Key takeaways
- Some people continually raise the bar on themselves when it comes to the amount of income they need in order to be happy.
- A recent study found that most people are happy at annual income levels of $80,000 to $100,000.
- For people making incomes above that level, yet who still aren’t happy, there may be an underlying cause that really has nothing to do with money, but a certain mindset about money, instead.
- Becoming aware that you’re unhappy, even though you’re making more than the $100,000 the study reports, is the first step to changing that mindset.
- Life is too short to be unhappy around money.
As I look back on my career, it occurs to me that I’ve talked to a lot of people who are saving money for future retirement. Early on in this process they’ll say to me, “You know, 2 million dollars would make me happy.” Then, when I talk to the same person 10 to 15 years later, they say, “Actually, it’s 5 million dollars that would make me happy.” Ten years after that this same person tells me, “I really need 10 million dollars.” After seeing this same scenario play out with numerous people, it made me pause and ask myself, “What’s really going on there?”
It’s interesting that you can approach money in several different ways. One way is to take the scarcity viewpoint where your mindset is “more is better, more is better” until you just can’t do it anymore, just can’t work any more than you already do. Where do people hit the happiness level, outside of just wanting more and more?
In 2018, TD Ameritrade conducted a millennial work study, which found that the happiness point around money is an annual income of $80,000 for singles and $100,000 for couples. There’s obviously truth to these findings because that’s not enough, necessarily, for the long term, but it’s the point at which most people feel happy. Conversely, if you’re focused on the “more is better” viewpoint, you’ll never be happy.
Sometimes, when I see these studies, I think the gap between those who are happy at a certain level of income and those who aren’t happy at that same level comes down to a mindset difference. The gap can probably be closed by a shift in this mindset. The first step is becoming aware that you’re not happy. Maybe you’re making $200,000 a year, but you’re still not happy.
Why is that? It doesn’t make sense because the majority of people are saying that $80 to $100 thousand dollars a year is the level where they’re happy. So it might be that you have to shift your mindset relative to how you define happiness because just constantly chasing the dollar is not going to provide any level of true happiness. Why? Because there’s always more money to chase and it never ends.
Research shows that only 5 percent of the population (at least in the United States) actually keeps wanting to accumulate more money simply for money’s sake. If you’re not in the 95 percent majority, and you’re making more than the amount in the study and still not happy, maybe there’s something else going on at a deeper level that’s affecting your happiness when it comes to money. Maybe it’s just your perception of the purpose of money and what it’s really being used for. It could take some time and effort to change your mindset around that, but it’ll be worth it. Why is it worth it? It’s better to be happy for a long period of time than to feel constantly unhappy with the amount of money you’re currently making, spending, saving.
Life is too short to be unhappy around money. I like this study because it supplies us with a touchstone as to the level at which most people are happy with the money they make. Consider this and take a quick look at yourself to see if that’s where you are or not. Until next time, enjoy.
Gary
