6 ms·

It Turns Out Money Does Buy Happiness

72 points by rkwasny 4y ago

j0hnyl 4y ago
Article is paywalled, but I always thought that $75k/figure was bullshit, even adjusted for a very high cost of living area and inflation. There is just so much convenience money can buy, so many stressors that can be eliminated if you just write a check. I think happiness is largely tied to "health" and better health can be bought up to a point.
- grecy 4y ago
  I’ve always taken this old saying to be a warning about not giving up too much life in the endless pursuit of more money
  - j0hnyl 4y ago
    Sure, but like anything it's a balance. There's a point where vigorous pursuit of money will help, and a point at which there are diminishing returns.
- magwa101 4y ago
  Agree. Money buys time, with time, you can workout, sleep and eat better.
  - deusuxmachina 4y ago
    The challenge is that the option to use money to resolve issues fast becomes to a tendency to resort to the conveniences of money. This tendency censors me from meaning embedded in everyday life, and it's something i have to work to avoid. Not even getting to the part about all the sacrifices I've made to make this money.
- MandieD 4y ago
  Think I heard that $75k figure bandied about when I was in college, and that was over 20 years ago when gas was about $1.25/gallon and $300k got a decent house in a Jersey suburb (or a near-mansion in my part of Central Texas). So probably somewhere in the $150k-200k/yr range today.
  - revlolz 4y ago
    In all likelihood a 75k number was output to an equation where there are two earners making that because I agree the 125 to 150 range is where households begin independence now. Anecdotally, I've debated this with friends and often times luxary and entertainment is 100% overlooked when in reality people have to do some sort of hobby or entertainment to make life tolerable.
serjester 4y ago
A correlation of .09 tells you absolutely nothing. The effect is visible and valid only for between 1 and 4 people out of 100.
- RugnirViking 4y ago
  That's a bit of an unusual way of characterizing it. Isn't a low correlation just implying that there are other factors that have a stronger influence? Which makes sense, I mean personality and lifestyle surely have to have large impacts
  - serjester 4y ago
    A low correlation tells you that the relationship between the two specific variables isn’t meaningful. It doesn’t tell you anything about other variables, maybe you’re thinking of R^2? Regardless both metrics assume you’re dealing with a linear model which is a big assumption in its own right.
- rafaelero 4y ago
  If that's the bar you want to use, then you will discover it is also hard to find anything that matters to happiness. As the authors put it: "The correlation between average happiness and log(income) is 0.09 in the experience sampling data, for example, and the difference between the medians of happiness at household incomes of $15,000 and $250,000 is about five points on a 100-point scale. The flattening and accelerating patterns are even smaller modulations of a small effect. However, the emotional effects of other circumstances are also small. KD reported that the effect of an approximately fourfold difference in income is about equal to the effect of being a caregiver, twice as large as the effect of being married, about equal to the effect of a weekend, and less than a third as large as the effect of a headache."
tiagod 4y ago
I'm not sure, after a certain threshold, more money = more happiness. But I'm quite sure not having the bare minimum to live your own life brings unhappiness. Nothing lifted me up as much as finally having the income necessary to gain my independence from my parents, and I see many friends also in their late 20s struggling to achieve it and suffering because of it. Right now, an average wage is not enough for this. Two might barely cut it. And the unhappiness is rising. Protests are growing. I worry for my generation and the new ones.
- DougWebb 4y ago
  There's a transition through several states: not enough, barely enough, just enough, and more than enough. It's a sharp transition; there's a small difference in income needed to go through these stages, but a huge difference in stress and happiness from one side to the other. My definitions: - Not enough: you're having to choose which necessary expenses to pay and which ones to not pay. Are your children going to be hungry, or are they going to be cold? - Barely enough: you can pay necessary expenses, but you have to micromanage every dime and make sure deposits clear before expenses are paid. You're forced to buy cheap things that don't last instead of quality things that are less expensive long-term. The slightest mistake in timing deposits/expenses with the resulting fees, or the smallest unexpected expense, throws you back into "Not enough" - Just enough: basically the same as Barely enough, but you've got a little leeway on the cash flow timing and sometimes you can spend more on quality. - More than enough: You can set up automated payments for regular expenses, and no longer have to worry about cash flow timing. That's a HUGE stress reduction. You're building savings for unexpected expenses.
