Can money buy happiness?
The really short answer is money matters to people up to a point.
If you don’t have enough money it is extremely difficult to find happiness. Every person/family needs enough income to meet their basic needs of safety, shelter, food and health. However, once you get to a certain level of income you reach a law of diminishing returns and more money doesn’t make you any happier.
The Legatum Prosperity Institute publishes their prosperity index on an annual basis. I recall reading their research findings the “principles of prosperity” where two of the five principles tend to reinforce the financial happiness threshold theory. Please see two of the five principles below.
For very poor countries, raising incomes is the first priority.
For countries with an income per person of less than US $10,00 on average, income levels are the single strongest predictor of how happy that country’s people will be.
Money matters to people, but only up to a certain point.
As a country’s average annual income increases beyond $20,000 per person, further increases do not make people in the country, on average, more satisfied with their lives.
Source: The 2007 Legatum Prosperity Index
There you have it … more money doesn’t necessarily equate to more happiness, but not enough money makes it difficult to find happiness. Finding that financial happiness balance may be an extremely important consideration for future policy related to “Universal Basic Income” and its implementation.
What is your minimum level of income to be meet your basic needs and be happy (don’t worry!)?