Hi Reader,
In December, the Wall Street Journal published an article detailing a survey based on this question:
"Exactly how much more income do you think you need to be happy?"
Before I share the results, take a minute to ask yourself, how much more income do you think you'd need to be happy?
But first,
🎙️ Did you catch the most recent podcast episode?
Listen to "Caregiving: Strategies and Resources for Women" as Eric and guest, Lili Fiore explore the unique challenges and effective strategies in caregiving, especially in the context of retirement planning for women.
|
Okay, here's what the survey showed:
The general result was that people across every income level felt they needed about 50% more income to be happy.
I repeat. Almost everyone said they needed more. Across every income level.
More specifically, the study showed that people making a median salary of $75,000 felt they needed $100,000 to be happy, while those already making $100,000 felt they needed $150,000.
See the irony?
Even people making $250,000 felt they'd need $350,000 to be happy. While $250,000 marks the top end of this study, I suspect the same trend would persist at higher incomes as well. Everyone feels like they need just a little more.
This phenomenon is not just limited to income; it's the same with wealth.
Another study focused exclusively on millionaires (Here's the link to the actual Harvard study) showed a similar failed belief that "more wealth = more happiness." In this study, across 2,000 millionaires (in some cases, the participants had significant wealth), the consensus belief was that it would require at least two times as much wealth to be happy.
This means someone with $2 million felt they would need at least $4 million to be happy, and someone with $4 million felt they'd need more than $8 million. Same problem.
Regardless of where you stand on the income and wealth spectrum, most of us have probably thought, "If I can get to $X million, I'll be happy."
But, if there's anything we can learn from these studies, it's that happiness, with regard to our money, is elusive, if it exists at all.
It's as if the happiness we seek from our money resides somewhere just over the horizon. The problem is that we can walk as far and as fast as we want, but the horizon remains frustratingly fixed in the distance.
If we think we'll be the outlier who might actually find happiness at some arbitrary level of wealth (that is, not surprisingly, higher than what we have today), consider the irony that is our personal experience:
Most of us have more wealth than we've ever had—in some cases, more than we ever thought we'd have.
Yet, I'm guessing most of us still elude perpetual happiness, comfort, and security with our wealth.
This isn't a personal failing; it's human nature. Even when the wealthiest American to ever live, John D. Rockefeller, was asked how much was enough, he responded, "Just a little bit more."
In full disclosure, this isn't my way of discouraging you from making more money or accumulating more wealth. Not at all!
I'm simply trying to bring awareness to the fact that we should probably stop assuming that happiness, comfort, or peace of mind will arrive once our portfolios hit some magical number in the future. They won't.
Ironically, accepting this as truth may be one of the keys to unlocking the very happiness we seek.
At best, money offers the potential for those feelings to exist, but it does not cause them directly.
You already know this, but what encourages feelings of happiness, comfort, and peace of mind is the pursuit of our purpose, deep relationships (and time) with people we love, and good health, to name a few.
Interestingly, these things can be had for little or no money, which means what we do with what we already have is likely to have a much bigger impact on our happiness than perpetually accumulating "more."
I'm happy to say that many of you figured this out long ago, but I wanted to share these thoughts with you because I know that we're all susceptible to the allure of "more money = more happiness." So, I thought you might find these studies to be a helpful reminder to stay focused on things that actually matter.
That is, doing things that are meaningful to you and spending time with those you love most.
Then, hit reply to this email with any questions. I read and respond to every message. 😃
Keeping Retirement Simple,
Eric Blake, CFP®
Thanks for subscribing! 📬
Not getting what you need? Unsubscribe