The relationship between money and happiness has been a hot topic for centuries
From Ancient Greeks, to modern philanthropists, and celebrities – we have all tried to answer the question: can humans succeed at making money and achieving happiness at the same time?
It is a question that’s close to my own heart.
I come from a very privileged background.
A successful family business.
An opportunity to manage the business after University.
A guaranteed comfortable lifestyle. You get the picture.
But I had one problem: I was ‘unhappy’.
After an almost fatal car accident at age 20, I believed that if I didn’t prioritise the pursuit of happiness above all else – all the money in the world wouldn’t matter one jot.
So, what happened next?
I left home to focus on the pursuit of ‘happiness’ first (and money as an important - but secondary concern).
At the time, I followed a hunch that it was the right thing to do in order to realise my dream of having both happiness and money - sooner or later.
That was over 30 years ago: years before professors, scientists and economists produced the latest data-backed research into just how money and happiness are related.
So, you’d have to wonder...
How would these new findings help an unhappy person today make an informed decision about whether to put the pursuit of money, or the pursuit of happiness first, in order to find both?
Surely, that’s easy to answer.
After all, we know that money doesn’t buy happiness.
Data-backed research proves otherwise.
The answer, as far as all the latest research shows, is ‘yes’.
According to the United Nations World Happiness Survey, published in 2015, throughout the world, income is the #1 predictor for happiness, and the more you make, the happier you become.
While no single study has yet settled the argument once and for all, most of the new research leads us to safely conclude found that richer people tend to be happier, and poorer people experience increased happiness as they move out of poverty.
The following section contains ideas from the book NeuroGymWisdom: The New Brain Science of Money, Happiness, and Success, by Mark Waldman and Chris Manning, PhD (out January 31, 2017):
The controversy began in 1974 when Richard Easterlin, a distinguished professor of economics at the University of Southern California, argued that there was little correlation between happiness and wealth.[iv]
Since then, a series of research studies have shown that Easterlin was wrong.
Not only do measurements of happiness rise as your income rises, so does your sense of wellbeing and life-satisfaction.[v] The following chart was prepared by National Opinion Research Center at the University of Chicago, summarizing nearly forty years of accumulated worldwide statistics between 1972 - 2010: [vi]
According to findings, money predicts happiness. Of course, it’s not a guarantee of happiness, but it’s a clear indicator of the chances of it showing up.
For those who earn less than $12,500, 26% are not very happy.
With incomes above $12,500 and up to $49,999, dissatisfaction is cut in half, down to 13%.
For those who earn between $50,000 and $150,000, unhappiness decreases to 6%, and for those who earn more than $150,000, only 2% say they are dissatisfied with their lives.
Research at the Wharton School of Business, published in 2012, found no evidence showing a satiation point: so the more money you make, the more happiness you’ll experience.[vii]
These researchers also noted that 100% of those who earned $500,000 or more a year were very happy.
In related research, Michael Finke at Texas Tech University found that retirees who had saved over $2 million dollars in non-housing wealth were some of the happiest people in the world.[viii]
According to Cornell University economics professor Robert Frank, increased yearly income is the most significant way to increase happiness.[ix]
Richard Layard, the founder of the Centre for Economic Performance in London, concurs: in nearly every country studied, “the rich are always happier than the poor.”[x] Material prosperity predicts life satisfaction,[xi] and the more economic status you achieve, the more you’ll feel satisfied with your life.[xii]
You might think it’s safe to assume that happier people earn more money.
According to the latest research, when the brain is ‘happy’ it turns off the motivation centres and goes to sleep, so we are unlikely to be driven to earn more money when we are in a state of ‘happiness’.
The solution? The good news for happy people is that if you combine your happiness with your long-term goals - you have greater chances of being both happy and rich.
Leading neuroscience researcher Mark Waldman says:
‘Having a long-term vision of a great goal and desire appears to bring the greatest sense of satisfaction, along with our willingness to pursue that ‘big dream’ or ‘goal’. This is what positive psychologists refer to as “grit.”
I am still keen to learn more about what the recent research has to say about the pursuit of happiness and the results it produces.
‘Being happy’ is a goal for many of us, so what does it actually get us if we pursue it?
I am taken aback when I read the following:
Neuroscience and insights into the workings of the brain show us that the pursuit of happiness alone can make us depressed.
Of course, it depends what we understand as ‘happiness’.
When I left home in pursuit of happiness, I was actually looking for a way to end the emotional pain I was in. Being pain-free was my idea of bliss.
At the time, it was more important than the pursuit of fame, or money – that’s true – but my personal ‘search for happiness’ was also firmly linked to very meaningful ambitions and professional goals, which I relentlessly strived toward.
