How much money buys happiness?

can money buy happiness?
image: Josh Felise

Australia is ranked as the 10th richest country in the world, and yet we are ranked 2nd in the world for prescribed antidepressants, according to the Organisation for Economic Co-operation and Development.

Generally speaking, on a global scale, we are rich and unhappy.

Although having money beats being poor, research suggests that once you have enough to cover your daily needs anything above this does not bring you happiness.

In 2009 psychologist Daniel Kahneman and economist Angus Deaton conducted a study by analysing 450,000 respondents across the United States. Their findings suggest that although money does buy some happiness, it is capped at about $75,000US. This implies that once you have enough to live on comfortably, more money does not increase wellbeing or happiness.

In 2012 business coach, Alan Furlong discovered that although he had just built a multi-million dollar coaching business in only 13 months he was waking at 3am with a racing heart and a mind full of terror.

He was referred to a heart specialist who believed Alan had a heart condition.

“I said, “no, you’re wrong”, I knew exactly what it was; it was stress. Unrelenting stress” Furlong says.

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Instead of accepting his diagnosis Alan chose to uncover what was going on for him emotionally and physiologically. “I stumbled on neuroscience, positive psychology, the science of happiness. I really delved into that to work out where I personally had gone wrong and then use that science with the entrepreneurs that I mentored.”

Furlong’s research has led him to understand that the predominant reason that we’re becoming richer but not happier is because the things that we think should make us happy actually don’t.

“The house by the beach, the flash car, none of these things make us happier. There’s a thing called hedonistic adaption, which kicks in after about 6 weeks. That Ferrari you’ve loved and wanted for two years, or 20 years, is an amazing car in week one, a great car in week two, a good car in week three.’

Once you lose the high from the acquisition of one thing, you need to chase the high by purchasing something else.

Furlong discovered daily meditation, meaningful relationships and helping others has eased his stress so he can continue his mentoring.

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Renee Fagen* found that although the policies she worked on in her six-figure salary government job made a difference to others, she was stressed, tired and dissatisfied with her life. She was 35 years old and working a 65-hour week when she realized how unhappy she was.

“I was making loads of cash and spending it on nonsense,” Fagen says. “My ex was also on a lot of money and by the time I ended that relationship we were both on $120 p.a. each, no house, no real roots and knew that all that money was just stuff. I was looking for more because I was not happy.” Her relationship ended and Renee and her new partner hatched a plan to sell everything and travel the world. “I wanted to lose [the money]; I was crippled by it.”

They bought one-way tickets to Europe where they have been living and traveling frugally for three years.

“I’ve never been happier with my life. We don’t have much money, but we only need enough for the next adventure and then we can make more,” she says.

If your happiness is dependent on things such as possessions, or approval of others, then no amount of money will satiate your need, however, according to anthropologist, Dr Stephen Juan, if you look inside yourself you can discover the true source of wealth.

“Intrinsic happiness comes from sources within you,” says Juan. “You cannot be happy if none of your sources are intrinsic and are all extrinsic. You must have inner peace, optimism, hope, joy, confidence, etc – all the inside riches. Outside riches are nice, but not essential once you are comfortable and secure.”

A 2014 Gallup Poll indicates that Paraguay is the happiest country in the world, but they are the by no means the richest; they’re around the middle at 94th.

The poll asked only five questions to ascertain happiness – whether people felt rested, felt they were treated with respect, laughed or smiled a lot, whether they experienced enjoyment and whether they had learned or done something interesting the day before. Perhaps, instead of chasing Ferraris or beach houses of which we tire in weeks, we should be chasing laughter, sleep and interesting experiences.


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This article was first published here on The Collective Hub.

Check out Micahel Norton chatting about your happiness being affected by the way you spend your money.