We’ve all heard that money can’t buy you love. Now comes the news that once you reach a certain level, it can’t even buy you happiness.
Australian Unity and Deakin University released the results from Australia’s most comprehensive study ever into happiness and wellbeing last week. The report spanned ten years of research, 24 surveys, with responses from more than 80,000 participants. Some of the findings were enough to make you throw in the suit and tie.
Most importantly for investors, the report revealed that once you reach a certain level, money does not really bring happiness. In Australia, this happens once gross annual household income reaches between A$101,000 to A$150,000 per year. After that, the report’s author, Professor Bob Cummins of Deakin University’s school of psychology, said you’re better off investing in relationships, not shares.
“Our research shows that having an intimate relationship is the most important thing. If you’ve got one solid intimate, emotional relationship, then you’re very well off,” said Cummins.
But the report did show that money brings happiness to those on lower incomes. For a household earning A$15,000 per annum it would take just A$6,000 to increase their wellbeing level by a single point. For households earning between A$151,000 and A$250,000 per annum, it would take an extra A$147,000 to boost wellbeing levels by the same margin.
“If you can’t afford the basics, it leads to a great deal of unhappiness. On average in Australia, people need about A$100,000 of gross household income. That will pretty much maximize the happiness you can get from money. Beyond that, money doesn’t matter. If you’re living with unhappy children what can you do? There are some things where money is not an inadequate defense,” Cummins said.
So what does bring us happiness? Well the results are surprising.
According to Professor Cummins disasters like September 11, the Bali Bombings and the Black Saturday bushfires in Victoria were all healthy for the nation’s sense of wellbeing.
“There’s a phenomena called the rally index, as in people rally to the flag. People turn to each other and the government in times of need for support. People connect with others and get a sense of being part of a community. This is good for wellbeing because it gives people a sense of belonging to a larger group."
Giving both your money and time to charity is also good for wellbeing. The study found that volunteers are amongst the happiest people in Australia. Professor Cummins puts this down to the fact that as human beings, we need to feel like we are part of a community.
“Volunteering brings people into contact with other people in a positive environment, it gives us a sense of we’re in this together to make the world a better place. It’s a very positive thing.”
So what then is the key to a happy life? According to the report, the answer is to invest in your relationships and community, just as much as you invest in the markets. Plus, don’t forget to have a drink while you do it. The study found that people who drink every day have a very high rate of wellbeing, while those that don’t drink at all, came last in the category.