Some of the goals I achieved en route included:
I am so happy when I realise that I had the common sense to tightly link my pursuit of happiness with goals that had deep personal, and professional meaning to me.
According to all the latest research, this ‘linking’ brings us closer to our dream of having both happiness and money in the long-term.
If you’d like to know about the different studies on Money and Happiness in more depth you’ll find a good article here.
So far, we might be inclined to hedge our bets in favor of focusing on increasing our income first - believing that happiness will follow.
It would appear that this isn’t the answer.
Evidence points to a strong correlation between happiness and money.
(It appears to be more of a ‘chicken and egg’ thing.)
Or a dance between two powerful, highly charged partners of equal importance:
The Money and Happiness Dance.
While income appears to be the most important indicator for happiness, it isn’t the only criteria.
According to the World Happiness Report, published by the United Nations in 2015, the six most powerful indicators for happiness (in descending order of importance) are:[xiii]
The World Happiness Report identified another essential quality of happiness: Wellbeing.
Wellbeing, is defined as a life that is filled with enjoyment and feelings of safety, coupled with the absence of anger, worry, sadness, depression, stress and pain.
As reported in a 2015 issue of the Lancet, having an ongoing sense of wellbeing lowers your risk of physical and emotional disease, tripling your survival rate and extending your life.[xiv]
The World Happiness Report also found that those who make more money are happier, and those who are happier live longer.
Clearly, the evidence points to a very close correlation between money and happiness.
I invite you - as an exercise - to go through the above checklist to see how you’re doing. Give yourself a score between 1 and 10 on each of the top Happiness indicators.
‘Absence of corruption in business and government’ might be hard for us to score - but for the others, this is an easy and powerful exercise to do.
Doing this exercise myself, I have just realised something important.
Having worked with NeuroGym’s programs over the past 10 months, I can say that the programs have supported me in focusing on each of the items (1 - 5) on that list to improve the quality of my life in more ways than just financially.
Wow! Money well-spent. Nice :)
It’s not surprising when I think about it, the exercises, or ‘Innercises®’ provided in NeuroGym’s programs have been tailored to help us eliminate any negative mental states towards money, towards ourselves, and towards life in general - as we progressively build greater confidence, serenity and focus. This combination enables us to move towards goals and desires as we prime the brain and mindset for happiness and success.
The research that has been done on this would suggest so.
While there have been many studies into how money impacts our happiness level, little has been done on whether happier people actually make more money in the first place.
One study by Jan-Emmanuel De Neve and Andrew J. Oswald followed over 10,000 US adolescents and young adults over a decade and found that happiness during teenage years and young adulthood was directly linked with income at age 29.
The researchers make it clear that their goal is to show that the relationship between income and happiness is dynamic.
While their findings complement existing research on the effect of income on well-being – which point to a strong correlation between income and happiness – they also add strong evidence to the argument that happier people do earn a higher income!!
Their results show that students describing themselves as happier at ages 16 and 18, felt happier with their lives at age 22 and earned more income at age 28.
The study also found that those reporting a “very happy” adolescence earned an income about 10% above the average, while those who experienced a “profoundly unhappy” adolescence made about 30% less than the average income.
In their analysis, the researchers actually suggest that happiness isn’t something that’s linked to higher income, but it is actually helping to generate it.
Researcher Andrew Oswald, a professor of economics at the University of Warwick in England, noted:
"Happiness is a good predictor of income, even after factors such as gender, IQ, physical health and height are taken into account”
“If you're happy, you have less worries and distractions and stress that probably divert you away from the things that are important for work and getting promotions," Oswald said. "People who worry less can concentrate on being better employees.”
We can conclude that being happy, or ‘happiness’, makes it easier to pursue monetary rewards.
Let’s check back in with our unhappy young person ...
What advice can we now offer to help her decide whether to pursue money or happiness first in order to achieve both?
Evidence would suggest that beginning with a foundation of "unhappiness" is a clear disadvantage.
However, the latest research shows a strong correlation between income and happiness. Setting out to achieve greater income and increased happiness at the same time appears to increase the chances of achieving both.
So, while our unhappy young person may be less successful at first if her only concern is the pursuit of happiness, all is not lost if she focuses on increasing her income and her happiness together.
So, what steps can we suggest to increase her chances of making more money and having more happiness at the same time?
Harvard psychologist Shawn Anchor, author of The Happiness Advantage is a world-leading expert on the connection between happiness and success.
Achor’s research discovered that teaching positive habits creates a buffer against negativity and stress. He presents evidence that ‘our brains work better when they are positive than they do at negative neutral or stressed.’
