[Level 2: Comfort]
Many of the survival components of the MPI Life Wall can be obtained with money and, if you live in the developed world, it can be very difficult to obtain them without money. Additionally, there are other things that money can buy that go beyond survival. Some of these are things that can help you become more productive, improve your health, and contribute to an overall feeling of happiness in your personal living environment. Of course, there are also other things that you can buy that have very little to do with your overall happiness. So the question is: how much income do you need?
There have been several polls conducted with the objective of answering this question. A recent poll conducted by ORC international indicated that for 50 percent of the participants, the answer is less than $100,000 in the Unit- ed States. Almost a quarter of the people that participated in the survey indicated that an income between $50,000 and $75,000 would be sufficient.4 This, in turn, happens to be consistent with another study conducted by Princeton University that found that “emotional well-being” rose with income up to this amount, but not much beyond $75,000.
The conclusion to draw from these polls is that there are certain things that you must have that will significantly affect your happiness, but after you get them, using additional income to acquire additional stuff has a diminishing impact on your happiness. It is interesting to note that some people genuinely don’t care about money. Approximately 10 percent of those polled said that they would be happy with a number between $1 and $30,000. Further, 6 percent wanted to make it clear that they didn’t feel that money could buy happiness, in any amount, period. At the other end of the scale, 23 percent said they needed between $100,000 and $200,000. The divergence in these numbers can likely be explained by the fact that it costs significantly more to live in places like New York and California, compared to many other states in the United States.
When the participants in the polls were asked how much income they considered would make them feel rich, the typical answer was somewhere between $100,000 and $200,000. In fact, 60 percent indicated that an income below $250,000 would be sufficient for them to consider themselves to be rich. Only 11 percent said they need- ed to make $1 million or more to consider themselves rich.
By examining Gallup Poll data from nearly 500,000 U.S. households, Princeton researchers Elizabeth Dunn and Michael Norton discovered that because family incomes were connected to stress levels, a more comfortable income had a generally positive impact on family members.5 However, they also found that the impact of money fell away after a level of $75,000 per year was achieved. Dunn and Norton explained that doubling income does not result in doubling happiness.
The research also found that people who earned $55,000 were only 9 percent more content than those making $25,000.
The more important finding from this research is that what we do with our money is more important than the money we earn. Thus, making more money in order to have bigger homes and better cars is ultimately ineffective at transforming money into happiness. In addition, the research suggests that if you do decide to spend money on yourself, you will generate a bigger “happiness return” if you spend it on experiences (travel and special events), as opposed to buying material objects.
A related concept Dunn and Norton studied was un- der-indulgence, which can result in greater happiness in the long run. They provide the example of indulging in chocolate sparingly instead of in excess because it results in a great- er appreciation of the taste and texture of the chocolate.
I have described what I believe to be more important concepts in the chapter called “Happiness” that directly address the issues raised in this section on income. The findings by the researchers that how you spend your money has a bigger impact on your happiness than how much you earn is consistent with the principle that earning a lot of money only makes you potentially successful. Of course, in this book, I am defining success as the extent to which you have a positive impact on yourself and on the planet, and that your overall happiness arises from this form of success.
The chocolate analogy is consistent with another principle mentioned in the chapter on happiness—the principle relating to the relative nature of happiness that describes how the novelty of success eventually fades, leaving us to do something new in order to get our next dose of happiness.