson, a policy analyst at the Cato Institute in Washington D.C., who runs a blog on happiness research and public policy. "But that in itself doesn't tell you much about the relationship between money and happiness."

Richer people, after all, tend to have high-status jobs. They tend to have more control over their lives at work--why pay someone six figures if you're not going to ask her to use her own judgment? They also have higher expectations and will be comparing themselves to wealthier people. It's hard to say what is really driving the results: money, status or expectations.

Perhaps each society's richer people are also happier because happiness comes not from absolute wealth but from relative wealth--recall H.L. Mencken's quip that "a wealthy man is one who earns $100 a year more than his wife's sister's husband." A more skeptical view is that while it means something to compare my happiness with that of the guy asking me for change on the street, it means nothing to compare my feelings today to those of my grandfather in 1950--or those of a Portuguese shopkeeper or a Japanese salaryman.

I think wealthier people are happier in general, but it's not because they have more money. In fact, I hypothesize that it's the opposite casual relationship -- that happier people become wealthier than unhappy people. Why? Happier people have a better outlook on life, they think the impossible is possible, they dream, they work well with others, and on and on. Let's face it, happier people simply have more of the qualities that our society values -- and in a free-market economy a monetary value is placed on these qualities -- a value that's higher than that of people who do not possess these qualities. Hence, happy people make more and are wealthier.

What do you think? Does this make sense to you or am I all wet? Let the world know what you think in the comments below.

Comments

[Cathy]

I agree with you, but only to a point. I think it's probably hard to be happy if you're poor, stressing about paying rent or wondering where your next meal will come from. But are we talking about real wealth (like having financial independence or being able to leave a substantial estate to your family when you die) or are we talking about enough money to live comfortably? I fit in the latter category, which has enabled me to make choices that limit my income but increase my quality of life - in a sense, I am wealthy enough to do that. But I don't consider myself wealthy. I do consider myself happy, though, and I'm working on the wealthy without sacrificing the happy :)

[sabi]

hii,
i'm defnetly agree with you..but the thing is that if you are wealthy and you are not having good health and also you are not having much friends then what will you do? yes ofcorse you can live with your money. but u cannot find peace and happiness. and you cannot buy friends with your money. and if you are not so strong at finatially atleast you have yous friends with whome you can share your emotions and about money,you can get it from any source....
soo be happy as well as healthy.

thank you
hav a nice time..
sabi

[aniu]

i like very much one idea, that happiness is when you have 100$ a year more than your wife's sister's husband.