  - paxys 4y ago
    There are plenty more stages here: - You have enough saved up that you don’t have to care about unexpected medical bills, car repairs etc in the thousands of dollars. - You can pay for vacations and other unique experiences. - You can move to nicer neighborhoods, send your kids to nicer schools. - You can offload stress and inconveniences to others. Hire chefs, nannies, personal assistants, fly first class or private. - You get to a stage where your money is making more money than most people’s net worth just by sitting around, and “work” is something you do for fun and fulfillment rather than survival. People are kidding themselves if they think each successive stage of wealth doesn’t also come with more happiness. Yes they might be diminishing returns, but they are returns nonetheless.
metadat 4y ago
JS-free archive link: https://archive.today/DQC9o https://archive.today/DQC9o
MrDresden 4y ago
It buys options. Going from none to some, and then enough feels great. After that I can imagine there to be diminishing returns.
Felminor 4y ago
Depends on the person I believe. I want to buy and renovate a small chateau fulltime and building a park and greenhouse and stuff. When I tell this to people most say 'you know this is soooo much work's and I have to correct them that's a lot of fun. I need a certain amount of money to do so. Otherwise I need to keep working full-time until 60... On the other hand staying in an expensive resort gets old after a while. Not seeing family gets lonely. But way too many people in our society struggle anyway
rg111 4y ago
Money buys something much more important than happiness- it buys you freedom.
- caiquelira 4y ago
  Not if you obtain that money by selling your freedom
  - rg111 4y ago
    Why are people always in a debate mode? Don't you think I already know what you just wrote?
mercutio2 4y ago
The idea money doesn’t buy happiness has been pretty thoroughly debunked in psychology for years, was my understanding. That greater income and wealth have diminishing returns is easily observed, but this idea there’s zero benefit past some threshold was always just innumeracy. It’s just that people are terrible at understanding curves that look vaguely logarithmic, combined with small sample sizes of people with very high incomes willing to take psychology surveys.
- fairity 4y ago
  > It’s just that people are terrible at understanding curves that look vaguely logarithmic, combined with small sample sizes of people with very high incomes willing to take psychology surveys. It’s also bc people gravitate towards beliefs that protect their ego, however false they may be. If you’re not wealthy, believing that wealth doesn’t make you happy is very comforting. It’s not so different from how religion is used to cope with life’s suffering.
  - roundandround 4y ago
    Huh? The article basically confirms that small things are worth more happiness than many fold increases in salary. The one silver bullet seems like the cognitive defect being debunked. I think society has changed a bit in terms of network effects and how much you had compared to a fixed group was more significant to both you and them when the original study was done.
    - fairity 4y ago
      The idea being debunked is that there's no correlation between income and happiness past ~$75k/yr. Whether or not this idea is wrong is actually besides my point. My point is that one of the main reasons this idea spread so quickly is because it provides comfort to those who are not wealthy.
      - roundandround 4y ago
        Sure, but a cursory reading of this article stokes the temporary impoverished billionaire who think of future wealth in a way largely interchangeable with religious views on heaven... It actually seems to say that disvomforts required to earn a lot of money would make you less happy than earning a good amount with less effort and it generally won't make up for more relevant factors in happiness. I.e. an easy tenure would make someone happier than being a law partner earning 4 times more.
nine_zeros 4y ago
That old $75,000 figure has gone through a lot of inflation.
- anthony100 4y ago
