How Much Money Do You Need? Less Than You May Think

By Shlomo Maital

 

  Mother Teresa…

  New research by Elizabeth Dunn (UBC) and Michael Norton  (Harvard),  (“Happy Money: The Science of Spending”), about the link between money and happiness,  is summarized in a recent (July 7) Op-Ed in the Global New York Times. 

  Here are their main findings:

  •  Using Gallup data collected from almost half a million Americans, researchers at Princeton found that higher household incomes were associated with better moods on a daily basis — but the beneficial effects of money tapered off entirely after the $75,000 mark.
  • ·         In research we conducted with a national sample of Americans, people thought that their life satisfaction would double if they made $55,000 instead of $25,000: more than twice as much money, twice as much happiness. But our data showed that people who earned $55,000 were just 9 percent more satisfied than those making $25,000.
  • ·         we teamed up with the developmental psychologist Kiley Hamlin and gave toddlers the baby-equivalent of gold: goldfish crackers. Judging from their beaming faces, they were pretty happy about this windfall. But something made them even happier. They were happiest of all when giving some of their treats away to their new friend, a puppet named Monkey.  …. rather than focusing on how much we’ve got in our bowl, we should think more carefully about what we do with what we’ve got — which might mean indulging less, and may even mean giving others the opportunity to indulge instead.

 

Among the many wrongheaded ideas we economists have dumped on the world, is the worst one of all – that the more money you have, the happier you are. Over the years, I’ve taught people with a whole lot of money, and many were very unhappy, because they sacrificed their family life for the money and ended up realizing they made a really really bad deal.

 By the way, the optimum amount of money in the U.S. is very close to average household income.

  So if you’re seeking happiness, look for it in a different place than the economists counsel – in giving some of your money away, wisely,  to those who lack enough of it, rather than using it to buy more needless junk to stuff our homes and closets with. 

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