In the midst of a recession, where money is tight, it’s important to remember that wealth does not equal emotional happiness. However, it cannot be denied that there is a certain numerical amount needed to deal with the necessities of day to day life. Indeed, having a wedge of cash stashed away in your
savings account will always leave you safe and confident in the knowledge that you’ll always be able to financially cope, no matter what life throws at you.
In a massive research project undertaken in the U.S. by the National Academy of Sciences, they have come to a consensus on how much monetary income is required to feel comfortable: The figure is in the region of $75,000 (Just under £50,000)
The research compiled by Daniel Kahneman and Angus Deaton consists of over 450,000 responses, randomly selected from US residents. Each caller was asked a variety of questions about their financial status including questions based on day to day activities, expenses and debts. Callers were also asked about their personal banking practices, including questions about how they manage their
current accounts.
The residents taking part in the survey were asked to rate various aspects of their life on a scale of zero to ten to measure their general happiness and emotional stability. A number of questions were used to directly determine the amount of stress the caller experienced both at home and at work.
The results were obvious to begin with. General happiness increased steadily with annual income, but began to show a trend, a curbing point were wealth stops becoming a benefit and even becomes a detriment to ones emotional happiness. According to the study the quality of the respondents' everyday experiences did not improve above an income of $75,000 a year.
The same is true of the downward scale. According to the research worries and stress increase as income decreases, again no real surprise there. The results also focus on the points that most closely relate to emotional burdens and shocking or painful events, such as death, disease, divorce, seclusion, which are exacerbated by poverty or lack or socialised services.
It’s important to remember though, that this research is not the be all, end all, answer. There is no claim here that your emotional burdens or problems will be magically absolved once you begin to make $75,000 a year.
The primary discovery is that income, or lack of, is much more of an emotional ordeal for those under the 75k threshold, as they might not have the financial capability to deal with everything life throws at them, leading to stress, worry, and feelings of helplessness. While those who make over $75,000 will find their emotions less swayed by how much money they make.
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