I came upon a very interesting blog post today in which the author describes a study that found people who are more ambitious and achieve great career and financial success aren’t really much happier than the more laid-back people that aren’t as financially successful. You can read the post here. NTUMYTDDN6M5
It really is something to think about. We all know some of those workaholic types that are always busy chasing the almighty dollar. It’s a tricky issue because, while money and happiness are related to a certain extent, you reach a point of diminishing returns. Think about it this way:
Going from earning $25,000 a year to $50,000 should lead to a huge increase in happiness. The $25k increase in wages helps that person go from the working poor to right around the median income. It enables them to buy adequate food, housing, healthcare, and have money leftover for savings and retirement (at least here in the midwest with our low cost of living). The person may be working more hours or a more sophisticated job, but the extra work makes a big difference in their status of living.
Going from earning $150,000 to $175,000 (a similar $25k increase) does far less to increase that person’s happiness. They already had all their needs met with plenty left for entertainment, charity, etc. The extra $25k is certainly nice; maybe they’ll vacation in Europe rather than Mexico. But it’s not enough to dramatically make life better. This person is typically working 60 to 80+ hours a week, and the hours and stress of the job can start to get to them.
I don’t know where the best point on the income curve is, though studies have shown that around $75,000 is about right to achieve optimal happiness. The point is that, while it is certainly worthwhile to work hard, develop skills, and “over-achieve” to increase our income, we need to be mindful that there comes a point where making more won’t lead to meaningful benefits.
I know I’m not at that level yet (and you may not be either), but it’s something to think about the closer I get to that point.