From the Forums: Will More Money Make You Happier?
One of our best forum members, ed is asking the question of whether more money brings you greater happiness or is it living in a wealthier country?
Perhaps it is not about how much you earn, the flow, but how much wealth you have, the stock. When you have a larger bank account you experience a pure income effect. In this case, people born with wealth, who never had to work, will be the happiest.
The Wealth Report cites a PNC Wealth Management Survey of wealthy individuals (by wealthy they mean Americans with $500,000 or more in investable assets). 69% of those surveyed made their fortunes themselves; just 6% inherited most of their money. The self made respondents are significantly happier than the heirs.
You might expect the heirs to be the happiest. They have the smallest opportunity cost to foregoing work, thus are likely to have more leisure time. They also have been able to consume more leisure during the course of their lives because they did not spend their youth building their fortune.What do you think?
Or it may be the self-made wealthy worked hard in their youth and can appreciate their increased leisure and consumption more. They also have or had successful careers which they can feel good about.
It may not be the wealth that makes us happy, but rather being successful. Living in rich county may not be so important so much as being somewhere that provides opportunities to improve your financial well being.