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Money and Happiness: Can Money Buy Happiness

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  1. Abstract
  2. Introduction
  3. Conclusion


Every person has a different understanding of happiness. Along with having different thought about the subject, people have personal ways to fulfill being happy. Does money buy happiness has sparked a heated debate as not everyone in this world has the same opinion. It’s an age-old question, the phenomenon of effects of wealth on happiness and its corresponding impact.

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In the past, advocates of reducing our focus on consumption have largely been motivated by the idea that there is something psychologically or spiritually unhealthy about high levels of materialism. Meanwhile, in today’s materialistic world, the phrase that ‘money can’t buy happiness’ is tending to be proved hence otherwise. Various sources addressing the correlations between money and happiness through subjects such as pro-social spending, materialism, the pursuit of spending on others, and the effects of homelessness on physical and mental health. In this modern era, money can buy anything, including individual gladness. Several people think that personal happiness has correlation with finance, while others believe that some factors bring huge implication on it.


As we explore deeper to find the answer whether money can buy happiness or not, let’s define the meaning of happiness and its relationship between money and the factors affecting both. So what defines happiness? One uses ‘happiness’ as a value term, roughly synonymous with well-being or flourishing. Other uses the word as a purely descriptive psychological term, akin to ‘depression’ or ‘tranquility.

Philosophers and thinkers from all generations have defined happiness as a mental state that is composed of positive thoughts and emotions which bring joy to the individual. Philosophers who write about ‘happiness’ typically take their subject matter to be either of two things, each corresponding to a different sense of the term: A state of mind a life that goes well for the person leading it. But questions about ‘happiness’ and ‘satisfaction’ in surveys have elicited subjective responses.

For instance, the General Social Surveys use a three-point verbal happiness scale, which asks the question: ‘Taken all together, how would you say things are these days – would you say that you are very happy, pretty happy or not too happy with the life you lead?’ Different measures of happiness and life satisfaction – correlate well with each other and, according to factor analyses, represent a single unitary construct. Happiness responses are correlated with physical reactions that can be thought of as describing true, internal happiness: people who report that they are happy tend to smile more and show levels of stress responses and less likely to commit suicide. In trying to come by a definition of happiness, Scholars, Psychologists and Socialist alike, came by two general theories as to what happiness means.

One is the hedonic theory. This suggests that happiness – or well being – is entirely about the attainment of pleasure and the avoidance of pain. The more pleasure you have and the less pain you experience, the happier you are and the greater your well- being. The hedonic view goes all the way back to the Greek philosopher, Aristippus, who described the ultimate goal in life as experiencing the maximum amount of pleasure.

Eudemonic theory on the other hand focuses on the meaning and defines well-being in terms of realization. ‘Happiness’ denotes a measure of an individual’s evaluation of her overall quality of life (Veenhoven 1997). The term is usually used interchangeably with ‘life satisfaction.’ The term that encompasses both concepts is ‘subjective well-being’. For example, the extent to which we are fulfilling our potential in life. The Greek philosopher Aristotle explained that happiness is a combination of immediate pleasures and a life well-lived. In other words, doing a good job with whatever you choose to do, along with the freedom from suffering. Meaning, how much money people made didn’t determine how happy they were, but how they made the money affected their happiness.

According to researchers from Harvard Business School- Grant Donnelly (The Happiness of Millionaires) and Michael Norton (Spending on Happiness), after examining 4,000 millionaires, about 90% would agree to work for less money if it meant that they would do something they consider to be personally rewarding.

An article with the title ‘Maybe Money Does Buy happiness After All’ (Leonhardst, 2008) and ‘If you’re richer, you’re happier’ (Finkelstein, 2008) reported that the more money equals more happiness. Insight into the happiness of millionaires is limited to a single, sample from the 1983 Forbes list of wealthiest people in the world. The study claimed around 49 wealthy individuals with each a net worth over $125M were compared to average earners from the same geographical areas. The very rich were, on average, somewhat happier than the average earners and reported moderately more satisfaction with life. The authors concluded that wealthier people are found to be happier that relatively poorer people. But the effects are small. In addition to the relationship between happiness and the sheer amount of money, certainly, the manner in which people spend their money has been shown to influence happiness. For example, spending on others and giving to charity, typically associated with greater happiness than spending on material goods for the self.

