Money and happiness: Are you earning too much money?

by Peter Crocker

What is the relationship between money and happiness? I recall research from a few years ago that found that at all income levels, people say they would be satisfied if they could get 20% more.

If our goal is always ‘more’, then we’re destined to spend our careers striving for that elusive extra 20%.

But what if you had a specific goal in mind? What income level would you be satisfied with? And how much are you prepared to sacrifice to get it? The mission then becomes finding the most efficient and satisfying way to generate the income you need, and no more.

If you thrive on relentless work and like the notion of wealth for wealth’s sake, then by all means go for it. But if you don’t, how much time and effort are you prepared to sacrifice to pursue it?

Nothing comes free. Big incomes extract their pound of flesh, and increasing income delivers a diminishing rate of return. After a certain income threshold is reached, more money actually makes very little difference.

In fact, a 2009 survey by the Australian Council of Trade Unions of 2,800 workers found that 75% would be happy to take a pay cut to work fewer hours. It seems more time is what people truly want.

I was mid-draft of this article when I read this inspiring thread in the forums answering the question “Would you start a business if you knew you’d earn less?” I thought Ray summed it up beautifully in his response:

“A good income will not make you happy if you don’t like your job. Not having enough money to live on will make it impossible to be happy. If you can fit somewhere in between you should be very happy.”

Unlike most employees, business owners do have the flexibility to shape their hours and incomes.

For more on this topic downlaod Julia Bickerstaff’s presentation at Flying Solo LIVE! on how to design a profitable business.

It may sound idealistic, but there are thousands of stressed-out execs and business owners earning six figure incomes with no off switch in the pursuit of more – more status, more money and bigger lifestyles.

I admire people who have managed to create the freedom to spend their time how they like, and with who they like. That time might well be spent working, but it might also be spent travelling or doing community work. Success = having the option.

Okay, so I’m a long time off hitting the Bahamas. Maybe if I had 2000% more!

Will you know when enough’s enough? Or does setting a limit show a lack of ambition? Have your say on the relationship between money and happiness.

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