Does money matter?

Will you be happier if you make more money?
   
Psychologists say probably not — assuming you aren’t poor, in which case a change in wealth can have a big impact on well-being.
   
After attaining a certain earnings level — some theorize that’s around $40,000 now in the United States, about double the government-defined poverty level for a family of four — increased affluence hardly affects happiness, according to social scientists who have examined how they are linked.
   
“I would describe happiness as a certain level of inner peace and feeling satisfaction with the family and friends that you have,” said certified financial planner Elisabeth Plax. “If that’s happiness, money is only going to add and subtract some, but it’s not going to touch the core.”
   
Research shows that people in rich countries are not happier than those in poorer ones. Ed Diener, a University of Illinois psychologist, found no significant difference when he compared the overall well-being of billionaires and millionaires on the Forbes 400 list of the richest Americans with Maasai herdsmen in East Africa.
   
A sudden windfall such as winning the lottery or coming into an inheritance does deliver a happiness jolt. But it’s usually fleeting.
   
Studies of multimillion-dollar lottery winners have shown that negatives prevailed for many of them, with higher rates of divorce, alcoholism, loss of friends and isolation. A surprising number of them also were broke within a decade after their windfall.
   
In December, the only granddaughter of Jack Whittaker, winner of the richest undivided lottery prize in U.S. history, was found dead of an apparent drug overdose. Whittaker said her life careened out of control with drugs and dangerous friends after the doting grandfather showered her with tens of thousands of dollars from his sudden fortune.
   
Even though the emotional payoff of money is often transitory, people say in surveys that they think more of it will lock in extra happiness.
   
The sentiment is on the rise among college students. An annual poll by the University of California at Los Angeles and the American Council on Education found that entering freshmen rated becoming “very well-off financially” first on a list of 19 goals, ahead of choices such as helping others, raising a family or becoming proficient in an academic pursuit.
   
One reason we like to chase money and possessions is  the temporary rush we get from landing them. But the thrill fades in what economist Richard Easterlin calls “hedonic adaptation and social comparison.” In other words, once you get the goodies, they quickly become old hat and you want more.
Easterlin points to 10 big-ticket consumer items on a “good life” list, ranging from house, car and television to travel abroad, a swimming pool and a vacation home. As people acquire more of these items, their aspirations for such possessions rise in proportion to the gains, Easterlin says, leaving them “no happier than before.”
   
Gregg Easterbrook explored this gap in perceptions about money and happiness in his book, “Progress Paradox: How Life Gets Better While People Feel Worse.”
   
“Envy and dissatisfaction come from lacking what others possess, but coming into possession of those things does not confer happiness,”
   
Easterbrook explained in an interview published in BookPage. “Seeing the BMW may make you feel unhappy, but psychological studies show obtaining the BMW would not make you happy.”
   
One student of wealth and happiness says the emotional boost from a lodge in Vermont or a sleek Jaguar levels out quickly because human beings aren’t designed to be in constant happiness mode. If that happened, we wouldn’t keep striving to do things. 
   
“There’s amazingly little that will raise your happiness for a long time,” said Carnegie Mellon University economist George Loewenstein.
   
Television producer Jon de Graaf, who made a PBS documentary on “affluenza,”  noted that the number of Americans calling themselves “very happy” peaked in 1957 at 35 percent and has declined to 30 percent today, according to happiness data from the National Opinion Research Center at the University of Chicago. Over the same period, average annual after-tax income in constant dollars has more than doubled as the rich got richer and more women entered the labor market.
   
The Institute for Research on Unlimited Love is trying to answer the next obvious question: If materialism doesn’t bring happiness, what does? The institute, established in 2001 at Case Western Reserve University’s medical school in Cleveland, has directly paid for 21 scientific studies of altruism and the human motivations for altruistic and compassionate behavior.
   
Happiness is generally not something you can buy or attempt to gain for yourself, Institute President Stephen Post said. It’s a by-product of helping others.
   
Financial planner Plax, head of Plax & Associates Financial Services in Beachwood, Ohio, said that for people of means, that usually entails sharing their wealth.
   
“What I always say to people is give what you can, but then stretch a little more,” she said, laughing. “Because that’s how much you can give.” (RNS)