In a very entertaining presentation at the UP experience 2010, Professor Achor talks about his findings:
‘If I know all the things in your external world; if I know what cars you drive, what’s going on in the economy, the weather, I can only predict 10% of your long-term happiness.’
He argues that: ‘90% of your long-term happiness is not about the external world but about how your brain processes the external world, which is why at Harvard we can have students that thrive there and other students that see only the competition, the challenges, and turn what could be a heaven into a hell’.
His words stop me in my tracks.
These findings are well worth considering.
Achor’s research supports many NeuroGymscientific studies showing that our brains work significantly more successfully and more intelligently in a positive state.
Anchor goes on to say that if we could find a way to be happier in the present, then we will raise our success rates, because we are able to work harder, faster and more intelligently when we are in a positive frame of mind.
So, based on Achor’s research, it is clear that it makes sense to work on helping our brain to process the world from a positive perspective at the same time as we work on achieving our goals.
This combination will increase our chances of success, our levels of productivity and our earning potential for the long-term.
If ‘happiness’ is one of the best investments we can make in our immediate and long-term abilities to increase our wealth; where do we find it – without wasting another second on being miserable?
Welcome to the brave new world where scientific research, data, and technology meet the primitive brain.
Using the latest brain scanning technology, neuroscientists and psychologists are revealing previously unknown facts about the workings of the human brain and mind.
This is crazy but true:
Insights into the workings of our brain show that we tend to build more fearful memories than positive ones, and these habituated memories can interfere with our happiness and desire to pursue goals – especially when faced with new ideas even if we know they could be good for us.
Using the latest technology neuroscientists and psychologists are able to identify strategies that can change habitual behaviors encoded into our neural circuits that can help reduce feelings of unhappiness, stress, anxiety and replace them with positive, happier thoughts, behaviors and outcomes.
Yes. We can use our brains to make happiness.
Our brain has the power to be a misery factory or a happiness factory – it’s up to us to decide.
We simply need to learn how to use it consciously instead of letting it use us unconsciously.
So, now we know that our brains have the power to make us happier – what next?
A clear ‘formula’ is emerging from the combined disciplines of neuroscience, psychology, and behavioural economics to show that the way to happiness is centered on how our brain works.
We just have to exercise the fabulous organ between our ears!
This is where my own connection with NeuroGym comes in.
Within a matter of days of starting NeuroGym’s brain retraining ‘Winning the game of Money’ programme, I was experiencing more awareness about my current relationship with money.
By the end of the 3-month program, the changes in my thinking around money were having positive beneficial effects on my money management skills and my money-mindset. I also found that I was more positive in general when dealing with stressful issues, so my happiness levels also increased.
My life improved in many different ways.
Don’t just take my word for it.
In a terrific interview with John Assaraf during one of the NeuroGym’s live Brain-A-Thon sessions, Dr Srini Pillay, award-winning author and assistant clinical professor of psychiatry at Harvard, talks of the benefits of NeuroGym’s brain retraining technology.
What I love about the (NeuroGym) progamme is that it gives you this daily reminder that it is possible to change your financial life - and we’re seeing evidence of this today.
Dr. Pillay goes on to discuss Brain Plasticity – which is one of the brilliant skills our brains have to assist us with changing habits that don’t serve us, and replacing them with new ones that do:
‘For me one of the greatest miracles of this century is Brain Plasticity.
It’s really important to know that you can change your brain with even 15 minutes of brain training. If you do that for 5 days a week for 4 weeks, you can train your brain... so from my point of view, brain training is real. It is possible and with the right kind of guidance that is science-based, you can make the right kind of changes in your life.’
What? I hear you ask.
I was skeptical of course, but once you read up on the science and the psychology and realise just how much research there is around this stuff – it’s almost impossible to remain skeptical.
We now know that our brains are primed for skepticism about any new information we give it that challenges its world-view.
But at the same time, we know the brain is also highly flexible and responsive to change once we consciously decide to retrain it – with intention.
We simply have to feed it our new positive thoughts regularly, which work to correct any negative thought-patterns.
NeuroGym’s Innercises® are practical exercises that do just this.
Focused on helping us retrain our brains for positivity, Innercises® actually reduce the fear-centred triggers that fire off in our brain when we want to take new steps towards our financial goals.
At the same time – due to reducing our anxiety levels and fear-centred reactions – we are able to experience more happiness and positivity as we make changes
Does this even exist?
Incredible as it sounds – the answer is ‘yes’.
