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Ways Money Can Buy Happiness: An Examination of Wealth

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Has anyone told you that money can’t buy you happiness?

No-one knows the origin of this saying, but yet billions of people take it as sound advice. The fact is that money can indeed buy you happiness. Sure, millionaires and billionaires have a set of problems to handle as well, and there’s some truth to the saying “mo’ money, mo’ problems.”

However, learning to earn and appreciate money is an essential part of living in our society, regardless of your race or where you live in the world. Without money, you’re destined to a life of poverty, and no-one wants that to happen to them or their family.

Financial Stress in America

America is the most prosperous nation in the developed world. However, over recent years, the economic landscape of the economy is changing rapidly. The wealth gap in America continues to widen, and more people find themselves struggling to get by each month.

Recent statistics show that more than 70-percent of millennials are currently living from paycheck to paycheck. Data from the Federal Reserve also shows that despite government incentives, like the Roth IRA, the savings rate is at an all-time low.

Financial stress is now a serious concern for most Americans, with the middle-class lifestyle dissolving before the eyes of the country. Ask any American what their most significant source of stress is in their life, and you’ll likely receive the answer as “money.”

Most Americans are up to their necks in debt, and they have to contend with student loans, consumer loans, auto loans, and servicing various other forms of credit. With this lifestyle of easy credit, it’s hard to get ahead when you’re paying an interest APR of 24-percent.

Rates of homelessness continue to skyrocket across the United States, with the warmer Western half of the country attracting the formation of “tent cities” in states like California. People state their financial positions as the reason for addiction to drugs and alcohol. Being behind on your bills can lead to the development of depression, as well.

When you combine the effects of depression toward your financial position, along with drugs and alcohol, it has disastrous results. While people may have told you that money can’t buy you happiness, a lack of money can sure buy you plenty of misery in your life.

What Is Happiness for You?

Have you ever asked yourself this question? Defining happiness is an individual task. What makes you happy may not make your friend or the person walking across the street from you happy. Every person has an idea of what makes them happy, and most of the time, it has nothing to do with money.

As human beings, we value experiences more than we do sums in our bank account. However, you need money to have these experiences.

For example, let’s say you’re a young woman in her mid-twenties, and you and your long-time boyfriend fall pregnant. For most people, their children are the most important thing in their lives. If you have plenty of money in a fat bank account, you can afford to give your child the best of everything.

They’ll have the best education, the best food, the best clothing, and the best opportunities in life. As a result, there’s a good chance that they turn out to be a well-adjusted and productive member of society in the future.

On the other hand, we could reverse the financial position and say that the young pregnant woman did not know the identity of the father of her child. She works a minimum wage job that barely covers the bills. She relies on government-assisted healthcare to birth, the child, and food stamps to put dinner on the table for the child.

The child attends a government school that’s full of violent gang members and ends up joining the gang themselves. They get caught selling drugs and spend their twenties in and out of jail. There’s not much opportunity in this scenario, and it’s a reality for hundreds of thousands of Americans.

From this example, we can clearly see the difference money makes in our lives, and this effect extends into every area of our being. Money defines our status in life, it controls the opportunity we receive, and it allows us to stop working and enjoy our senior years in retirement after raising a family.

Do You Enjoy Being Broke?

If you’re a millennial, then there’s a high chance you’re broke right now. You might have a job with a decent income, but your cost of living is more than what you earn, it doesn’t matter if your salary is $100,000 or $50,000.

When your cost of living exceeds your income, you need to go into debt to support your finances, leading to a vicious cycle of credit cards, personal loans, and other lines of credit that cost you interest to maintain the account.

Being broke isn’t a lot of fun. You stress about paying your bills, you worry about covering your family’s needs, and whether or not you’ll all have a roof over your head at the end of the month. Financial stress is a real thing, and it can lead to the development of mental disorders and mental illness.

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More than 130-million Americans suffer from some form of anxiety disorder. That’s almost half of the country that is living on the edge at any time. As a result, prescriptions for drugs like Xanax and Valium are at record highs across America. Most people with addiction problems state financial problems as one of the leading reasons as to why they got addicted in the first place.

On the flip side, Americans that have enough money to live without stressing about their finances live happier lives. In most cases, children have more opportunities, and there’s never any shortage of food or worrying if the sheriff is coming to foreclose on the house this weekend.

What Would You Do with $10-million?

Imagine you won the lottery. For real. What would you do with the money? If you had more money than you know what to do with, what would you do when you finish the longest shopping spree of your life? Sure, the thought of walking into any retail location and buying out the entire shop may be pleasing. However, there’s a point where that no longer matters.

Don’t believe it? Well, the top Hollywood stars all make use of professional shoppers to avoid going to the stores and wasting their time. That’s because people have money eventually realize that time is the most valuable asset they have.

