Let's read some facts, figures and survey reports if money can buy happiness, and how money effects our lives and why rich people are not happier than the poor ones. These survey reports or finding are not the end of theories but it can teach us an some important life lessons about money, and happiness.
Americans have on average gotten much richer over the past several decades than they were in previous generations.
The inconvenient truth, however, is that there has been no meaningful rise in the average level of happiness.
In 1972, 30 percent of Americans said they were very happy, and the average American enjoyed about $25,000 (in today’s dollars) of our national income. By 2004, the percentage of very happy Americans stayed virtually unchanged at 31 percent, while the share of national income skyrocketed to $38,000 (a 50 percent real increase in average income).
The story is the same in other developed countries. In Japan, real average income was six times higher in 1991 than it was in 1958. During the post–World War II period, Japan was transformed at unprecedented speed from a poor nation into one of the world’s richest countries. But the average happiness of a Japanese citizen, measured on a scale of 1–4, stayed exactly the same at 2.7.
In some countries, there is even some evidence that economic growth can create unhappiness. This is generally the case for nations experiencing rapid and chaotic development and thus opportunities for great wealth for the first time.
Studies show that lottery winners, heiresses, and the 100 richest Americans are only slightly more satisfied than the guy toiling for his pay in the generic office-park cubicle. Still, mere mortals find it difficult to allow that an extra digit or two on the paycheck won't put a permanent smile on our faces.
We assume that a sportier car, a bigger house, a better-paying job, or that dress will bring us joy because, well, they did in the past, right?
Not really, says Daniel Gilbert, a Harvard psychology professor and the author of Stumbling on Happiness. "Research reveals that memory is less like a collection of photographs than it is like a collection of impressionist paintings rendered by an artist who takes considerable license with his subject," Gilbert writes. We forget that the new-car high deflated well before our first trip to the mechanic, and the raise came with stressful late nights at the office and a steeper tax tab.
Money doesn't buy happiness, say a couple of Princeton University researchers who found the link between cash and a good mood to be "greatly exaggerated and mostly an illusion.''
Rich people spend more time in high-stress activities than people with modest resources or poor people, they found.
Those with the highest incomes spend more time working, worrying, shopping, taking care of the kids and exercising, and less time relaxing with a book or an uplifting news story (like this one).
At Princeton, economist Alan Krueger and psychologist Daniel Kahneman measured how people of different income levels spend their time, and which of these activities are enjoyable. (Though he's a psychologist, Kahneman won the 2002 Nobel Prize in economics.)
Their results: The rich are not lazing on the beach at St. Tropez for six months of the year, no matter what you see in the glossy photos in mutual fund ads. They're stuck in traffic, worrying about their kids and spending long hours at the office.
"The belief that high income is associated with good mood is widespread but mostly illusory,'' the researchers announce today in the journal Science.
"People with above-average income are relatively satisfied with their lives but are barely happier than others in moment-to-moment experience, tend to be more tense, and do not spend more time in particularly enjoyable activities.''
Pulling in the big bucks makes people more likely to say they are happy with their lives overall -- whether they are young or old, male or female, or living in cities or remote villages, the survey of more than 136,000 people in 132 countries found.
Another survey shows that a key element of what many people consider happiness -- positive feelings -- is much more strongly affected by factors other than cold, hard cash, such as feeling respected, being in control of your life and having friends and family to rely on in a pinch.
"Yes, money makes you happy -- we see the effect of income on life satisfaction is very strong and virtually ubiquitous and universal around the world," said Ed Diener, a professor emeritus of psychology at the University of Illinois who led the study. "But it makes you more satisfied than it makes you feel good. Positive feelings are less affected by money and more affected by the things people are doing day to day."
Studies reveal another toll that money takes. An international team of researchers led by Jordi Quoidbach report in the August 2010 issue of Psychological Science that, although wealth may grant us opportunities to purchase many things, it simultaneously impairs our ability to enjoy those things.
Their first study, conducted with adult employees of the University of Liège in Belgium showed that the wealthier the workers were, the less likely they were to display a strong capacity to savour positive experiences in their lives. Furthermore, simply being reminded of money (by being exposed to a picture of a huge stack of Euros) dampened their savouring ability.
Read more: New research reveals that reminders of wealth impair our capacity to savor life's little pleasures
Can Money Buy Happiness? This post includes a story about a forty-two-year-old forklift operator in Corbin, Kentucky, named Mack Metcalf who won $65 million Powerball jackpot. But did it change his life in a positive way or was he happier than before? Unfortunately he died at the age of forty-five, only about three years after his lottery draw, racked with cirrhosis of the liver and hepatitis.