Why Money make you “UNHAPPY”

Well this is a first, enjoy reading it. I am just going to the burn all my money now !

By Jonah Lehrer

Money is surprisingly bad at making us happy. Once we escape the trap of poverty, levels of wealth have an extremely modest
impact on levels of happiness, especially in developed countries. Even
worse, it appears that the richest nation in history – 21st century
America – is slowly getting less pleased with life. (Or as the
economists behind this recent analysis
concluded: “In the United States, the [psychological] well-being of
successive birth-cohorts has gradually fallen through time.”)

Needless to say, this data contradicts one of the central assumptions
of modern society, which is that more money equals more pleasure.
That’s why we work hard, fret about the stock market and save up for
that expensive dinner/watch/phone/car/condo. We’ve been led to believe
that dollars are delight in a fungible form.

But the statistical disconnect between money and happiness raises a
fascinating question: Why doesn’t money make us happy? One intriguing
answer comes from a new study by psychologists at the University of
Liege, published in Psychological Science. The scientists explore the “experience-stretching hypothesis,” an idea first proposed by Daniel Gilbert. He explains “experience-stretching” with the following anecdote:

I’ve played the guitar for years, and I get very little
pleasure from executing an endless repetition of three-chord blues. But
when I first learned to play as a teenager, I would sit upstairs in my
bedroom happily strumming those three chords until my parents banged on
the ceiling…Doesn’t it seem reasonable to invoke the
experience-stretching hypothesis and say that an experience that once
brought me pleasure no longer does? A man who is given a drink of water
after being lost in the Mojave Desert may at that moment rate his
happiness as eight. A year later, the same drink might induce him to
feel no better than a two.

What does experience-stretching have to do with money and happiness?
The Liege psychologists propose that, because money allows us to enjoy
the best things in life – we can stay at expensive hotels and eat
exquisite sushi and buy the nicest gadgets – we actually decrease our
ability to enjoy the mundane joys of everyday life. (Their list of such
pleasures includes ”sunny days, cold beers, and chocolate bars”.) And
since most of our joys are mundane – we can’t sleep at the Ritz every
night – our ability to splurge actually backfires. We try to treat
ourselves, but we end up spoiling ourselves.

The study itself is straightforward. The psychologists gathered 351
adult employees of the University of Liège, from custodial staff to
senior administrators, for an online survey. (I should note that it
remains unclear whether happiness and other aspects of well-being can be
meaningfully measured with a multiple choice test. So caveats apply.)
The scientists primed the subjects by showing them a stack of Euro bills
before asking them a bunch of questions which attempted to capture
their “savoring ability.” Here’s how the savoring test worked:

Participants are asked to imagine finishing an important
task (contentment), spending a romantic weekend away (joy), or
discovering an amazing waterfall while hiking (awe). Each scenario is
followed by eight possible reactions, including the four savoring
strategies referred to in the introduction (i.e., displaying positive
emotions, staying present, anticipating or reminiscing about the event,
and telling other people about the experience). Participants are
required to select the response or responses that best characterize what
their typical behavior in each situation would be, and receive 1 point
for each savoring strategy selected.

Interestingly, the scientists found that people in the wealth
condition – they’d been primed with all those Euros – had significantly
lower savoring scores. This suggests that simply looking at money makes
us less interested in relishing the minor pleasures of life.
Furthermore, subjects who made more money in real life – the scientists
asked all subjects for their monthly income – scored significantly lower
on the savoring test. A subsequent experiment duplicated this effect
among Canadian students, who spent less time savoring a chocolate bar
after being shown a picture of Canadian dollars. The psychologists end
on a bleak note:

Taken together, our findings provide evidence for the
provocative notion that having access to the best things in life may
actually undermine one’s ability to reap enjoyment from life’s small
pleasures. Our research demonstrates that a simple reminder of wealth
produces the same deleterious effects as actual wealth on an
individual’s ability to savor, suggesting that perceived access to
pleasurable experiences may be sufficient to impair everyday savoring.
In other words, one need not actually visit the pyramids of Egypt or
spend a week at the legendary Banff spas in Canada for one’s savoring
ability to be impaired—simply knowing that these peak experiences are
readily available may increase one’s tendency to take the small
pleasures of daily life for granted.

This makes me think of the Amish. From a certain perspective, the
Amish live without a lot of the stuff most of us consider essential.
They don’t use cars, reject the Internet, avoid the mall, and prefer a
quite permanence to hefty bank accounts. The end result, however, is a
happiness boom. When asked to rate their life satisfaction on a scale of
1 to 10, the Amish are as satisfied with their lives as members of the
Forbes 400. There are, of course, many ways to explain the contentment
of the Amish. (The community has strong ties, plenty of religious faith
and stable families, all of which reliably correlate with high levels of
well-being.) But I can’t help wonder if part of their happiness is
related to experience-stretching. They don’t fret about getting the
latest iPhone, or eating at the posh new restaurant, or buying the au
courant handbag. The end result, perhaps, is that the Amish are better
able to enjoy what really matters, which is all the stuff money can’t
buy.

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