13 Dec How to Buy Long-Term Happiness
Common logic suggests the more money you make the happier you will be. Research shows this is true, but only to a point.
Someone who makes a modest amount of money is measurably happier than someone who makes no money. And someone who makes a large amount of money is somewhat happier than someone who makes a small amount. But past a certain threshold – and it is not very high – having more money makes very little difference in raising levels of happiness and very quickly loses its effect.
So what’s the magic number? In the United States, it’s about $75,000 a year.
Using data gathered from about a half million Americans, Princeton researchers found that higher incomes indeed made for better moods on a daily basis, but once household incomes approached the $75,000 mark, more money did not create more happiness. What does that suggest?
That after some basic needs, like shelter, food and health, are taken care of, your capacity for material happiness is more or less maxed out. It also suggests that focusing on making more and more money, and buying your way to a happier life is a plan likely to fail. Money, it seems, can buy you only temporary happiness, not long-term happiness.
It turns out that what does buy lasting happiness is spending money on others. Research by a psychology professor at the University of British Columbia, and a Harvard business professor determined that money more effectively leads to happiness if you are careful not to overindulge, if you spend on experiences rather than things, and most importantly if you spend on other people.
That all got me to thinking about two very different ways of handling one’s wealth:
- As an owner
- As a steward
An owner is internally focused. A steward is externally focused.
An owner thinks, ‘I earned this money, it’s mine, and I deserve this money.’ A steward thinks, ‘This money is a blessing, and possibly I happened to be in the right place at the right time.’
An owner is preoccupied with acquiring more money. A steward is concerned with identifying a purpose for the money, using it to make the world a better place.
An owner holds on to possessions tightly, afraid of losing what he has acquired, spending energy hoarding money. A steward holds to things loosely and does not fear losing them, preferring to invest money for a greater good.
Whether you earn a little or a lot, acting as a steward is a healthier approach. It requires having a higher level of faith, and admitting that you cannot control the outcomes of your decisions. That kind of thinking can lead to a life of real fulfillment, joy, and peace, and help build a meaningful legacy. Those who are on the journey of living fully understand that.
Are you more of an owner or a steward?