Can Money Truly Buy Happiness?

The world around us will tell you that money IS happiness. Watching celebrities and rich people alike, the average person’s mind will think that they have something better than them. The status, the wealth, the happiness, hell… what more COULD they want? The truth may be shocking to the majority of you reading this blog. Let’s dive in!

Would you rather cry your sorrows away in a 30 year old Honda Civic (basically worth less than a pack of gum), or a brand new Lamborghini Aventador (half a million dollars)? Let me try out my expertise here… mind-reading psychic. I can almost bet that you clearly picked the Honda Civic, because it’s a reliable car that will last you as long as you inevitably need to cry for. Comedy aside – clearly the Lamborghini sounds more appealing, right? But why is that?

Princeton University conducted a study in 2010, which observed the correlation between money and happiness. This study found that day-to-day happiness increases with the more money you make. However, this is only up until a capping point of $75,000. After this point, it was found that there are no additional benefits found for happiness. This brings us back to the question – Can Money Truly Buy Happiness? According to this study, happiness actually reduced in the participants with anything over the cap of $75,000. There’s a wide range of reasons why this could be happening, but let’s start with the obvious.

Money in essence, is best described as a tool. When you think of a tool, this typically means an object, or instrument, that is capable of performing a task, or action. Side note: I’m actually writing a book called The Money Formula – which directly describes the phenomenon I’m explaining. Look out for the upcoming release date if you want a deep dive into money. Money, when used as a tool, can provide infinite opportunities. However, just because you can purchase a new car or house, does not mean that you will be happier in your overall life just because you own more possessions.

What research has found is that if you have an extremely low income, you may struggle to afford the basic necessities that you need in every day life. This would not even allow you the opportunity to have fun, or buy nice things when your primary goal is to simply survive; let alone be healthy enough to get through each day. So what ends up happening? The study found that at it’s $75,000 “happiness cap” you will have reached a solid level of income to not only survive but to thrive. This can allow you to now afford some nice things, and will even allow you to spend money freely on material things, in most cases. Now that you’re here, further happiness is dependent on you. Oh, and also what it is that you actually want out of life. For example, it doesn’t matter whether you drive a brand new Honda or a brand new BMW; you will get from Point A to Point B in the same way: driving. Do you feel happier? Do you feel like a cooler person in the more expensive BMW? Does your mind care that you’re a narcissist and want to focus on trying to impress others in your fancy car? The reality is: NO!

However, let’s take a similar scenario but on the opposite spectrum. If you are struggling to pay bills, and have a 30-year old car that likes to have a temper tantrum worse than your two-year old, you end up in a different scenario. It might be a miracle if this thing starts the first, or even the tenth time. Would you feel happier if you didn’t have to fight with this car every day – hoping to get to work on time for once in your life? Imagine not having to make a dramatic excuse for why you are late for the eighth time this month. Maybe you have to call out because you’re late, and have to take the car to the mechanic every few weeks… this truly is a problem. Operating in a life of scarcity does allow money to have a profound impact on your happiness; but, once your needs are met and we your car is operational, further happiness depends on you.

Again – money is a tool, which allows for more opportunities to be happy, but money itself is not capable of making you happy (especially after the “happiness cap”). Once your basic needs are met, the money becomes opportunity towards other things. Many people would love to have more money, because they see all of the things they could buy in their head. In reality, you will not be this beaming ray of sunshine with any number of material possessions you own. You have to dig deep – and search what it is that would make you happy… because, shocker, it’s not money.