More Money = Happiness?

The Sandra Bullock Trade
By DAVID BROOKS
Published: March 29, 2010

Two things happened to Sandra Bullock this month. First, she won an Academy Award for best actress. Then came the news reports claiming that her husband is an adulterous jerk. So the philosophic question of the day is: Would you take that as a deal? Would you exchange a tremendous professional triumph for a severe personal blow?

On the one hand, an Academy Award is nothing to sneeze at. Bullock has earned the admiration of her peers in a way very few experience. She’ll make more money for years to come. She may even live longer. Research by Donald A. Redelmeier and Sheldon M. Singh has found that, on average, Oscar winners live nearly four years longer than nominees that don’t win.

Nonetheless, if you had to take more than three seconds to think about this question, you are absolutely crazy. Marital happiness is far more important than anything else in determining personal well-being. If you have a successful marriage, it doesn’t matter how many professional setbacks you endure, you will be reasonably happy. If you have an unsuccessful marriage, it doesn’t matter how many career triumphs you record, you will remain significantly unfulfilled.

This isn’t just sermonizing. This is the age of research, so there’s data to back this up. Over the past few decades, teams of researchers have been studying happiness. Their work, which seemed flimsy at first, has developed an impressive rigor, and one of the key findings is that, just as the old sages predicted, worldly success has shallow roots while interpersonal bonds permeate through and through.

For example, the relationship between happiness and income is complicated, and after a point, tenuous. It is true that poor nations become happier as they become middle-class nations. But once the basic necessities have been achieved, future income is lightly connected to well-being.

Growing countries are slightly less happy than countries with slower growth rates, according to Carol Graham of the Brookings Institution and Eduardo Lora. The United States is much richer than it was 50 years ago, but this has produced no measurable increase in overall happiness. On the other hand, it has become a much more unequal country, but this inequality doesn’t seem to have reduced national happiness.

On a personal scale, winning the lottery doesn’t seem to produce lasting gains in well-being. People aren’t happiest during the years when they are winning the most promotions. Instead, people are happy in their 20’s, dip in middle age and then, on average, hit peak happiness just after retirement at age 65.

People get slightly happier as they climb the income scale, but this depends on how they experience growth. Does wealth inflame unrealistic expectations? Does it destabilize settled relationships? Or does it flow from a virtuous cycle in which an interesting job produces hard work that in turn leads to more interesting opportunities?

If the relationship between money and well-being is complicated, the correspondence between personal relationships and happiness is not. The daily activities most associated with happiness are sex, socializing after work and having dinner with others. The daily activity most injurious to happiness is commuting. According to one study, joining a group that meets even just once a month produces the same happiness gain as doubling your income. According to another, being married produces a psychic gain equivalent to more than $100,000 a year.

If you want to find a good place to live, just ask people if they trust their neighbors. Levels of social trust vary enormously, but countries with high social trust have happier people, better health, more efficient government, more economic growth, and less fear of crime (regardless of whether actual crime rates are increasing or decreasing).

The overall impression from this research is that economic and professional success exists on the surface of life, and that they emerge out of interpersonal relationships, which are much deeper and more important.

The second impression is that most of us pay attention to the wrong things. Most people vastly overestimate the extent to which more money would improve our lives. Most schools and colleges spend too much time preparing students for careers and not enough preparing them to make social decisions. Most governments release a ton of data on economic trends but not enough on trust and other social conditions. In short, modern societies have developed vast institutions oriented around the things that are easy to count, not around the things that matter most. They have an affinity for material concerns and a primordial fear of moral and social ones.

This may be changing. There is a rash of compelling books — including “The Hidden Wealth of Nations” by David Halpern and “The Politics of Happiness” by Derek Bok — that argue that public institutions should pay attention to well-being and not just material growth narrowly conceived.

Governments keep initiating policies they think will produce prosperity, only to get sacked, time and again, from their spiritual blind side. 
 

David Brooks

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Does having more money make you happy? I know I am happier. But that is because I see myself as more successful when I have more money. That sounds materialistic but when I have more money it means I am hitting my goals. And that makes me feel good. Do I consider myself better than someone with less money? No. It’s just a personal thing. As a trader if you are not making money you are not going a good job. And I like to see my account balances get higher every month.

Trading becomes like a game. The Account Balance is the score and the market is your playground. When you know the rules and how to play you can make your score go up almost at will. It’s an amazing feeling.

What do you think?

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