  Yeah, adjusted for current inflation, it's probably closer to $150,000 now.
aschearer 4y ago
I found the following paper actionable: "If Money Doesn't Make You Happy Then You Probably Aren't Spending It Right"[1]. > The relationship between money and happiness is surprisingly weak, which may stem in part from the way people spend it. Drawing on empirical research, we propose eight principles designed to help consumers get more happiness for their money. Specifically, we suggest that consumers should (1) buy more experiences and fewer material goods; (2) use their money to benefit others rather than themselves; (3) buy many small pleasures rather than fewer large ones; (4) eschew extended warranties and other forms of overpriced insurance; (5) delay consumption; (6) consider how peripheral features of their purchases may affect their day-to-day lives; (7) beware of comparison shopping; and (8) pay close attention to the happiness of others. [1]: https://scholar.harvard.edu/files/danielgilbert/files/if-money-doesnt-make-you-happy.nov-12-20101.pdf https://scholar.harvard.edu/files/danielgilbert/files/if-mon...
- RigelKentaurus 4y ago
  Great post! I agree with the "not spending it right" part. For me, money gives me the security and options to spend on what's important to me.
buggy6257 4y ago
How Money Works YT channel has a great video about this: https://www.youtube.com/watch?v=-ra34dUWcmw https://www.youtube.com/watch?v=-ra34dUWcmw More glibly: "'Money doesn't buy happiness!' Do you live in America...? Because it buys a waverunner. You ever seen a sad person on a waverunner?" - Daniel Tosh
- five82 4y ago
  Hell, I'm even happier pretending to be on a waverunner in GTA V.
RcouF1uZ4gsC 4y ago
Money buys time and attention. If you have money, you can go to any restaurant you like and order anything you like and now have to worry. IIRC DHH mentioned something like that happened with him after BaseCamp became popular. You can avoid waiting in lines. At the airport, instead of waiting in long security lines and crowded terminals, you can buy first class and go through smaller dedicated security lines and wait in a nice lounge. You can even avoid the trip to a crowded airport completely if you fly via private jet. You can pay someone to clean your home. All these things buy time and attention. If you use that extra time and attention for something worthwhile - that is up to you
RigelKentaurus 4y ago
That money buys happiness is painfully obvious to anyone who has been poor. I went through a few years in my twenties when I didn't have more than a hundred dollars and it was no fun. The constant stress made me say "never again," and I became disciplined at saving and investing after I started working. Now that we've way more than we need, I won't say that my happiness has grown, but the peace of mind is invaluable.
- brianwawok 4y ago
  The survey never said it didn’t buy happiness for poor people. Did you read the original paper?
RHSman2 4y ago
You can buy a dog. That buys happiness
MarkMc 4y ago
Money doesn't make you happy. I now have $50 million but I was just as happy when I had $48 million. — Arnold Schwarzenegger
onemoresoop 4y ago
I think it's a misjudgment on either side. Of course not having money and being stressed out financially would be alleviated by having money, this part is as obvious as drinking water quenching one's thirst. On the other hand when thinking, being solely preoccupied and achieving things only for money's sake eventually leaves one empty, shallow and unhappy. Too much money does change people for the worse, it turns you into a snob if you get carried away in that direction. Plenty of people would be happy if they could make a living and not having to strain themselves or stress out about money matters, all that without needing to be the richest on the block. In that sense when having an unhappy attitude getting hold of a large chunk of money would only temporarily alleviate that unhappiness.
- filoleg 4y ago
  "Having money isn't everything, not having it is."
neura 4y ago
Not saying this is the complete picture, but the first thing I thought of was "Maybe it's just that $75,000 was the bare minimum to break the barrier of some specific level of unhappiness at the time the data was collected from the sample population?" which immediately led to "Also, $75,000 was probably a pretty outdated value well before the data was even published."
shove 4y ago
Damn, I knew inflation was taking a toll but that’s quite a leap ;)
agumonkey 4y ago
I beg to differ, happiness is very relative and beyond food and shelter, the rest is up to you. I was happier paying some money to help charities for free than having an IT job. It's really up to your mind to define happiness in a way.

