“Money doesn’t buy happiness.” That’s the conventional wisdom. It’s also the wisdom that is obviously flawed for millions (billions?) who can’t pay their bills for basic necessities. Several years ago, a study determined that money does buy happiness, until it doesn’t. An income of about $84,000 is at the inflection point above which more income does not necessarily improve happiness. A more recent study nudges that up to $105,000 in America. The increase in happiness is greatest as it buys more necessities. Additional increases allow savings, comforts, and simple luxuries like more frequent vacations. At some point, people are satiated. Just because they can buy or spend more doesn’t mean they enjoy their time more. That satiation point is $105,000 in North America and as low as $35,000 in Latin America. Those are averages, however. Individuals are not average. For some, an extra 20% will increase happiness. For some, 20% less is enough. Ask yourself and think about your friends and family. How does happiness correlate for you and them? (Gotta check that lottery ticket.)

3 thoughts on “Money Buys Happiness Somewhat

  1. Happiness and wealth was a key factor that figured into my decision to retire at 55 and forego the additional retirement benefits that would accrue over the following 10 years. It was a conscious decision, one resisted by my boss but agreed to by my partner. We set new goals which resulted in less travel, increased focused on extended family and our future expanding family, hoping for grandchildren someday. fifteen years later we are very happy that we did so. Retirement allowed me to pursue my interest in arts, performance and creation, gave me the room and time recover good health, and gave our lives space to breathe and nurture. Health, nurturing and the luxury to stroll through our days with leisure had been prohibited by the corporate life on the grid. We have less money, deal with fewer demands on our time, and have satisfying relationships with people we enjoy. Was it worth the lifestyle (and therefore financial reduction)? You bet!


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