Does having more money buy happiness? It does, to an extent, but the story is more complicated than a simple “yes”
Welcome to Plain English, part two of our journey into the science of happiness. I’m Jeff; the producer is JR; and you are listening to the best podcast for learning English. This is episode 180, so all the episode resources, and I mean all the episode resources, are available at PlainEnglish.com/180.
On today’s episode: having more money is definitely better for your happiness than having less money. But it’s not so simple. Many researchers find that after a certain point, the additional happiness you get from a higher income starts to decline after you make about $50,000 in the US, which is a good middle-class income in most place. In the second half of the program, we’ll talk about what it means to be “better off.” And the quote of the week is from the author J.R.R. Tolkien.
Quick reminder about the emails that JR sends out. Every Monday and Thursday morning, JR sends an e-mail to our growing list of subscribers. And the email includes a summary of the episode and some extra study resources. They are, number one, a description of one other word or phrase from the episode that we do not talk about. And number two, the English articles I use the prepare the show. Believe it or not, I don’t have all this knowledge in my head, about intentionality and the Eyelash Viper and 5G networks and “The Girl from Ipanema,” holograms, Mt. Everest, Huawei. Believe it or not, I have to research these topics. And when I’m done writing the episode, I look back at the links I used to prepare the show, and I share those links with our email subscribers. If you’d like to be among those subscribers, then please visit PlainEnglish.com/mail and enter your details.
Does more money equal more happiness?
On Thursday, we talked about whether it was possible to measure happiness, and what the main causes of happiness were. Interestingly, only about ten percent of our happiness is derived from our circumstances, like our social status, health, age, and, yes, income. I wanted to dig a little deeper in that last factor—your income or your wealth. Just so we are clear on the terminology: income is how much money you make in a month or a year; wealth is how much money or how many assets you have accumulated.
There are two places I want to go with this. First, for a single individual, how do changes in income or wealth affect your happiness? Do we really get happier as we get more money? The second thing I want to explore is whether societies are getting happier over long periods of time. We are undoubtedly far wealthier as a society now than fifty years ago: we’re healthier, we live longer; we have better educations, better access to technology, better ways to communicate; we’re more comfortable and more welcoming as a society, almost everywhere in the world—but are people happier today than they were, say 50 years ago, when we undoubtedly had less material wealth?
Let’s start with the first one. I’m just going to state the obvious: life is better if you have a good income than if you don’t. We’ll get that out of the way. But if you make a million dollars in a year, are you twice as happy as if you make half a million dollars? Is there a point at which making more money doesn’t make you much happier at all?
Surprisingly, studies show that in the United States, increasing your income makes a big difference to your happiness up to about $50,000 or $75,000 per year. What I mean by that is, if you make less than $50,000, then getting a raise makes a big difference in your happiness. But if you make more than that, a raise is definitely nice. But it doesn’t affect your overall happiness as much as it does for people who are making less. There have been a lot of studies in the United States that focus on the middle class, and they all tend to find the same thing.
What about the people at the very top—people worth multiple millions of dollars? Are they happier, less happy, or about the same as the rest of us? In one study, Harvard researchers asked 4,000 people with a net worth of $1 million or more to rate their happiness on a scale of 1 to 10. They compared the results of people with $1 to $2 million with those over $10 million in the bank. They found that people who have a net worth of $10 million or more are 0.25 points happier than the ones with “only” one to two million dollars! Five to ten times more money is equivalent to only two and a half percent more happiness. I think I’d be happy with one to two!
Here are a couple other nuggets from the survey. For the very rich, how you make your money matters to your happiness. If you earned the money yourself, you’re much happier, on average, than those who inherited their money.
One way the super-rich can increase their happiness is by giving away their money to a good cause. Bill Gates and Warren Buffet created “The Giving Pledge” in which the super-rich promise to give away most of their wealth to charity.
Now let’s turn to the other question I posed at the beginning of the episode. In almost any country today—and I do recognize there are exceptions, but in almost any country today, we are materially much, much better off than we were 50 years ago. A middle class family in many parts of the world today has a house with modern appliances, such as refrigerators, air conditioning, a flat screen TV, and laundry; they have access to better health care; they and their children are far better-educated; they live longer; they travel to much more interesting places; and their work is, generally, less dangerous and less physically demanding. In other words, the average family today would be living like kings if we transported their life back in time 50 years. So is the average family today much happier than it was 50 years ago?
Over a long period of time, people in wealthier countries don’t get happier as a group. What I mean by that is this: Japan has measured happiness since the 1950s; although Japan has experienced a significant increase in material wealth in the last 70 years, the proportion of people who say they are happy has stayed the same. America has been measuring happiness among its citizens since the 1800s. And guess what? We have gotten a lot wealthier, materially, since the 1800s, but the proportion of Americans who say they are happy has not changed. And in that time, the US went from being a minor figure on a world stage to a superpower.
Why is that? There are two potential reasons. One is that people get accustomed to what they have very quickly. That makes intuitive sense, and we all experience it. If you want something new—a new car, a new television, a new house, a new watch, whatever—you imagine its greatness before you have it. But as soon as you get it, then that becomes your new baseline. You don’t feel a lot happier because you have it; it’s the new normal. Now you can crave something else. When you turn on your air conditioner, you don’t think to yourself, “Wow, I’m so grateful to have this marvel of technology in my house! Imagine if I had lived just a century ago, I wouldn’t have it.” We don’t say that: we just turn the AC on and stand in front of the fan if it’s really hot, waiting for it to take effect. If I told you fifteen years ago you could have a supercomputer in your pocket with unlimited entertainment or productivity, you would have thought that all your problems would be solved. But here we are, and instead of marveling at it, we complain if the resolution on our streaming videos is too low.
Why else do societies get richer, but not happier? The other reason would be that people measure their own happiness relative to what they see other people doing. There will always be people who have more, and people who have less. A large part of the self-reported happiness is whether you’re closer to the top or closer to the bottom among the people around you. Doing well is not enough: you want to do better than your peers. Having air conditioning, to use that example, used to put you toward the top of most families in the United States. Now, almost every household in warm climates has AC, and the new status symbol has changed to solar panels or tankless water heaters or something like that.
I hope you’ve enjoyed these two episodes on measuring happiness. It’s rare that I do two episodes on the same topic, but I just got on such a roll that I had to break it up into two.
Time to say hello to a few listeners. Gabriel from Rio de Janeiro left me a voice message on WhatsApp. Gabriel is just starting with English and he was extremely brave to leave me a message over a minute long. Believe me, I know how hard that is when you’re just starting, before you have a lot of practice. And you see that blinking light on WhatsApp and it just makes you more nervous, so congratulations and thank you to Gabriel for casting aside his fears and leaving me a really nice message.
I also want to say hi to Nico from Germany. He’s an electrician; he’s doing night school; and he’s also studying with us at Plain English. Nico is a hard worker! As so many of you are. I am always so impressed by how hard so many of you work, and you still find time to study English. Nico lives in Aachen, Germany.
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