72 points by rkwasny 4y ago

Article is paywalled, but I always thought that $75k/figure was bullshit, even adjusted for a very high cost of living area and inflation. There is just so much convenience money can buy, so many stressors that can be eliminated if you just write a check. I think happiness is largely tied to "health" and better health can be bought up to a point.

grecy 4y ago
I’ve always taken this old saying to be a warning about not giving up too much life in the endless pursuit of more money
- j0hnyl 4y ago
  Sure, but like anything it's a balance. There's a point where vigorous pursuit of money will help, and a point at which there are diminishing returns.
magwa101 4y ago
Agree. Money buys time, with time, you can workout, sleep and eat better.
- deusuxmachina 4y ago
  The challenge is that the option to use money to resolve issues fast becomes to a tendency to resort to the conveniences of money. This tendency censors me from meaning embedded in everyday life, and it's something i have to work to avoid. Not even getting to the part about all the sacrifices I've made to make this money.
MandieD 4y ago
Think I heard that $75k figure bandied about when I was in college, and that was over 20 years ago when gas was about $1.25/gallon and $300k got a decent house in a Jersey suburb (or a near-mansion in my part of Central Texas). So probably somewhere in the $150k-200k/yr range today.
- revlolz 4y ago
  In all likelihood a 75k number was output to an equation where there are two earners making that because I agree the 125 to 150 range is where households begin independence now. Anecdotally, I've debated this with friends and often times luxary and entertainment is 100% overlooked when in reality people have to do some sort of hobby or entertainment to make life tolerable.

serjester 4y ago

A correlation of .09 tells you absolutely nothing. The effect is visible and valid only for between 1 and 4 people out of 100.

RugnirViking 4y ago
That's a bit of an unusual way of characterizing it. Isn't a low correlation just implying that there are other factors that have a stronger influence? Which makes sense, I mean personality and lifestyle surely have to have large impacts
- serjester 4y ago
  A low correlation tells you that the relationship between the two specific variables isn’t meaningful. It doesn’t tell you anything about other variables, maybe you’re thinking of R^2? Regardless both metrics assume you’re dealing with a linear model which is a big assumption in its own right.
rafaelero 4y ago
If that's the bar you want to use, then you will discover it is also hard to find anything that matters to happiness. As the authors put it: "The correlation between average happiness and log(income) is 0.09 in the experience sampling data, for example, and the difference between the medians of happiness at household incomes of $15,000 and $250,000 is about five points on a 100-point scale. The flattening and accelerating patterns are even smaller modulations of a small effect. However, the emotional effects of other circumstances are also small. KD reported that the effect of an approximately fourfold difference in income is about equal to the effect of being a caregiver, twice as large as the effect of being married, about equal to the effect of a weekend, and less than a third as large as the effect of a headache."

tiagod 4y ago

I'm not sure, after a certain threshold, more money = more happiness. But I'm quite sure not having the bare minimum to live your own life brings unhappiness. Nothing lifted me up as much as finally having the income necessary to gain my independence from my parents, and I see many friends also in their late 20s struggling to achieve it and suffering because of it. Right now, an average wage is not enough for this. Two might barely cut it. And the unhappiness is rising. Protests are growing. I worry for my generation and the new ones.

