3 things to consider if you want to achieve both wealth and happiness

BABAR DHARANI - 15 October 2019

We’re often told that to pursue our dreams we may have to sacrifice wealth, but research is showing that the opposite is true. 

Cardi B’s latest pop music video, ‘Money’, has been viewed almost 90 million times. This pop video with its lyrics: “I was born to flex (Yes!), Diamonds on my neck (Woo), I like boarding jets, I like morning sex, but nothing in the world that I like more than cheques (Money)”, does not leave much to the imagination!  Amongst all that appeals to the rapper’s young target audience, ranging from nudity to contentious language, fashion and glamour, what I, as a researcher in the field of positive psychology, found surprising was the claim that money ranked top on this wish list, when research indicates that the goal of most Millennials is to be happy at work, not necessarily rich.

Left, right and centre, Millennials are criticised for their addiction to technology, for their novel takes on social etiquettes and work ethics, and for their relentless and bold exhibition of entitlement in all aspects of life. So, is the drive to be rich and happy another unrealistic desire of the new generation, or is it an achievable goal that we should all be striving for? I believe there are three things to consider in this quest:

1. Choose a job or profession that makes you happy 

In the workplace, where we spend the majority of our lives, the questions of happiness and success are often framed as mutually exclusive. Following our passions, or true calling, is said to be a recipe for happiness, but that this might come at the sacrifice of high income. Now new research is demonstrating that this may not be true. 
It has long been postulated that success at work makes people happy, but a 2018 article in the Journal of Career Assessment which reviewed the relationship between happiness and workplace success suggests that it may be the other way around: happiness is the source for success. The research confirmed that happiness at work is related to workplace success, but that happiness, more often than not, precedes success. So, a dentist with a passion for teeth is bound to be more successful at his or her job than those who choose the profession due to the income expectations from the profession. The ability to last a lifetime in a job, profession or a company where we enjoy work makes a significant difference to our accumulated income over time. This longevity may very well be fuelled by our happiness at work. So, choosing a job or profession that makes us happy is important.

2. Strive for financial freedom, not riches beyond belief

Money and happiness may go hand-in-hand, but this is not the end of the story. There is a twist to this relationship! As we gather wealth, even if sourced from an enjoyable job or business, the relationship between wealth and happiness weakens. While studies showing that money can and does have the ability to buy happiness, there is the paradoxical finding that national happiness does not seem to increase with economic growth. So, if we are getting richer, hopefully from working in a job that allows us happiness at work, why is the relationship between happiness and money not stronger?  In other words, why are people who have more money not much happier than those with less money?

The phenomenon is academically known as ‘the diminishing law of returns’. It is best explained with the analogy of drinking water. The first glass of water that quenches one’s thirst on a hike on a hot summer’s day is truly cherished! The second glass is enjoyed; and the third, if drunk, helps ensure that one doesn’t return to the position of suffering associated with being thirsty. By the fourth, drinking a glass of water that was initially cherished, fails to bring any joy, and by the fifth, it starts to become a pain. Imagine the sixth glass, and just the thought can bring us unhappiness!  

Similarly, when we are on the poverty line, defined as earning less than US$1.90 per day, or dependent on others for money, additional income and financial independence goes a very long way to increasing the level of our happiness. 

Financial independence has probably been experienced by most of us when we first succeeded in providing for ourselves, after having been dependent on our parents or guardians. The next level of financial well-being is when we are financially free. Perhaps we cannot afford everything at this stage, but we can sufficiently satisfy our needs and obligations. We may have saved sufficiently for a rainy day or our children’s education, possibly paid off our bonds and mortgages, or even have sufficient passive income to allow for the freedom to do what we please in respect of choice of work, and the amount of time available for leisure. In many ways this is the sweet spot that we should all strive for.

3. Pay attention to what you spend your money on

Beyond financial freedom, the relationship between wealth and happiness flexes. Not only does additional money fail to contribute towards additional happiness, it can work to actively decrease our level of happiness. Like that fifth and sixth glass of water! A range of factors could be contributing to this. In my experience, working amongst the richest of the rich, I have observed several factors from the stress and pressure of being in a top job – including having made sacrifices of time with family and friends – to difficulties in the management of one’s assets base and deep fears of losing wealth, to being surrounded by "false friends" which can lead to a lack of perspective on life and self. 

If we are fortunate enough to attain this level of wealth, we need to guard against falling into these “wealth traps” and research from the Journal of Consumer Psychology suggests how. Essentially, the researchers argue that we need to pay more attention to how the money is spent. This can be achieved by (1) buying more experiences and fewer material goods; (2) using our money to benefit others rather than ourselves; (3) paying close attention to the happiness of others, among other things.

In the age of commerce, the impact of money on our personal happiness, our families, friends and communities cannot be ignored, and we need to proceed with care to maximise our chances of wealth and happiness. Like Cardi B and her fans, we are free to “like those cheques”, but to ensure real happiness in the long term, we need to pay attention to how we are spending our money and time. 

Dr Babar Dharani is an associate of the Allan Gray Centre for Values-Based Leadership at the UCT Graduate School of Business.


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