In April you might have heard of Dan Price, owner of a credit card payment company, Gravity, who made the decision to raise all of his employees salaries to a minimum of $70,000 and take a pay cut for himself. A bold move no doubt and one that certainly speaks to a huge degree of courage. Back when this news was initially covered Mr. Price was talking about how he had learned $70,000/year was the tipping point for happiness; less money equaled a good amount of struggle and more money didn’t necessarily equate to greater happiness. I’ve found at least one article which suggests that $50,000/year is the pivot point and although originally published in 2012 by LearnVest, it sure seems likely that somewhere between $50-70,000/year lies the elusive place of financial happiness.
In April 2012 Forbes reported this in reference to the LearnVest piece, “That’s the finding of a recent poll by the Marist Institute for Public Opinion, which saw big differences in almost all facets of happiness between those who earn less than $50,000 and those who earn more.” Interesting.
Mr. Price’s announcement is 3 months old and the press has returned to report that it has not been all peaches and cream for Mr. Price personally or professionally. His brother, who is also the co-founder of Gravity, is suing for damages related to this change and some key employees have left over it feeling apparently that their own efforts weren’t being compensated enough with the raise to others. That’s a lot of pressure.
What struck me, among other things in this policy shift, was how the discussion of more money took on so much steam. As a Thriver it’s impossible not to notice that many believe more money, lots more money, equals lots more happiness. And yet, does it? We’ve explored happiness and in none of our previous looks at it has a large bank account been discussed! What prompts that? Because study after study tells us clearly that happiness is not tied to the balance in our account.
George Bradt, in Forbes May 2015, reports, “Happiness comes from choosing to be happy with whatever you do, strengthening your closest relationships and taking care of yourself physically, financially and emotionally.” Does any of this sound familiar?
How can money lead to happiness? According to a Harvard study in 2008 and published in the Harvard Gazette what really does it is spending money on others. In a study that mirrors what Harvard found we have this: “In a third experiment, researchers at UBC (University of British Columbia) handed envelopes of money to students on campus. The recipients were told they should spend the money (either $5 or $20) by the end of that day either on themselves — to cover a bill or expense or get themselves a gift — or on others, a gift for someone or a donation to charity. The results mirrored those from their other studies. “We found that people who spent the money on themselves that day weren’t happier that evening,” said Norton, “but people who spent it on others were. The amount of money, $5 or $20, didn’t matter at all. It was only how people spent it that made them happier.”
What does this mean for us? As a Thriver we have the capacity to make decisions about how and where we spend our money. Surely more financial resources allows anyone more options but let’s not confuse options with balance, happiness and thriving.
Need more help with this? While coaching is not free you might find the small investment in yourself paying off in larger ways down the line for yourself, those you love, those you lead and those you choose to have in your life.
So, paraphrasing Dr. Seuss, whether you make $250,000 a year or $45,000 I wish you all the best for your September!