The New York Times and The Times of London, refute the long standing claim, commonly attributed to Richard Easterlin, that money does not ‘buy’ happiness supported with his reasons. The idea, that the more money does not means happiness, comes, from temporariness of material values. People’ level of happiness only increase as income increases. For example you are earning AED 12,000 a year. You will barely be able to afford food, let alone shelter and you will likely be very stressed or living off other people by scavenging. Now, let’s say you are earning AED 600,000 a year, you can afford a house, a Tesla car, and able to dine-in in a fancy restaurant while gather some savings so you can afford to travel first class anywhere you like, but you are doing basically the same things as before, but are working a lot harder and don’t have much time to spend with your family. Now, earning AED 12,000 a year, or AED 600,000 a year, is pretty unlikely, and it’s also an absurd amount of money usually acquired by making money with money not from actually working harder or contributing more to society. This is where most people actually think of pleasure and not happiness.

Material wealth influences happiness. But this depends on the ability of such materials to satisfy the needs of individual. The fact that more money gives one the freedom of acquiring material property implies that it can directly make one happier. People have varied motivations in life which in turn influences their definition of happiness. For example, Andrew Carnegie donated majority of his fortune to charities, foundations and universities as an effort to lead a useful and worthy lives.

This explains the misconception that there is a relationship between earning more money and being happier in life. Happiness and satisfaction arise from achieving personal goals and ambitions. Some inclined to believe that being well-off can be a plus, and within the realm of personal happiness, a more simplistic way of living might increase the consequences of being satisfied. Moreover, fundamental aspects of minimalistic life style relate to this reality that the demerits of saddening events pertain to money related occurrences. As a tangible example, some scientific research undertaken by a prestigious university has asserted that the downside of being in deficit of money is correlated negatively with inability to enjoy life. Hence, it is correct to presume the preconceived notion of money affecting happiness.

The modern world has given a price tag to everything, and thus, for many, wealth is indeed the root and ultimate happiness. Having wealth does have the advantages of sometimes allowing you to attend certain universities to pursue particular degrees but in order to do this you must have skills, talent, brain and endless sleepless nights to support this money in order to graduate. Money may allow one to get all the temporary comforts of life, but it must also be considered as to which type of person benefits from money as well. Furthermore, someone with vast riches may be considered lucky by many, but the individual himself only realizes that if there is no one to share the bounties with, there is indeed no sweetness, no matter how ripe the fruit may be. Some people have much money, but they are still bored and lonely, or an individual dying from an incurable illness, cannot be satisfied while being in possession of a great deal of money. If we look at it from practical side, there are many facts, that financial pressure has destroyed relationships. A phrase more money, more problems is strongly many people believe to be true. Alongside with more money many people suffers from addiction like drugs leading them to commit suicide or commit a crime or use money as tool to this things. Even though more money gives you this pleasure it doesn’t guarantee to make you happy. Money is only a tool. It is the grit in tough times to get through it and finally the joy of overcoming it. Happiness is subjective and financial sides does not determine it. Donnelly and Norton reviewed the literature and found that money contributes to happiness to meet basic needs – but above a certain level, more money does not yield much more happiness.

Within the realm of personal happiness, a more simplistic way of living might increase the consequences of being satisfied. Moreover, fundamental aspects of minimalistic life style relate to this reality that the demerits of saddening events pertain to money related occurrences. As a tangible example, some scientific research undertaken by a prestigious university has asserted that the downside of being in deficit of money is correlated negatively with inability to enjoy life. Hence, it is correct to presume the preconceived notion of wealth affecting happiness.

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To conclude, while there are several compelling arguments on both sides, which profoundly believe that the benefits of having money far outweigh its drawbacks. Not only do the advantages of being prosperous prove the significance of overall satisfaction in life, but also pinpoint basic life necessities implications. Research shows altruistic behavior is good for your emotional well-being and can enhance your peace of mind. Volunteering or supporting charitable functions can help you feel happier, as does mentoring, helping other people and expressing gratitude are some things to give more meaning and satisfaction and ways to become happier . There are more ways to get even more happiness including by giving it away or sharing what you have. Happiness begins with your state of mind. It is a endless accumulation of excess wealth ultimately leads to diminishing returns on happiness. This doesn’t mean the poor people should learn to be content without basic necessities or financial security. It is not exactly true that money cannot buy happiness. Money indeed can buy happiness – but only to a certain point. Once you make enough to support yourself without feeling anxious to other essential needs then the positive effects start to taper off. While there are several compelling arguments on both sides, I profoundly believe that the benefits of having money far outweigh its drawbacks.

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