So, what would you do if you had all the money in the world, and how much is enough?

The Distribution Curve and Diminishing Returns in Wealth

Research shows that there is actually a threshold to how much money can bring you happiness. Studies show that Americans earning between $75,000 and $90,000 a year, are in a stress-free financial environment.

However, the same study shows that Americans who earn over $75,000, do not experience any significant benefit in terms of happiness. In other words, it doesn’t matter if you earn $250,000, there is no discernible measure of you being happier than if you earn $90,000.

Diminishing Returns
Diminishing Returns of Wealth, Image from CNBC

Further surveys show that different generations have different ideas of what it means to be financially secure. In the study, when asked about the ideal figure to have tucked away for retirement, Boomers suggested an average of $2-million in cash. Millennials believe the ideal number to be $2,5-million.

This difference highlights the concept of buying power and inflation, and how each generation views the idea of being “rich” as a specific number attached to their net worth.

Money CAN Buy Happiness – Here’s How

The truth is that money can buy you happiness. However, the good news is that that happiness actually has a price tag – an annual income of $75,000, or $2.5-million in cash. If you can achieve this number, you can live stress-free about your financial situation.

What happens when you do achieve this level of financial success? You have more time on your hands, and you can work toward achieving what you want from life. For example, let’s take someone who has no savings and no income. The person gets a job at McDonald’s flipping burgers for minimum wage.

This person has no choice in their job, as they’re competing with thousands of other people for a position and a salary. The employer pays them enough to cover their living expenses if that. As a result, the employee has no other choice but to keep living a life of quiet desperation, from paycheck to paycheck.

As a result of walking the breadline, they don’t look to challenge authority, innovate, or follow their instincts – after all, it might cost them their job. With no job, there’s no income, and nothing but poverty awaits.

However, a person that has a successful career, earning money, and saving, then they have a financial cushion. It doesn’t matter if they lose their job for three or six months; they have the freedom to start a business using their collateral as seed funding. In short, they have more options, and if things go pear-shaped, then they have a financial cushion to fall back on in life.

This instance is another clear example of how money can buy you happiness Money gives you more control over outcomes in your life. When you control your environment, you can create. However, when your environment controls you, you have to react.

The point is that people with money and salaries above $75,000 have a better quality of life. They exist on a plane where money does not impact their decision-making process in their daily actions. As a result, they have more freedom and more time. When you have more freedom and time on your hands, then you can afford to take more risks.

Risks like starting a business chasing your passions is an excellent example of this freedom of having money. By starting a business, you love, you get to turn your vocation into a vacation. Whether that’s owning a shop on the beachfront, or closing mega-deals for a property portfolio, money gives you the power to decide the direction of your life.

Is There Anything Money Can’t Buy?

Of course. There are plenty of things money can’t buy, including happiness. Yes, we said it, money can’t really buy you happiness. For example, there are probably plenty of millionaires out there that might not have success with their family life or with other relationships because of various reasons.

Even though they are worth billions, their daughter might not want to talk to them. Maybe they have a fat bank account but feel lonely and empty inside. However, research shows that the $75,000 threshold does have an impact on the quality of life we experience.

By having more money at your disposal, you get the chance to seize the opportunity and get off the razor’s edge of living from month-to-month.

Wrapping Up – The Power of Goal-Setting

If you’re currently dealing with a financial situation that needs improving, then you need to set some goals for yourself. Setting goals gives you direction in life, and allows you to progress yourself further, and out of a sticky situation in life.

Even if you’re working minimum wage, and think there is no prospect in the future, you are wrong, and you can make it for you and your family. There are plenty of stories of people that achieve near-impossible feats to rise from the ashes of poverty to riches.

Start by thinking about your ideal life and make it attainable. You don’t need to think about owning that Lambo right now. Setting achievable goals makes it more convincing for your mind to accept, and more likely that you’ll attain it. When goal-setting, it’s better to work off small wins than it is to swing for the fences.

Then back-engineer that lifestyle, and identify what you would have to do to achieve that level of financial success. The answer is different for everyone, but it’s still an attainable one if you decide to pursue it.

Create a plan to boost your finances, and then work the plan. Eventually, with enough persistence, you could attain the lifestyle you deserve and desire.

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Oliver Dale is Editor-in-Chief of MoneyCheck and founder of Kooc Media Ltd, A UK-Based Online Publishing company. A Technology Entrepreneur with over 15 years of professional experience in Investing and UK Business.His writing has been quoted by Nasdaq, Dow Jones, Investopedia, The New Yorker, Forbes, Techcrunch & More.He built Money Check to bring the highest level of education about personal finance to the general public with clear and unbiased reporting.oliver@moneycheck.com


Editorial Disclaimer: Opinions expressed here are the author’s alone, not those of any bank or credit card issuer and have not been reviewed, approved or otherwise endorsed by any of these entities.


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