The Link Between Money and Happiness: Myth or Reality?

The Popular Belief and the Partial Truth

The idea that money buys happiness is one of the most deeply rooted myths in our culture.

We convince ourselves that a pay raise, a more expensive car or a bigger house are the keys to achieving a lasting state of contentment.

There is undeniably a partial truth to this belief.

Research has consistently shown that people living in extreme poverty tend to be less happy than those with a stable economic situation.

At the national level, richer countries tend to have higher life satisfaction indices than poorer countries.

Money, to some extent, is an important factor because it eliminates significant sources of stress and worry, such as food insecurity or homelessness.

It provides the resources needed to live a dignified and comfortable life. However, the fundamental mistake is to extrapolate this logic and assume that an infinite amount of money will bring an infinite amount of happiness.

Reality, as science shows, is much more complex and nuanced.

The Glass Ceiling of Money: When More is Not Better

The relationship between income and well-being is not a straight upward line, but a flattening curve.

Various studies have identified a "glass ceiling" or saturation point, a level of income at which additional money has a diminishing, or even zero, impact on daily happiness.

While the exact numbers may vary, the conclusion is the same: once our basic needs are met and we enjoy a reasonably comfortable standard of living, earning more money does not make us significantly happier.

People fall into the trap of thinking, "If only I could double my income, I would be happy," but those who already earn that amount often feel the same way about doubling their own.

This phenomenon suggests that the problem is not the amount of money, but our perception of what we need to be happy, a goal that always seems to move just out of reach.

The High Hidden Cost of the Pursuit of Wealth

A crucial aspect often ignored in the money-happiness equation is the price paid to earn that extra money.

High-paying jobs often come with long working hours, high levels of stress and enormous responsibility.

The time and mental energy spent in the pursuit of wealth is often subtracted from other areas of life that are much more potent sources of happiness, such as relationships with family and friends, hobbies or rest.

In the end, the small increase in pleasure that a luxury item can provide is completely overshadowed by the decrease in well-being caused by stress and lack of free time.

In many cases, the relentless pursuit of more money leads to a net loss of happiness, as the cost of the sacrifice far outweighs the benefit of the material reward.

The Adaptation Trap and Misperception

Finally, two psychological factors explain why money is such an ineffective source of long-term happiness.

The first is hedonic adaptation, also known as the "hedonic treadmill." We get used to our new circumstances incredibly quickly.

The new car is exciting for a few weeks, but soon becomes simply "the car."

The pay raise brings initial joy, but quickly becomes the new standard.

The second factor is our misperception. Studies show that people consistently overestimate the impact