Post No.: 0394
Once we have enough money to afford the basics, for safety and reasonable security – how we can raise our levels of happiness any further will primarily depend on factors other than our income.
Once we have enough to meet our true necessities, to feel safe most of the time and to have a bit of free time – which can be spent on family, friends and positive experiences – everybody who is at this level of income should technically call themselves financially rich really. It’s better than what most people in history had, and more than what lots of people at present around the world have. Some still don’t even have safe running water on tap. This isn’t to say that we cannot have greater ambitions beyond being comfortable enough but if we wish to improve our happiness levels further, the focus shouldn’t be on obtaining more money but on something else; where if it comes with a greater income, it’d be just coincidental.
Yet despite a levelling off of happiness the more money we get after a certain amount, many people still desire ever more and more money. The rate of increment of happiness decreases and tends towards an asymptote the more money one obtains beyond a certain amount (the law of diminishing returns) but it is perceived that there’ll be a perpetual linear increase. In other words, although multiple sources of research show that, regarding levels of income at least, levels of happiness has an upper limit (this amount varies depending on the present living costs of where one lives but it was ~$75,000 per year for people living in the US in 2008-2009, which certainly isn’t in the millions) – most people still believe that their levels of happiness will continue to linearly or meaningfully grow with ever higher levels of income.
And if they do already have a high income and don’t feel completely happy, they see those with mansions, super yachts, private jets and islands and think that these people must be happier than them and so think that they simply haven’t got enough yet. Which is analogous to digging the ground for treasure, and if no treasure is found, it must be because they simply haven’t dug down deep enough yet, and so forth indefinitely. Such beliefs are stubborn because no matter how much evidence research can present to them, they’ll always believe they simply haven’t acquired enough money to be about as happy as they could ever be when it comes to money yet – not realising that it’s precisely this excessive psychological insecurity and insatiable desire that’s the real thing that’s causing them to be perpetually discontent and unhappy. It’s like body dysmorphic disorder, but with one’s income.
There’s a misperception that richer people than us are always happier than us, and when shown numerous counterexamples (e.g. they live stressful lives or have unhappy marriages for neglecting the other parts of their life as they focus on their money and status, they suffer from losses and pains in the same way as anyone else, or they complain about the world like anyone else), it’s sometimes rationalised that it’s something peculiar about those particular individuals that one will definitely be immune to if only one was as financially rich as them. But if you use this rationalisation then those with even less than you could judge you as peculiar for not being happy with what you’ve got(!)
There are miserable rich people who don’t realise how rich they are because they compare themselves to billionaires – in the UK, people who earned over ~£80,000 per year in 2019 were in the top 5% of earners, but some who did were out of touch and thought they earned less than 50% of all workers in the UK (the median was ~£25,000-30,000)! And that’s top 5% in the UK too, which is an economically developed country; even after accounting for local living costs.
We’ve got to understand that many people nowadays live easier and better lives than even the Emperors of Rome! For instance, we have readily available food from a variety of eateries nearby (or even ordering online), central heating/air conditioning and better functional clothing, security against invasion in most countries, law enforcement to keep us safe at home, better transport technologies, advanced medical science, more preventions and cures for diseases and injuries, better nutritional knowledge, sanitation, advancements in happiness science, and so on. And don’t forget the Internet and Wi-Fi!
Yet many people with all these things and more today seem just as grumpy or even grumpier it seems(!) Well I suppose that’s hard to verify without a time machine. Average happiness levels around the world have probably grown since back then but mainly due to lifting more people out of poverty rather than lifting more people from the ‘lower-middle classes’ to the ‘upper-middle classes’.
It’s not that fundamental desires have changed (they still had the same physical needs back then of food, water, safety, health and warmth) but too many people are still too psychologically insecure today – forgetting how much they do have and focusing on what they don’t. This is despite more psychological needs being met today (e.g. to stimulate us, alleviate boredom, to socially connect with others, more leisure time and opportunities).
The idea of ‘luxury’ may have changed, but we really need to recalibrate what’s truly a ‘need’ and what’s merely a ‘want’, especially since we also need to care about the environment and the planet’s limited resources. Lots of people today have lots of ‘stuff’ – yet they’re less happy than some of those who have relatively less stuff, which logically suggests that these things aren’t absolutely vital for achieving maximum happiness. Other factors become the limiting factors once we have a good enough level of income.
