Money does not make you happier

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Many people think: ‘If only I was richer, I would be happy.’

Not necessarily.

Canadians can be ambitious and chase the almighty dollar. But if you are looking for the magic formula to increase happiness, don’t count on that formula being more money.

We have known this for several decades.

In 1974, economist Richard Easterlin from the University of Pennsylvania published a paper measuring economic prosperity against happiness.  His findings showed industrialized countries had experienced phenomenal economic growth over the previous 50 years however the happiness of citizens did not change.

Money can buy many things. Money can’t buy happiness.

Perhaps it’s time for a reset. A time to rethink your priorities. Don’t pursue wealth for its sake alone, pursue happiness.

Princeton University researchers surveyed 1,000 people in 2010. Emotional well-being increased with a higher salary, but only up to $75,000 per year.

People always seem to want more. That seems to be human nature. We move to big cities to capture the high paying jobs.

Researchers from the Vancouver School of Economics and McGill University published a paper in the spring of 2018 reporting that Canadians living in large cities are less happy than those living in smaller communities.

I have a suggestion. Create a financial plan with only one purpose: to make you happy.

Where do you want to live, what occupation and therefore what income potential is there? How long do you want to work?

One of life’s realities is that we need money to provide a desired lifestyle. Now, rethink your happiness financial plan and add in some financial realities.

Perhaps you will have to make some adjustments on what a perfect life would be.

The key to this exercise is for you to start articulating what type of life is most important to you. Try not to make the mistake of just trying to make a higher income and accumulate more wealth.

Your financial plan should focus on the type of life you want to live.