If you think that your happiness requires you to have a boatload of money, think again. A revealing new research study asks, “Can money make you happy?” The answer is… it depends.
The world says money buys you happiness. Philosophers declare it doesn’t. But science tells a story somewhere in between.
Researchers from Harvard Business School recently published a revealing paper entitled, The Happiness of Millionaires. In it, scientists share the results of a large study of how people interact with money and how cold hard cash influences our sense of happiness.
Here are three important lessons we’ve learned about how money can amplify your joy in life:
1. Earn It Yourself
We’ve all thought at some point that life would be easy and we’d be perfectly happy . . . if only we’d win the lottery jackpot. Or if we had a wealthy relative who left us an enormous inheritance.
But, surprisingly, analyses of real people reveal a different truth. The Harvard study actually shows that earning your money makes you happier than having it handed to you.
Think about it: It was probably next to nothing, but how proud were you when you received that first paycheck as a teenager? And just how much do you value every dollar you sweat to bring in when you’re building your very own business from the ground up?
When you earn the money that you receive, it’s not just cash in your bank account. It’s affirmation of your solid character and the hard work you’ve invested to bring that money home to your family and put it to good use.
2. Create Financial Security
If you’re committed to a financially responsible present and a Financially Free future, you’re not really in it for the money. Sure, you want to earn, save, invest and reap monetary rewards.
But what’s your real motivation? For you, it’s probably some combination of the following goals:
- Ensuring the well-being of yourself and your loved ones.
- Being free to decide to work . . . or not.
- Having options for how you spend your time.
- Not having to pick and choose what benefits to give your kids.
- Being able to make a difference in causes that matter to you.
Face it: A precarious financial situation is not the path to happiness. Wondering if you’ll lose the house because your mortgage is in default? Worrying that your spouse and kids will suffer financially if you die? Drowning in debt with no possibility of retirement in your future? That’s a recipe for stress and misery.
So working to establish your financial security—that’s a two-fer. Not only do you reap the rewards of responsible money management, but you get to enjoy a happier life as well.
3. Give Generously
That same Harvard study found that material possessions aren’t all they’re cracked up to be. So if you think that snatching up a sweet ride or a sprawling estate is your ticket to happiness, think again.
Instead, research shows that it’s not spending on things that makes you happiest. It’s spending on experiences and causes that matter.
Ancient philosopher Laozi famously said, “The wise man does not lay up his own treasures. The more he gives to others, the more he has for his own.” In sharing your resources with people in need and charities that make a difference, you feel that you’re a part of something larger.
You’re not just accumulating wealth for the sake of having it or even to look after your small circle of loved ones. Instead, you’re impacting the world and leaving a legacy beyond yourself.
So if you’ve been thinking that money is an end unto itself, you’ll be disappointed. When your efforts create cash flow, when you build a secure future and when you share what you have, your money transforms into a powerful agent for change and, yes, even happiness.
Dr. Tony is the co-founder of MindShift.money and the best-selling author of three books on personal and business finances. Having achieved Financial Freedom at 27, Dr. Tony believes that through Financially Fit Bootcamp and Cash Flow Cure everyone can get there. He has made it his life’s mission to help others live a life where their money works for them—not the other way around.