“I am opposed to millionaires, but it would be dangerous to offer me the position.” – Mark Twain
Economist Angus Deaton recently won the Nobel Prize for his work on this subject.
Now I know what you are thinking. How can someone win the Nobel Prize for this topic when it has been studied since the invention of currency. Well Sir Deaton’s findings were quite different from prior work about money and happiness.
What he found is something that I know many of can relate to through our own experience or things we have witnessed from family or friends.
What did he find?
He found that making more than $75,000 per year doesn’t make you significantly happier on any given day.
Earth Shattering, I know.
Actually, that is not the part of that he won the Nobel for. Here is where his research gets interesting and applicable for the rest of us.
More money does not necessarily buy more happiness, but earning less money is associated with emotional pain.
Think about it! I grew up in a house where money was always a struggle and much of the time it was an emotionally painful struggle. Heck it still causes me pain today. I can only imagine what kind of emotional struggles it would cause for people making $40,000 a year and going through a divorce or major life event that would affect their happiness.
Deaton has also changed the way we look at the study of consumption, essentially how we use goods and services and what that means for our well-being. He’s changed the way economists measure living standards and poverty in developing countries. What he found was that in nations where money is not easily measured the consumption of goods and commodities is linked to similar feelings as the income observations.
Why is all of this work interesting?
What it shows is that by the most meaningful measures, how long we live, how healthy we are, and how much we know life has never been better. It also showed that while money can’t buy happiness it has a direct connection to how we look at the world around us and our health. Which have an indirect impact on our degree of pain or happiness we may feel.
How do we fix it?
I have found that across the income and asset spectrum people can benefit from developing a financial plan. It helps bring issues and pain to the forefront so that it can be addressed and help fix them. Money is a very difficult and important topic and it has an impact on so many aspects of our life, health and indirectly happiness. Why wouldn’t you want to develop a plan especially if it could potentially mean more happiness in your future?
If you would like to schedule some time to discuss your personal situation I am available by phone or face to face just email me at firstname.lastname@example.org or call me in the office at 336-310-4233.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.