BBC writer Tom Stafford has a knack for connecting dots–we’ve unpacked his thoughts on intelligence before–and his new column about the relationship between money and happiness is worth reading for anyone interested in money or happiness. Which, I think, is many people.
If we’re going to talk about what cash does to us, the lotto is a good place to start. Stafford makes the inference that the Powerball contestants think winning will make them happy forever–though the new winner Pedro Quezada seems stoked to just help his family. But Stafford warns that if you think the winning ticket will make you timelessly happy, you should see that the research suggests that a big payout won’t make a big difference.
It’s a little worrisome, right? Just because you can make Scrooge McDuck dives into a pile of money, you won’t be enduringly happy. Stafford mentions a study that found that people with big lottery wins ended up no happier than mere non-winners. He concludes that as long as you can avoid the basic miseries of life, buckets of spare cash won’t make you much happier than having little.
Why? Stafford spots two psychological habits possibly at work:
- The hedonic treadmill: Lotto winners (and, we could say, big earners) get used to their wealth and regress back to their baseline level of happiness
- It’s all relative: Seems that our happiness somewhat depends on how we feel relative to our peers. So if you move into a McMansion cluster, you’re going to be comparing whose private hanger is bigger than whose.
Stafford says that these factors certainly play a part, though “the deeper mystery is why we’re so bad at knowing what will give us true satisfaction in the first place”–and if we want to be happier, we need to do some detective work to solve it.
Like Nobel-winning psychologist Daniel Kahneman argues again and again in Thinking Fast And Slow, our choices don’t always reflect our long-term goals. Plus we are ever so sensitive to context. And ice cream.
A Booth School study demonstrates why: Participants were offered the option of working 6 minutes for a gallon of vanilla ice cream or 7 minutes for a gallon of pistachio. Under normal conditions, less than 30% of folks chose the 7-minute task–they liked pistachios. But another group had a quantitative hook.
For the second group, they added a point system: with 50-99 points you won vanilla, but for 100 points, you landed pistachio. So participants had the choice of working 6 minutes to earn 60 points–and score the vanilla–or working 7 minutes for 100 points, enough to scoop them some pistachio. And so now the majority went for the longer task, earning them 100 points to spend on the pistachio–even though the same proportion preferred vanilla in the first place.
As Stafford describes, the study came to a telling conclusion:
Participants are maximising their points at the expense of maximising their happiness. The points are just a medium–something that allows us to get the thing that will create enjoyment. But because the points are so easy to measure and compare–100 is obviously much more than 60–this overshadows our knowledge of what kind of ice cream we enjoy most.
This is an important insight for career planning: If you’re choosing between jobs, be mindful of whether or not you’re being predisposed by the “points” of the salary. And as the research suggests, a $75,000 salary is the threshold of happiness–or maybe just $50,000. So what’ll help on the road to happiness? Strong relationships are a key. And as David Whyte observes, the daily finding and doing of meaningful work is another.