Almost everyone I know — conservative and liberal, wealthy and non-wealthy, spiritual and non-spiritual – would say the happiness of a life should be measured in emotional terms rather than financial terms. That is, they would say the key to a happy life is not to accumulate as much stuff as possible, but to accumulate more positive emotional experiences than negative emotional experiences. For example, a happy life is one that includes more joy, fascination and affection, and less anxiety, sadness and anger. Correct?
Despite this, many of us live our lives in a way that suggests that more money and more stuff is the secret to happiness. We work long hours away from things that give us happiness and subject ourselves to stressful work environments all, we tell ourselves, in pursuit of happiness.
Is that logical?
To a large extent, it is. So sayeth a 2010 Princeton /Gallup /Healthways study. The study tracked people’s emotional well being, or “the quality of a person’s everyday experience, such as joy, fascination, anxiety, sadness, anger and affection.” The study found:
“…as income decreased from $75,000, people reported decreasing happiness and increasing sadness and stress. The pain of life’s misfortunes, including disease, divorce, and being alone, is exacerbated by poverty. In other words, being divorced, being sick, and other painful experiences have worse effects on a poor person than on a rich.”
So, pursuing higher incomes does seem to lead to a happiness gain, because the day-to-day existence at higher income levels reduces overall sadness and stress.
But interestingly, the study also found:
“…emotional well being leveled off at $75,000/year. In other words, the quality of the respondents’ everyday emotional experiences did not improve beyond an income of approximately $75,000 a year; above a certain income level, people’s emotional well being is constrained by other factors, such as temperament and life circumstances.”
So for the 11% of the U.S. population earning personal incomes above $75,000/year, having a higher income does not lead to additional happiness gain.
(Side note: Interestingly, incomes above $75,000 ARE associated with a higher “life evaluation” or “a person’s thoughts about his or her life.” As the study’s authors concluded, “High incomes don’t bring you happiness, but they do bring you a life that you think is better.”)
Remember, the $75,000/year income tipping point identified by Princeton is an average. The precise tipping point obviously varies depending on each individual’s life circumstances. For example, the level may be higher if you have a lot of kids, a lot of debt, no familial financial safety net, or you live in a high cost community. But the important point for this discussion is that a point of diminishing returns does seem to exist where the pursuit of higher incomes no longer furthers the pursuit of happiness.
Today is the holiday celebrating the life of a man who said “Life’s most persistent and urgent question is, ‘What are you doing for others?’” That seems like as good a day as any to contemplate where our personal income-happiness tipping point lies.