26 Jan 2010

Money Can Buy You Happiness!

There is new peace of research suggesting that actually money does make us feel better, happier even. The trick is in how we get access to the money as well as when and how we spend it.

People surveyed after they won a substantials amount of money reported to be very happy straight after finding out about their luck, but after a while their level of happiness was back to normal.

Now, the research that I am talking about says
that  the best way to be happy is to be paid hourly! This is one of the rare occasions where receiving money has shown a direct influence on the level of happiness.

"If you are paid by the hour or account for your time on a timesheet, you begin to see the world in terms of money and in terms of economic evaluation," said Jeffrey Pfeffer, the Thomas D. Dee II Professor of Organizational Behavior at the Stanford Graduate School of Business. "To the extent that time becomes like money and money becomes more salient, the linkage between how much you earn and your happiness increases."
The reason for this effect is thought to be linked to the fact that hourly paid employees are aware how much each hour of their work is worth. They think about money more often and start comaping the value of their work to the degree of happiness they feel.

And once you've earned some "happy money" there are two things to do:

Spend Your Money on Experience

A study suggests that spending money can make you happy. This is true as long as you are spending it on experience that provides you with happy memories for a long time rather than buying the next best gadget.

We tend to get bored of material purchases but enjoy memories for much longer.

Save Money for Later

Another research, published in the of Psychological Science found that while we are in good health the amount of money we have at our disposal does not influence our well-being. The picture changes once we get ill or disabled. Peter Ubel, the lead research, says:
"Happiness and well-being may not depend on a person's financial state in times of health, but when that health fails, as it will eventually for most of us, money matters,"
A survey of 478 Americans over nine years, before and after they became disabled, found that wealth generally allowed "substantially better well-being, and less sadness and loneliness," researchers reported.

According to a study published in 2005 in the  Journal of Palliative Care people 70 or older whose net worth was at least $70,000 were 30 percent less likely than poorer people to have felt pain often during the year before they died.

The Formula of Happiness

New Scientist has published a very good article on the formula of happiness and the underliying research. It boils down to following components:

  1. Earn more money (up to a point)
  2. Desire less
  3. Don't worry if you are not a genius
  4. Make the most of your genes
  5. Stop comparing your looks with others
  6. Make friends and value them
  7. Get married
  8. Find God (or a belief system)
  9. Do someone a good turn
  10. Grow old gracefully

So, now we all know what to do, don't we?!
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