The Magic Number
“The Countess may have been right that money can’t buy you class, and The Beatles were correct in that it can’t buy you love, but apparently it can buy you happiness.”
Hang on, money can buy happiness? That doesn’t seem right! Well, new research from Princeton University by professors Angus Deaton, Ph.D., a renowned economist, and Daniel Kahneman, Ph.D., a Nobel prize-winning psychologist has shown that money, or more specifically income, does actually provide more happiness- but only up to a certain point.
So what is this magic number at which one’s happiness peaks? It’s $75,000!
The study indicates that people who earn $75,000 a year report greater emotional well-being than those who earn less. And this number remains the same regardless of where you live and the expenses involved in living there (that is, regardless of whether you live in an expensive city like Sydney or a cheaper coastal town, your happiness will peak at $75,000).
And what happens after this magic number? How happy are those people who earn $100,000? You may guess VERY happy (I know I would!), but in reality these people report the same emotional well-being level as their counterparts who earn $75,000.
Of course, the happiness from a 75K income is not actually derived from the amount of money one has, but rather from the experiences that having this money enables one to have. Think about what makes you happy? Chances are it’s not looking at a bank statement with lots of fat zeros on it (but if it is, that’s fine- everyone is different!). For most people however, happiness is spending time with family and friends, going out to dinner, taking a vacation or trying something new. And unfortunately, most of these things require a certain amount of money to be performed comfortably.
Do you agree with these findings? Is $75,000 really the magic number at which happiness is at its greatest?