Does Happiness Buy Money?

For many people, money doesn't seem to buy that much anymore. Millionaires are a dime a dozen; there are over sixteen million households in America with a net worth of at least $1 million. What does all the income and spending really add up to? When compared to other parts of the world, it must look like nothing more than a lot of excess consumption. 

Check this out: the United States spends more on trash bags than ninety other countries spend on everything. In other words, the receptacles of our waste cost more than all of the goods consumed by nearly half of the world's nations.

The end result is that our lifestyles may be packed with more stuff, but we feel less fullfilled. Consume more, enjoy it less. So, does money buy happiness? Recent studies instead point to the reverse: happiness may help you get rich. 

Changing your Frame of Reference
Doing work you love and having a fulfilling family life were all found to be strongly correlated with financial wealth. This was a common denominator among the millionaires interviewed by Thomas Stanley, author of The Millionaire Next Door. "It's like a recording," says Stanley. "Every time I talk to these people, it's the same thing: ‘I love my life. I love my family. I can't wait to get to work in the morning.’”

So, it may make sense to change one's frame of reference and recognize that perhaps happiness buys money, not the other way around.

Footnote: if your response is in the "yes, but" camp, then your target net worth might be around $1.5 million. According to studies of lottery winners and inheritors, a cash infusion of this size was optimal in bumping up happiness levels. Larger windfall amounts tended to be a psychological burden for many recipients.