Thursday, 12 March 2009

3 Reasons Money Doesn't Make Us Happy...

How I Heard About This: After a discussion with some friends about life goals, I started to think about whether more money was really going to make me any happier...
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Topic: People/Psychology


"Money doesn’t change you; it reveals who you are when you no longer have to be nice." -Tim Ferriss

PsyBlog talks about the relation between money and happiness:

1. It’s relative income that’s important.

As I’ve noted previously, money is relative. It turns out we don’t mind so much about our actual level of income, so long as we’re earning more than other people around us. Unfortunately as we earn more money we’re likely to be surrounded by richer people so we often end up failing to take advantage of the positive comparison.

2. Material goods don’t make us happy.

Acquiring things like houses and cars only have a transient effect on happiness. People’s desires for material possessions crank up at the same, or greater rate, than their salaries. Again, this means that despite considerably more luxurious possessions, people end up no happier. There’s even evidence that materialism make us less happy.

3. People don’t shift to enjoyable activities when they are rich.

People who earn more money don’t spend their time enjoying themselves, they spend their time at work, in activities likely to cause them more stress and tension. This may be because of ‘the focusing illusion’. When people think about earning more money they probably imagine they would use the money on recreational activities. In fact, to earn the money, they have to spend more time at work, and commuting to and from work.

WebMD says the following: "Psychological studies show that the wealthier people are, the more intense negative emotions they experience. These studies do not link wealth with greater experienced happiness."

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