While some assume that more money equals more happiness, multiple studies have tried to find the magic number around yearly income that makes people content. In fact, a 2010 Princeton University study revealed that happiness increases higher and higher until $75,000 yearly is achieved, where it then levels off and earnings might not necessarily improve happiness. Meanwhile, a Purdue University study conducted last year discovered that $75,000 remains that focal point income for happiness when it comes to emotional wellbeing; however, for true happiness, your ideal annual earnings is at $95,000.
Still, perhaps the opposite is true. Rather than thinking that income leads to happiness, maybe happiness leads to higher income?
Go Banking Rates reported that a recent study published in the Proceedings of the National Academy of Sciences of the United States of America revealed that those youth and young adults who scored an increased higher life satisfaction earned increased levels of income later in life.
Why could happy people be making more money? Here’s why:
- Optimism: Employees that are happy could be making more money as their optimism opens them up to new experiences and opportunities. They are more willing to take risks, accept challenges, and view mistakes as a learning opportunities.
- More Productive: A study conducted by Coventry, England’s University of Warwick found a connection between productivity and happiness. The research revealed that those who were made to feel happier had an increased productivity of 12% over the ones that were not. Increased productivity opens workers up to salary increases and even promotions.
- Better Performance Reviews: If they are being more productive, makes sense that they’ll do better during those quarter and annual performance reviews. Additionally, happiness promotes a good work environment and boosts morale; something most employers find very valuable in an employee.
- Less Sick Days: As per a study by Wesleyan University in Illinois, on average, happy workers tend to take 15 fewer “sick days”, when compared to their “unhappy” colleagues. It also revealed they live about 10 years longer too.
- Problem Solvers: The thing about happy people is that they likely won’t complain about work-related issues, rather, they’ll try and find solutions to problems.
- Hunger To Learn & Improve: Happy people may earn more because they are always about self-improvement. They invest in themselves with a hunger to learn more, and do more.
So, rather than focus on the negative, direct your energy to the positive. Doing so will make you happier, and may earn you more money in the long run!
Derek Lebert is a CPA and entrepreneur. Derek has worked in various senior roles in finance.