Workers are concerned about it when weighing a promotion that would bring longer hours and more stress along with higher pay. In many ways, achieving the right balance depends on one’s values, priorities, family obligations and spending habits. But, according to a recent study in the Proceedings of the National Academy of Sciences, there is something of a magic number when it comes to income and happiness.
Beyond household income of $75,000 a year, money “does nothing for happiness, enjoyment, sadness or stress,” the study concluded. It’s not so much that money buys you happiness but that lack of money buys you misery, said Daniel Kahneman, a professor emeritus of psychology at Princeton and one of the authors of the study. “The lack of money,” he said, “no longer hurts you after $75,000.”
Where you live and the cost of living there has only a small influence on that number, he added. (That may be a revelation to some Manhattanites.) The study, which analyzed Gallup data of 450,000 randomly selected Americans, did find that one’s “life evaluation”, a self-assessment of one’s life, continued rising well above $75,000. But this is not the same as experiencing day-to-day happiness.
“Many people want to make a lot of money, but the benefits of having a high income are ambiguous,” said Kahneman, who is also a Nobel laureate in economics. When you are wealthy, you are able to buy more pleasures, but a recent study suggests that wealthier people “seem to be less able to savor the small things in life,” he said.
Even so, some people seem almost hardwired to want to make money. A 2007 article in The Journal of Happiness Studies reported that college freshmen who stated that they wanted a high salary by and large achieved that goal 20 years later.
The article said that “individuals with strong financial aspirations are socially inclined, confident, ambitious, politically conservative, traditional, conventional, and relatively less able academically, but not psychologically distressed.”
People who sought high incomes were more likely to major in things like business, engineering and economics, it said, while people for whom high income was not paramount gravitated toward the liberal arts and social sciences. “Wanting money is not a recipe for disaster, but wanting money and not getting it, that’s a good recipe for disaster,” Kahneman said.
People who want to become performing artists are likely to be unhappy, because most will fail, he said. Becoming a wealthy rock star is a common dream when you are young, but when you are in college, you should try to take a longer-term view, he said.
These days, of course, many people are worried about whether they will get a job at all. Understandably, the recession is causing more people to place the financial rewards of a career first, said Nicholas Lore, founder of the Rockport Institute, a career coaching firm, and author of “The Pathfinder.”
This could backfire, though, as people who initially pursue a field because of the salary realize that the work is unsatisfying. Lore has recently coached a lawyer who decided to forgo his high pay in favor of teaching law, an investment banker who decided to switch to a green energy company and a dentist who decided to become a schoolteacher.
It all depends on priorities, Lore said. Some people are willing to make lifestyle changes because the intrinsic rewards of following a passion or making a difference are more important than a high salary in an unenjoyable career, he said.
In the end, people should pursue what they’re interested in, said Daniel H. Pink, author of “Drive: The Surprising Truth About What Motivates Us.” Looking at lists of careers with the highest salaries tends to be a fool’s game, he said. “It’s very hard to game the system, in the sense that situations and conditions change so quickly that a field that is hot today might be only lukewarm in five or 10 years,” he said. “It might even be nonexistent.”
Let’s say you see that accountants are getting decent salaries directly out of college, he said, but you don’t really like accounting. “Chances are you’re not going to be very good at accounting,” and your salary will reflect that, he said. “Generally, people flourish when they’re doing something they like and what they’re good at.”
For his part, Lore said he was concerned that current economic woes might force people into poor career choices. “I would prefer that the economy was doing better and people were more adventurous because it often has an enormous effect on the quality of their life,” he said. Many people equate success with a high income, but, “How can someone say they’re successful if they’re not happy doing their work? To me, that’s not success.”
This could backfire, though, as people who initially pursue a field because of the salary realize that the work is unsatisfying. Lore has recently coached a lawyer who decided to forgo his high pay in favor of teaching law, an investment banker who decided to switch to a green energy company and a dentist who decided to become a schoolteacher.
It all depends on priorities, Lore said. Some people are willing to make lifestyle changes because the intrinsic rewards of following a passion or making a difference are more important than a high salary in an unenjoyable career, he said.
In the end, people should pursue what they’re interested in, said Daniel H. Pink, author of “Drive: The Surprising Truth About What Motivates Us.” Looking at lists of careers with the highest salaries tends to be a fool’s game, he said. “It’s very hard to game the system, in the sense that situations and conditions change so quickly that a field that is hot today might be only lukewarm in five or 10 years,” he said. “It might even be nonexistent.”
Let’s say you see that accountants are getting decent salaries directly out of college, he said, but you don’t really like accounting. “Chances are you’re not going to be very good at accounting,” and your salary will reflect that, he said. “Generally, people flourish when they’re doing something they like and what they’re good at.”
For his part, Lore said he was concerned that current economic woes might force people into poor career choices. “I would prefer that the economy was doing better and people were more adventurous because it often has an enormous effect on the quality of their life,” he said. Many people equate success with a high income, but, “How can someone say they’re successful if they’re not happy doing their work? To me, that’s not success.”
Source ET.com
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