Imagine yourself as any person a century or more ago – if you were told about the stuff you have today and you could have it, you’d probably think you’d be happy with this modern stuff and you’d not be greedy and wouldn’t want for more. But you do have that stuff today, yet you probably still want more. So learn that the escalation of desire never stops despite happiness levels plateauing at a certain point when it comes to income – where if one is still unhappy then it won’t be down to the materials owned but other factors like one’s social life, purpose and health, which become the limiting factors that one should really be attending to instead of seeking even more stuff.
Aren’t people like the Maasai people generally happy and healthy people? They have far less materially than the average ‘Westerner’ but are they proportionally less happy and healthy as a result? Are they even less happy and healthy at all?
Many people think ‘I just want a bit more money and then I’ll be completely happy’, but the typical pattern is that the hedonic treadmill just escalates again. Or the target was never realistic in the first place based on the probabilities.
One could argue that although the increments tend towards zero, there are still increments in happiness the more income one has – even if it’s, say, an increase in happiness of 0.01% from earning, say, an extra $200,000 per year if we extrapolate the data – thus there’s still technically an increase. But in practice and reality, chasing after ever more money involves opportunity costs i.e. chasing that extra 0.01% of happiness via more income will likely mean giving up some time that could be spent with family and friends instead – and one thing money cannot buy is more time per day! So if one is spending more time at work, one cannot be spending that same time elsewhere or really ever recover this time by turning back the clocks to see their children grow up again. This could mean giving up maybe 50% of the happiness in one’s life overall just to gain that 0.01% – resulting in a net loss when we look at the broader frame! It’s irrational.
Okay, relatively few people earn even close to $75,000 (plus inflation) per year! But the main point is that if one, say, sacrifices one’s health to even try to double one’s income from having enough then it won’t be worth it. If you technically have enough money to live on but you want more then make sure nothing else that’s important for one’s happiness gets sacrificed in the process. And if you technically have enough money to live on but your relationships, purpose and health aren’t great then work on these first. Even at work, it’s not just our salary that’s important – see Post No.: 0164.
Regardless of whether one has a high or low income, finding it hard to make ends meet is one of the biggest predictors of unhappiness. It’s like in business – it’s cash flow problems that stress and take businesses down rather than what assets or liabilities are on the balance sheets. So we all indeed need some money or a way to pay the bills and survive, but happiness doesn’t increase simply by having more of it – it comes from living within our means. Woof!
If we take a step back and be honest to ourselves, we can see that happiness doesn’t infinitely grow and it has limits, both personally (set point theory) and when we look at population data as a whole. More people than ever have so many goods/services available yet aren’t collectively feeling any happier (including after correcting for wars, natural disasters, famines, etc. – fewer countries have wars and famines nowadays so that’s good). Do you feel happier today than you were 10 years ago when you probably had a dumber phone and a smaller TV? Chances are, if you are happier or unhappier today then it’s got nothing to do with the materials you have/don’t have but other factors like family, friends or your health (or this current pandemic! But this should hopefully only be temporary).
So our genuine needs haven’t changed but we’re just too insecure for making social comparisons. We forget that luxuries are luxuries. Treats should be treats. Wants are confused with needs. Proportionally fewer people than ever struggle to survive nowadays, in the ‘developed world’ at least, but psychological (rather than physical) insecurities related to wanting the latest things all of the time, endless desires and the mental stresses these bring have increased, in large part due to 24/7 commercials – advertising seeping through every corner of our lives makes us stress about what we don’t have but could have, which decreases happiness. And maybe things are too comfortable nowadays that it breeds weakness and a lack of proper perspective?
Plus if you measure your worth in monetary terms then a person earning twice as much as you shall be considered twice the person you are, and so there’s this constant feeling of insecurity if one does this unless one is the absolute richest person in the world. It’d also be an arrogant attitude when viewing people who earn less than oneself. Before economic markets existed, was all of nature worthless?! Nature was and is really worth more than any amount of money. People also have social value, the value of kindness, intellect, humour and more. The markets only measure so much and not even the half of the worth of anything alive – so don’t reduce yourself to how much you earn.
Woof. I don’t have much but have enough. It’s a matter of perspective and I live within my means. It’s those who are truly in poverty in the world, who cannot afford the basics, who are the unlucky ones. And, chances are, if you’re reading this blog on your own device then you’re one of the lucky ones. Compare to those who have less rather than those who have more, and be mindful of what you have rather than what you don’t.