Money and Happiness in the Modern World—What Science Really Reveals

Learn to measure your net happiness as well as your net worth to live a truly wealthy life.

Jun 02, 2025

The Enduring Question: Can a Certain Amount of Money Buy Happiness?

You’ve heard the old sayings:

"Money won’t buy you happiness."
"Money may not buy happiness, but it will rent it for a while."
"Money isn’t everything—unless you don’t have any, and then it’s the only thing."

And honestly? They’re all true... sometimes. Over the years, I’ve chased money, found fulfillment, lost both, and regained balance again. For more than 25 years, I have set goals, pursued them, overcome adversity, accepted defeat, cherished victory, and ultimately grown from all of it, only to recognize that I have the desire to unlock more growth in myself, with the years I have left.

If you’re anything like me (and I know many of you are), you’ve probably wrestled with the same question: What’s the real connection between wealth, achievement, and happiness?

You may also be wondering if there are ways to actually measure happiness in the same way you can measure net worth. Today’s post will focus on ways to measure and manage the often more elusive asset class of happiness.

In this post, I want to take you on a journey to explore how happiness is measured (yes, it’s a science now), what research shows about the money-happiness connection, how our digital world messes with our heads, and most importantly, how you can create a wealth strategy that genuinely supports the life you want.

How Do We Actually Measure Happiness?

A. The Science of Subjective Well-Being

Believe it or not, psychologists have figured out how to measure happiness in a pretty legit way. They call it "subjective well-being," and it breaks down into things like:

How satisfied do you feel about your life overall
How often do you feel good or bad emotions
How deeply you feel a sense of purpose

There are tools—real ones, backed by decades of data:

Satisfaction With Life Scale (SWLS)
Oxford Happiness Questionnaire
Ryff’s Psychological Well-Being Scales
PANAS (Positive and Negative Affect Schedule)

I’ve taken a few myself, and let me tell you—it’s eye-opening. You start to see how your habits, relationships, and yes, money behaviors, all tie into your inner state.

B. How to Self-Assess

If you want to try this yourself (and I highly recommend it), here’s how I do it:

Pick a quiet morning, coffee in hand.
Pull up the SWLS (just Google it). (The one I took was here)
Answer honestly, not aspirationally.
Reflect, don’t judge. Use it as a compass, not a grade.

I like to repeat this every few months. It’s like checking the dashboard on a long road trip. You don’t want to wait until the tank’s empty (I am guilty of this, so no judgment if you do).

The Money-Happiness Relationship: What the Data Shows

A. The Logarithmic Curve

Here’s where it gets juicy. Remember Daniel Kahneman? Nobel Prize winner, behavioral economist, all-around mind-blower? Back in 2010, he and Angus Deaton found something big:

Happiness increases with income, but only up to a point.

That point was around $75,000 a year in the U.S. pre-Covid (though more recent data suggests it might be closer to $100K now). In certain States (like California or New York)this income number approached $250k. Beyond that, more money adds less and less happiness. Not none, but less, in the form of a diminishing net return on more happiness.

B. Beyond the Plateau

Fast-forward to 2021, and another researcher, Matthew Killingsworth, dug deeper. He found that happiness keeps rising with income... but only for people who are already reasonably happy.

So here’s the kicker: If you’re unhappy at $60K, getting to $600K might not solve it. But if you’re already content and intentional, a higher income can give you more options and freedom, which, used wisely, can boost joy. So, although money may not be the catalyst for happiness or misery, according to his work, money serves as a magnifier to both.

C. What Money Really Buys

Let’s be honest: money does buy some happiness. Here’s what it tends to buy best:

Freedom from daily stress: Medical bills, rent, groceries. This stuff matters.
Choice: The ability to say “no thanks” or “hell yes.”
Time: Outsourcing chores, skipping lines, and booking direct flights or flying private.
Experiences: The memories, the laughs, the moments that matter with the people you want to share them with.

But the key? How you use the money is more important than how much of it you have. More on that soon.

D. The Danger Zone

Here’s the trap many of us (especially entrepreneurs and high performers) fall into: chasing money for its own sake. The science backs this up. People who make money their primary life goal often report lower happiness, weaker relationships, and higher stress.

Ask yourself: Are you building wealth as a tool for your life, or trying to fill a void that will only be filled another way?

Digital Age Dynamics: How Online Triggers Mess With Our Heads

A. Algorithmic Emotion Hijacking

The digital world hijacks and distorts our perception of reality EVERY-SINGLE-DAY.

Social platforms are designed to trigger emotions: awe, envy, outrage, FOMO (fear of missing out). And we’ve all felt it—that weird, empty feeling after too much scrolling.

The problem? Our brains absorb this noise as real feedback about how we’re doing in life.

B. FOMO and the Comparison Trap

Nothing ruins gratitude like Instagram, TikTok, Facebook, or X.

When you constantly see curated highlight reels of other people’s lives—vacations, launches, six-pack abs—you start thinking you’re behind. Even if you’re not.

FOMO leads to:

Lower satisfaction
More anxiety
And ironically, more pointless spending to keep up appearances

C. Hustle Culture and Self-Optimization Overload

Wealth Matters readers, let’s be real: we’re the type of people who push. We optimize. We track. We set goals. You wouldn’t be reading this content if you weren’t a self-optimizer.

But this constant push to do more, be more, earn more can start to erode the joy we’re chasing in the first place.

Sometimes, enough is enough. Mastery comes not from never resting, but from knowing when to.

Practical Insights: How to Align Your Wealth With Happiness

A. Track What Actually Makes You Happy

Every few weeks, jot down:

What made me feel truly alive?
When did I feel drained?
What purchases gave me lasting joy?

Then cross-check it with “How am I spending my time and money? Do the two align? If not, tweak immediately.

B. Audit Your Digital Diet

Try this:

Do a 24-hour phone fast once a month.
Use screen time tools (or the nuclear option: grayscale mode).
Only follow people online who make you feel inspired, not insecure.

Your digital environment is part of your emotional ecosystem. Clean it up and manage it tightly.

C. Spend Like a Happy Person

Research shows happy people spend differently:

Experiences > Stuff: A good trip lasts forever in memory.
Generosity > Hoarding: Giving creates meaning.
Time > Status: Buying time lets you reclaim your life.

Here’s a tip to use: If you're going to spend money, ask, “Will this give me a story, connection, or freedom?” If yes, greenlight it.

D. Define Your Enough

This is BIG. We all have a number—a version of “enough.”

But most of us never write it down. We chase...and chase...and chase.

So try this:

Define what an “ideal enough life” looks like (income, hours worked, time with loved ones).
Then ask: How close am I already?

You might be nearer than you think. Focus on eliminating things that take you away from that target and double down on the activities, people, and pursuits that get you there.

The Big Picture: What Actually Makes Life Rich

If I’ve learned one thing on this journey, it’s this:

Money supports a good life, but it doesn’t define it.

The world’s longest happiness study (80+ years from Harvard) found that the single biggest factor in life satisfaction wasn’t wealth. It was deep, meaningful relationships.

Want to be rich?

Invest in your health.
Nurture your friendships.
Create work that feels like service.

That’s where the treasure is.

Revisiting the Clichés

Let’s give those old sayings their due:

“Money won’t buy happiness” — Mostly true. But it can buy freedom.
“Money rents happiness” — Yep. And sometimes that rental’s worth every penny.
“Money is everything if you have none” — Absolutely. Let’s never forget how brutal real scarcity can be. Survival mode in any form prioritizes our base-level needs over all other pursuits.