DougWebb 4y ago
There's a transition through several states: not enough, barely enough, just enough, and more than enough. It's a sharp transition; there's a small difference in income needed to go through these stages, but a huge difference in stress and happiness from one side to the other. My definitions: - Not enough: you're having to choose which necessary expenses to pay and which ones to not pay. Are your children going to be hungry, or are they going to be cold? - Barely enough: you can pay necessary expenses, but you have to micromanage every dime and make sure deposits clear before expenses are paid. You're forced to buy cheap things that don't last instead of quality things that are less expensive long-term. The slightest mistake in timing deposits/expenses with the resulting fees, or the smallest unexpected expense, throws you back into "Not enough" - Just enough: basically the same as Barely enough, but you've got a little leeway on the cash flow timing and sometimes you can spend more on quality. - More than enough: You can set up automated payments for regular expenses, and no longer have to worry about cash flow timing. That's a HUGE stress reduction. You're building savings for unexpected expenses.
- paxys 4y ago
  There are plenty more stages here: - You have enough saved up that you don’t have to care about unexpected medical bills, car repairs etc in the thousands of dollars. - You can pay for vacations and other unique experiences. - You can move to nicer neighborhoods, send your kids to nicer schools. - You can offload stress and inconveniences to others. Hire chefs, nannies, personal assistants, fly first class or private. - You get to a stage where your money is making more money than most people’s net worth just by sitting around, and “work” is something you do for fun and fulfillment rather than survival. People are kidding themselves if they think each successive stage of wealth doesn’t also come with more happiness. Yes they might be diminishing returns, but they are returns nonetheless.

metadat 4y ago

JS-free archive link: https://archive.today/DQC9o https://archive.today/DQC9o

MrDresden 4y ago

It buys options. Going from none to some, and then enough feels great. After that I can imagine there to be diminishing returns.

Felminor 4y ago

Depends on the person I believe. I want to buy and renovate a small chateau fulltime and building a park and greenhouse and stuff. When I tell this to people most say 'you know this is soooo much work's and I have to correct them that's a lot of fun. I need a certain amount of money to do so. Otherwise I need to keep working full-time until 60... On the other hand staying in an expensive resort gets old after a while. Not seeing family gets lonely. But way too many people in our society struggle anyway

rg111 4y ago

Money buys something much more important than happiness- it buys you freedom.

caiquelira 4y ago
Not if you obtain that money by selling your freedom
- rg111 4y ago
  Why are people always in a debate mode? Don't you think I already know what you just wrote?

mercutio2 4y ago

The idea money doesn’t buy happiness has been pretty thoroughly debunked in psychology for years, was my understanding. That greater income and wealth have diminishing returns is easily observed, but this idea there’s zero benefit past some threshold was always just innumeracy. It’s just that people are terrible at understanding curves that look vaguely logarithmic, combined with small sample sizes of people with very high incomes willing to take psychology surveys.

fairity 4y ago
> It’s just that people are terrible at understanding curves that look vaguely logarithmic, combined with small sample sizes of people with very high incomes willing to take psychology surveys. It’s also bc people gravitate towards beliefs that protect their ego, however false they may be. If you’re not wealthy, believing that wealth doesn’t make you happy is very comforting. It’s not so different from how religion is used to cope with life’s suffering.
- roundandround 4y ago
  Huh? The article basically confirms that small things are worth more happiness than many fold increases in salary. The one silver bullet seems like the cognitive defect being debunked. I think society has changed a bit in terms of network effects and how much you had compared to a fixed group was more significant to both you and them when the original study was done.
  - fairity 4y ago
    The idea being debunked is that there's no correlation between income and happiness past ~$75k/yr. Whether or not this idea is wrong is actually besides my point. My point is that one of the main reasons this idea spread so quickly is because it provides comfort to those who are not wealthy.
    - roundandround 4y ago
      Sure, but a cursory reading of this article stokes the temporary impoverished billionaire who think of future wealth in a way largely interchangeable with religious views on heaven... It actually seems to say that disvomforts required to earn a lot of money would make you less happy than earning a good amount with less effort and it generally won't make up for more relevant factors in happiness. I.e. an easy tenure would make someone happier than being a law partner earning 4 times more.

nine_zeros 4y ago

That old $75,000 figure has gone through a lot of inflation.

anthony100 4y ago
Yeah, adjusted for current inflation, it's probably closer to $150,000 now.

