Money: The Real Truth About Money

Why we remain keen for green even though it often gives us more social anxiety than satisfaction
If you made a graph of American life since the end of World War II, every line concerning money and the things that money can buy would soar upward, a statistical monument to materialism. Inflation-adjusted income per American has almost tripled. The size of the typical new house has more than doubled. A two-car garage was once a goal now we!re nearly a three-car nation. "esigner everything, personal electronics and other items that didn!t even e#ist a half-century ago are now affordable. $o matter how you chart the trends in earning and spending, everything is up, up, up. %ut if you made a chart of American happiness since the end of World War II, the lines would be as flat as a marble tabletop. In polls ta&en by the $ational 'pinion (esearch )enter in the *+,-s, about one-third of Americans described themselves as .very happy.. The center has conducted essentially the same poll periodically since then, and the percentage remains almost e#actly the same today. /In a "ecember TI01 poll on happiness that phrased the 2uestion differently, *34 of respondents said they were brimming with happiness .just about about all the time,. and about 5-4 said they were fre2uently happy.6 7et if you charted the incidence of depression since *+,-, the lines suggest a growing epidemic. "epending on what assumptions are used, clinical depression is 8 to *- times as common today than two generations ago. A recent study by (onald 9essler of :arvard 0edical ;chool estimated that each year, * in *, Americans e#perience an episode of major depression-meaning not just a bad day but depression so debilitating that it!s hard to get out of bed. 0oney jangles in our wallets and purses as never before, but we are basically no happier for it, and for many, more money leads to depression. :ow can that be< 'f course, our grandmothers, many of whom lived through the "epression and the war, told us that money can!t buy happiness. We don!t act as though we listened. 0illions of us spend more time and energy pursuing the things money can buy than engaging in activities that create real fulfillment in life, li&e cultivating friendships, helping others and developing a spiritual sense.

more popularly. when people were as&ed about their major source of happiness.shortcuts to wellbeing. Too many Americans view e#pensive purchases as .. 'ver the past two decades. your reference an#iety will be low.bedroom house may seem fine. .and four-bedroom houses. in fact.--. %ut if your two-bedroom house is surrounded by three. shows that Brandma had a point. %ut people are poor predictors of where those shortcuts will ta&e them. there is ample evidence that being poor causes unhappiness. an increasing body of social-science and psychological research has shown that there is no significant relationship between how much money a person earns and whether he or she feels good about life.. most people judge their possessions in comparison with others!. "oes my house meet my needs< Instead they as&. :e found the Corbes =-. your reference an#iety may rise.tudies by (uut @eenhoven.a year--are rendered unhappy by the relentless frustration and stress of poverty. The study. 1dward "iener.. /The median annual >.were only a tiny bit happier than the public as a whole.till. money ran&ed *=th. &eeping up with the Doneses.a year..--. says 0artin . %ut you &new that. show that the poor--those in 1urope earning less than about A*-. That seems true because of a phenomenon that sociologists call reference an#iety--or.. which has been replicated in the >. .or so.We say we &now that money can!t buy happiness. a sociologist at 1rasmus >niversity in (otterdam. The surprise is that after a person!s annual income e#ceeds A*-.uddenly that two-bedroom house--one that your grandparents might have considered 2uite nice. @eenhoven found. ?eople tend not to as& themselves. . even lu#urious--doesn!t seem enough.6 After that. And so the money you spent on it stops providing you with a sense of well-being.--. TI01!s poll found that happiness tended to increase as income rose to A.. %ecause those with wealth often continue to feel jealousy about the possessions or prestige of other wealthy people. household income is around A=8.eligman.---. To be sure. money and happiness decouple and cease to have much to do with each other. even large sums of money may fail to confer well-being. In the TI01 poll. According to that thin&ing. Is my house nicer than my neighbor!s< If you own a two-bedroom house and everyone around you owns a two-bedroom house. a psychologist at the >niversity of ?ennsylvania.-. we behave as though happiness is one wave of a credit card away. and your two. interviewed members of the Corbes =--. more income did not have a dramatic effect. . with someone around the corner doing a tear-down to build a 0c0ansion. a psychologist at the >niversity of Illinois. the richest Americans.

