Does money buy happiness?
“I don’t care too much for money, money can’t buy me love.” That’s what the old Beatles song claimed anyway and many of us would agree. But if money can’t buy you love, can it at least buy you happiness?
Not likely, according to social scientist Arthur Brooks. I discovered Dr. Brooks at a luncheon several years back honoring the late Charles Murphy, founder of Murphy Oil. I was mildly dreading the talk since I had already eaten my dessert and had nothing left to focus on but a glass of water. But then the next 30 minutes flew by as Dr. Brooks discussed the fascinating subject of what makes people happy.
Happiness seems like an elusive concept. You know when you are happy and when you are not. But it might be hard to describe what happiness is, much less measure it.
But social scientists have figured out ways to measure happiness. For starters, Americans are generally a happy group overall. In multiple studies on the subject, roughly half of Americans report being happy and more than a third report being very happy. About 15 percent of us are chronically unhappy.
Think of your own measure of happiness as something that fits in a bucket. About half of your happiness, roughly 48 percent, is determined genetically. If your parents were happy, you are inclined to be happy. You know that obnoxious co-worker who is always bubbly? Well, it may be their DNA.
A second major factor that makes us happy is life events. That accounts for another 40 percent of the volume in the happy bucket. We tend to be goal oriented in life, setting certain goals to make us happy.
If I can just get that degree, I’ll be happy. Or that job, or that house, or that person to marry me, and so on. Such life events do make us happy.
But here’s the kicker: they only create short-term happiness. By short term, Brooks means six months. After six months, the new wears off and you return to your previous level of happy. There’s nothing wrong with being goal oriented, but don’t expect big events to create lasting happiness.
Brooks cites the example of two groups of people that experienced major life altering events, quadriplegics and lottery winners. Both groups encountered abrupt changes in their lives. One study measured their happiness levels six months after the event. The quadriplegics had learned to deal with their situation and had recovered emotionally to the point where they were at the same level of happiness as before. Lottery winners, on the other hand, were still below their previous level of happiness. The sudden influx of funds had created more problems than comforts for the lottery winners.
That leaves only 12 percent in the happy bucket. What is it made up of? Brooks says the remaining fragment has four components: Faith, family, community and work. People of faith and people with strong family relationships are more likely to have higher overall happiness levels. By community, Brooks means having a network of friends and being involved helping those around you in your community.
Regarding work, Brooks asked the audience to guess what percent of Americans like their job. My own guess was 30 percent. Surprisingly, Brooks said 89 percent of Americans say they are either satisfied or very satisfied with their job. I can think of a lot of jobs that I would not want to do. But just because I don’t want to do it, someone else may take a lot of satisfaction in that work.
So, what makes people happy in their jobs? It not the money but rather something Brooks calls “earned success.” Having a job where you are making a contribution and creating value brings a high level of contentment. This is true regardless of the level of education of the level of income of a person.
If you measure two people with the same age, gender, religion and race, but one makes three times more money, they are likely to report having the same level of happiness.
So, when it comes to being happy, remember a chunk of it comes from your DNA and you have no control over it. Another chunk is major life events. Such events can bring happiness but only on a temporary basis. Lasting happiness is related to the factors of faith, family, community and work.
Fortunately, these are all factors that we have some degree of control over. Yes, we do still have to have money. But don’t expect it to buy you love or happiness!
Dr. David Ashby is a Certified Financial Planner and the retired Peoples Bank Professor of Finance at Southern Arkansas University. He holds degrees in accounting and business administration and a doctorate in finance from Louisiana Tech.