aschearer 4y ago

I found the following paper actionable: "If Money Doesn't Make You Happy Then You Probably Aren't Spending It Right"[1]. > The relationship between money and happiness is surprisingly weak, which may stem in part from the way people spend it. Drawing on empirical research, we propose eight principles designed to help consumers get more happiness for their money. Specifically, we suggest that consumers should (1) buy more experiences and fewer material goods; (2) use their money to benefit others rather than themselves; (3) buy many small pleasures rather than fewer large ones; (4) eschew extended warranties and other forms of overpriced insurance; (5) delay consumption; (6) consider how peripheral features of their purchases may affect their day-to-day lives; (7) beware of comparison shopping; and (8) pay close attention to the happiness of others. [1]: https://scholar.harvard.edu/files/danielgilbert/files/if-money-doesnt-make-you-happy.nov-12-20101.pdf https://scholar.harvard.edu/files/danielgilbert/files/if-mon...

RigelKentaurus 4y ago
Great post! I agree with the "not spending it right" part. For me, money gives me the security and options to spend on what's important to me.

buggy6257 4y ago

How Money Works YT channel has a great video about this: https://www.youtube.com/watch?v=-ra34dUWcmw https://www.youtube.com/watch?v=-ra34dUWcmw More glibly: "'Money doesn't buy happiness!' Do you live in America...? Because it buys a waverunner. You ever seen a sad person on a waverunner?" - Daniel Tosh

five82 4y ago
Hell, I'm even happier pretending to be on a waverunner in GTA V.

RcouF1uZ4gsC 4y ago

Money buys time and attention. If you have money, you can go to any restaurant you like and order anything you like and now have to worry. IIRC DHH mentioned something like that happened with him after BaseCamp became popular. You can avoid waiting in lines. At the airport, instead of waiting in long security lines and crowded terminals, you can buy first class and go through smaller dedicated security lines and wait in a nice lounge. You can even avoid the trip to a crowded airport completely if you fly via private jet. You can pay someone to clean your home. All these things buy time and attention. If you use that extra time and attention for something worthwhile - that is up to you

RigelKentaurus 4y ago

That money buys happiness is painfully obvious to anyone who has been poor. I went through a few years in my twenties when I didn't have more than a hundred dollars and it was no fun. The constant stress made me say "never again," and I became disciplined at saving and investing after I started working. Now that we've way more than we need, I won't say that my happiness has grown, but the peace of mind is invaluable.

brianwawok 4y ago
The survey never said it didn’t buy happiness for poor people. Did you read the original paper?

RHSman2 4y ago

You can buy a dog. That buys happiness

MarkMc 4y ago

Money doesn't make you happy. I now have $50 million but I was just as happy when I had $48 million. — Arnold Schwarzenegger

onemoresoop 4y ago

I think it's a misjudgment on either side. Of course not having money and being stressed out financially would be alleviated by having money, this part is as obvious as drinking water quenching one's thirst. On the other hand when thinking, being solely preoccupied and achieving things only for money's sake eventually leaves one empty, shallow and unhappy. Too much money does change people for the worse, it turns you into a snob if you get carried away in that direction. Plenty of people would be happy if they could make a living and not having to strain themselves or stress out about money matters, all that without needing to be the richest on the block. In that sense when having an unhappy attitude getting hold of a large chunk of money would only temporarily alleviate that unhappiness.

filoleg 4y ago
"Having money isn't everything, not having it is."

neura 4y ago

Not saying this is the complete picture, but the first thing I thought of was "Maybe it's just that $75,000 was the bare minimum to break the barrier of some specific level of unhappiness at the time the data was collected from the sample population?" which immediately led to "Also, $75,000 was probably a pretty outdated value well before the data was even published."

shove 4y ago

Damn, I knew inflation was taking a toll but that’s quite a leap ;)

agumonkey 4y ago

I beg to differ, happiness is very relative and beyond food and shelter, the rest is up to you. I was happier paying some money to help charities for free than having an IT job. It's really up to your mind to define happiness in a way.