/$ever mind whether they!re happy. the rich are getting richer faster.ft.4 of households has brought about a substantial cohort of people who live notably better than the middle class does. )arol Braham.candinavian countries. new economic forces have changed all that. they need more to live well. and you!ll begin to long for a fourbedroom abode.uppose you lived in a two-bedroom house for years and dreamed of three bedrooms. That money never satisfies is suggested by this telling factF polls show that Americans believe that. an economist at the %roo&ings Institution in Washington. are li&ely to be happier . We seem conditioned to thin& we do not have enough. more money may engender only more desires. Wonder what %ill Bates! 55.. it is the very increase in money--which creates the wealth so visible in today!s society--that triggers dissatisfaction. happiness follows. That wealthier minority is occupying ever larger homes and spending more on each change of clothes than others spend on a month!s rent.6 Want a pee& inside "onald Trump!s gold-plated world< Dust clic& on the T@.----s2. most people &new relatively little about those who were living higher on the hog. . As material e#pectations &eep rising. ?eople living modestly but anticipating better days to come. and the rest of us are none too happy about it. Then again. the majority lived in small towns or urban areas where conditions for most people were appro#imately the same--hence low reference an#iety. Will it bring you happiness< $ot necessarily. if we thin& our lot is improving. television and the Web ma&e it easier to &now how the very well off live. megamansion is li&e< Dust download the floor plan from the InternetE ?arado#ically. 0eanwhile. history. It all feeds middle-class an#iety. In nations with high levels of income e2uality li&e the . even when the middle is doing '. 7ou finally get that threebedroom house.. even if objectively our lives are comfortable. most almost immediately stop feeling grateful for their elevated circumstances and focus on what they still don!t have.. whatever their income level. found that people!s e#pectations about the future may have more influence on their sense of well-being than their current state does. 1ven those ma&ing large sums said still larger sums were re2uired. Three bedrooms will become your new norm. "uring much of >.. Braham thin&s. As men and women move up the economic ladder.. (apid growth in income for the top .9. "iener notes. In other words.What people want in terms of material things and life e#periences has increased almost e#actly in loc&step with the postwar earnings curve. amplifying our reference an#iety.'ur soaring reference an#iety is a product of the widening gap in income distribution. . Also. well-being tends to be higher than in nations with une2ual wealth distribution such as the >. %ut in the past few decades. and he!ll show you.

than people living well but not loo&ing forward to improvements in their living standards. And guess what< The >. family. ?overty remains a star& reality amid American affluence. ?sychology and sociology aside. parado#ically.. Then they wonder why they don!t feel happy.. If the typical new house is more than I. may. but the first is more li&ely to feel good about life. high standards of living in the >. if there are more cars and truc&s in the >.--. social well-being have improved so much so 2uic&ly in the postwar era that another big leap seems improbable. education levels and other basic measures of >. In real terms. ft. The second person is much better off in financial terms. if a bit whiny about it.. have become an impediment to happiness. Income growth has almost come to a halt for the middle class. but chasing money rather than meaning is a formula for discontent. although median household income is higher than ever.4 since *+G=. %ut because we are all conditioned to thin& there!s something wrong if we don!t ma&e more money each year. median household income has increased only around *. hasn!t had a decent raise in two decades. 1veryone needs a certain amount of money. Ci#ated on always getting more. than who are destitute. That means most people have never had it better but do not e#pect any improvement in the near future. there is a final reason money can!t buy happinessF the things that really matter in life are not sold in stores. . respect. in the grand scheme it!s better that there are large numbers of Americans who are materially comfortable. and they cannot be purchased with cash.. we fail to appreciate how much we have. the belief that your life has purpose--those are the essentials of human fulfillment..-.8-.a year and foresees a *-4 raise.--.but does not e#pect any salary increase..-. a place in the community.. Hiving standards. and the other ma&es A*. Hove. Too many Americans have made materialism and the cycle of wor& and spend their principal goals.s2. friendship. if more than half of high school graduates advance to college. 'f course. And never forgetF * in G Americans are poor. ?eople tend to focus on the negative part and ignore the positive. )onsider two peopleF one earns A. than there are licensed drivers--all current statistics--then the country may need stability and e2uality more than it needs more money...

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