It turns out money can buy happiness
How much do you need to earn to be happy?
Swiss philosopher Jean-Jacques Rousseau said money can’t buy happiness, but a study from Purdue University has identified the amount of money a person needs to earn to be happy.
The study’s lead author Andrew Jebb said the figure for wellbeing had long been debated.
“What we see on TV and what advertisers tell us we need would indicate that there is no ceiling when it comes to how much money is needed for happiness, but we now see there are some thresholds,” Mr Jebb said.
“We found that the ideal income point is US$95,000 for life evaluation (what people think of their life) and US$60,000 to US$75,000 for emotional wellbeing.”
In Australian dollars, this equates to approximately $130,000 for life satisfaction and $84,000-$106,000 for wellbeing.
The study also found that once the happiness threshold was reached, further increases in income were associated with reduced life satisfaction and a lower sense of wellbeing.
Mr Jebb said incomes beyond the threshold could drive people to pursue material gain and engage in social comparisons which could, ironically, lower wellbeing.
“At this point they are asking themselves, ‘Overall, how am I doing?’ and ‘How do I compare to other people?’,” he said.
“The small decline puts one’s level of wellbeing closer to individuals who make slightly lower incomes, perhaps due to the costs that come with the highest incomes.
“These findings speak to a broader issue of money and happiness across cultures.
“Money is only a part of what really makes us happy and we’re learning more about the limits of money.”
The study was based on data from the Gallup World Poll, a representative survey sample of more than 1.7 million people from 164 countries.
The information in this article has been prepared for general information purposes only and not as specific advice to any particular person. Any advice contained in the document is general advice and does not take into account any person’s particular investment objectives, financial situation or needs. Before acting on anything based on this advice you should consider its appropriateness to you, having regard to your objectives, financial situations and needs.