Combining the latest findings in neuroscience and cutting-edge technology, NeuroGym’s brain retraining results in beneficial outcomes as we start to experience new thoughts about money, and take different, more positive actions in our lives based on our new thinking.
We start to see the world though a happier perspective, while we reach our money goals at the same time.
Personally, I wish I’d found NeuroGym years ago.
While I do love this quote from Dr. Srini Pillay about NeuroGym’s products, it’s bitter-sweet.
You don’t have to go the long route take the hard way go for years and years of psychotherapy if there’s something that can change your mind state in such a short period of time.
My own healing work was very therapy based – and while it eventually worked – it took a long time. Also there was no emphasis on healing around money, so while I might have left the process happier – I was still largely unconscious about my negativity bias towards money.
Trying to earn money with an unconscious negativity bias towards it is like trying to fish with a stone.
I found within weeks of doing daily Innercises with NeuroGym’s Winning The Game of Money progam, I soon became conscious of any thoughts around money that weren’t serving my goal of making it. I was also able to replace them with positive thoughts that had immediate beneficial effects.
So I do know this stuff works.
I guess the proof is in the pudding.
From starting the Innercises – did my happiness levels increase? Yes!
Did my stress levels drop? Yes!
And did my income increase? Yes!
Research tells us that putting ourselves in a positive mindset, while we focus on our goals produces positive results.
But there’s a problem: this is easier said than done.
Humans easily fall into old habits. It’s how our brains are wired. We need help to keep us on track.
NeuroyGym’s Innercises can provide the focus we need.
Here Are Some Super Helpful Starting Points For Taking Control Of Your Financial Life:
In a recent interview with John Assaraf CEO of Neurogym, Dr Srini Pillay, (award-winning author and assistant clinical professor of psychiatry at Harvard) talks about being prepared for ‘cognitive dissonance’ where ‘your cognitive centre will say ‘no, no, no’ when we give it new instructions.’ Even ones that will improve our lives.
This heightening of the fear centre of the brain sabotages us without us even being aware it’s happening. It disables us from making a choice that would improve our lives for the better.
Sometimes our clever brain really is dumb – I guess it’s okay to accept this and get on with using the clever part to change it!
To help ‘trick’ the brain out of this habit – we need to feed it positive thoughts.
Dr Pillay suggests starting with a simple Innercise to help your mind and brain move towards your financial goals:
’When I improve my financial life, I will be able to _________
Repeat these positive thoughts daily.
Add them to your phone.
Pin them to your fridge.
By reading them you are immediately activating the powerful motivational and commitment centers of the brain.
Opportunities to earn more money are all around us. We just have to know where to look
Part One of NeuroGym’s Winning The Game of Money helps us to reach this mindset.
It’s so powerful, that you’re bound to feel the effects immediately. From then on, you'll start to notice opportunities everywhere, and you'll never feel worried about money again., because you know you can always find more.
Neurogym’s Winning The Game Of Money program is designed to help us to become aware of any non-conscious, self-sabotaging beliefs that may be lurking around holding us back from reaching our financial goals. The program helps us to become aware of our personal ‘money story’.
You can start now, by asking the following questions:
Okay, if you’ve not done it before, this might be a little unusual to think about, but this is a very powerful exercise.
According to Dr Pillay, by becoming aware of your very specific feelings around money – you will start to make room for new thoughts.
Start considering your ‘money story’ by reading these sentences out loud:
Make a note of your responses.
Did you find yourself resisting?
If so, it’s highly likely you have latent self-sabotaging beliefs around money – it’s normal.
The good news is you can change this by being aware of it first, then retraining your thinking to create empowering positive thoughts around money.
That’s exactly what NeuroGym’s Innercises help you to do.
‘Successful people earn more because they’re always improving themselves by learning more, building new skills, and remaining optimistic - no matter what.
Think about it. We are living in the midst of a highly competitive market and an ever-changing landscape – by investing in yourself you are up-skilling and keeping ahead of the curve.
So, keep on learning.
5. Raise your self-esteem.
Here’s a lovely insight from NeuroGym’s resident neuroscience researcher Mark Waldman:
When you focus on past memories of achievement, your self-esteem improves.
This exercise gently trains the mind to send us loving, positive thoughts about ourselves and to switch off the toxic thoughts that often rattle on in the background and damage our self-esteem, happiness, productivity and bank balances.
It’s simple and effective to do:
It’s like having a shot of happiness in your back pocket – and it works.
But what’s brilliant is that this habit actually helps us to form new neural pathways that will keep us in a happier frame of mind throughout the day - and in the long term.
Here is a highly effective Innercise from Neurogym’s CEO and Founder John Assaraf focused on boosting your self-esteem
It pays to exercise.
Clear evidence shows that people who exercise and keep fit earn more money.
In a 2012 study by the Journal of Labor Research, employees who exercise regularly were found to earn 9% more than those who don’t.
Another study found that on average women who were ‘obese’ earned on average 18% less that those who weren’t. And those classed as ‘overweight’ also had 25% less family income. For more insights on the impact of Exercise on Income check out this article.
For an even bigger benefit, take your workout outside!
7. Innercise For a Quick Happiness Fix
Yawning changes the brain patterns. It lets the brain ‘chill’ as it releases neurochemicals that help you concentrate on your goals and tasks.
With FMRi brain scans we can see the moment-to-moment activity in the brain during yawing which clearly shows how yawning and slow focused stretching reduces stress.
With this shot of clarity, our productivity increases and we can solve problems with greater ease
Mark Waldman explains that ‘yawning shifts the brain out of stress and worry and into feeling more calm and focused. From here we stand a much better chance of making decisions that are good for us’.
Are you ready for something challenging?
It’s time to ask the one question we are probably terrified to know the answer to:
As an endnote to this fascinating topic of the relationship between money and happiness, ask yourself this question:
What should you do with your money when you arrive at being both happy and rich at the same time?
You should use it to help others to become happier and more successful!
What an irony: after working so hard to become rich and happy – it would appear that to remain rich and happy we should give our money away.
Growing evidence suggests that charitable giving makes us happier.
A recent study examined extensive data from over 166 countries and discovered that in almost all countries, households that gave to charity were happier.
Other research found that spending money on others enhances our own happiness and can even make us healthier.
And what of the practice among some of the richest people in the world of donating large amounts of their income to help others? In some cases all?
Madness? I hear you ask?
Not according to the philanthropic work of Warren Buffet and Bill Gates and their famous ‘Giving Pledge’.
Recently, one millionaire hit the headlines by publicly announcing that he is giving up his $4.5 million fortune to microfinance charities in Latin America in the hopes of finding happiness in a wooden hut.
While this might seem extreme, he is in good company in his plan to give away millions of dollars of his wealth to help others.
In our drive to live the dream life of having wealth and happiness at the same time - we might learn a lot from The Giving Pledge contributors, and others such as Ophrah Winfrey, Mark Zuckerberg,and John Assaraf who practice donating percentages of their wealth to good causes.
I am personally inspired by this as an end-goal to achieving my financial dreams.
It makes sense.
Giving is a good thing.
Good things make us feel happier.
Happier people get richer.
Richer people get happier.
Happier, richer people give more to help others – and so making other happier, richer people in the world...
What’s not to love?
We’ve often heard it said, ‘money doesn’t buy happiness’.
We now have ample evidence to prove we’ve been wrong about that.
New research clearly points to the fact that:
Not only do our measurements of happiness rise as our income rises, so does our sense of wellbeing and life-satisfaction.
However, a body of evidence also clearly shows a strong correlation between money and happiness.
So, by choosing to focus on money goals that motivate you, while also embedding a positive mindset towards money, towards yourself, and life in general, you will help to achieve both increased wealth and happiness.
And when you get there - evidence clearly shows us that being generous with our money makes us happier – and richer!
So, what about our young woman, who is about to make a decision to leave her hometown in pursuit of happiness over money?
What would this informed older woman say to her, as she sets off to achieve her life’s dreams?
I would take her aside and gently advise her:
Without a doubt, I’d also say to her:
Sign up for the Live Brain-a-Thon!
It will help you to change your negative thought patterns around money, which will hamper your progress – while helping you to achieve your goals in the process.
Remember – and this is so important for all of us: it’s never ever too late.
We are all on a journey of realising our financial goals, and of finding happiness. And whether or not it is clear to us, we have been working towards achieving both in the best way we know how - throughout our lives.
However, sometimes we have been working toward our goals in the dark.
Without challenging our old habits, fears and thought patterns we can be blindly driven to make unnecessary errors en route - but it’s not how we have to do things anymore.
Making the connection with NeuroGym’s team, products and community has been one of the best decisions I’ve made in my journey towards achieving my personal and professional goals.
Happiness and money! It’s a huge subject.
Humans have been discussing and debating it for centuries. We’d love to hear your views on it. Join us by posting a comment below. Are there any insights in the article that resonate strongly with you?
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NeuroGym Team: NeuroGym’s Team of experts consists of neuroscientists, researchers, and staff who are enthusiasts in their fields. The team is committed to making a difference in the lives of others by sharing the latest scientific findings to help you change your life by understanding and using the mindset, skill set and action set to change your brain.