Discover why true happiness stems from purpose and relationships rather than wealth or achievements.
The debate around whether money can buy happiness has been ongoing for years. Some argue persuasively that it can, while others strongly disagree. In this article, I’ll explore why I believe money alone can’t buy happiness and dive into some of the most influential studies on this topic. These studies suggest that purpose particularly “small p” purpose might hold the key to lasting happiness instead.
Research on Money and Happiness
The idea that money correlates with happiness has been studied extensively, with findings showing a complex relationship. Let’s take a closer look at three significant studies that have shaped this discussion.
The 2010 Study by Kahneman and Deaton
In 2010, Daniel Kahneman and Angus Deaton analyzed data from the Gallup Well-Being Index, which collected responses from 450,000 U.S. residents in 2008 and 2009. Participants were asked to reflect on their overall life satisfaction and emotional experiences. This was a retrospective study since the data had already been collected.
The researchers found that income did correlate with happiness, but only up to a certain point. Their findings suggested that happiness increased with income up to about $75,000 annually (adjusted for inflation, this figure would be higher today). Beyond that threshold, additional income didn’t significantly improve emotional well-being.
While the study provided valuable insights, it had its limitations. It only analyzed data over a short time span (one to two years) and relied on self-reported information. For these reasons, its conclusions should be interpreted cautiously.
The 2016 Study by Matthew Killingsworth
In 2016, Matthew Killingsworth carried out a new study using updated methods. He gathered data through an app called “Track Your Happiness,” which prompted participants to report their emotional state, activities, and surroundings multiple times a day in real-time. Like the Kahneman and Deaton study, this was also retrospective in nature.
Killingsworth’s findings echoed the earlier study: as income increased, so did happiness. However, his research suggested that even beyond the $75,000 threshold, additional wealth could still provide incremental gains in happiness—though not as dramatically as earlier income increases.
While this study used innovative data collection methods, it had its own limitations. It spanned only seven to eight years and couldn’t establish causation between income and happiness, only a correlation.
The Harvard Study of Adult Development
For a more comprehensive perspective, we turn to the Harvard Study of Adult Development, one of the longest-running and most in-depth studies on happiness. Unlike the previous studies, this was a prospective study, meaning it followed participants over decades, collecting data at regular intervals.
The study began in 1938 with 724 men, split between Harvard students and boys from disadvantaged neighborhoods in Boston. Over time, it expanded to include their spouses and children, eventually encompassing thousands of participants. Researchers conducted interviews, questionnaires, medical exams, and more, tracking participants for over 80 years.
The findings were striking. Happiness, they discovered, wasn’t strongly linked to income, wealth, achievements, or even purpose itself. Instead, it was most closely tied to social connections relationships and a sense of community.
Why Purpose Still Matters
You might wonder: if happiness is mainly connected to relationships, where does purpose fit in? I’ve written extensively about how purpose particularly “small p” purpose, or purpose rooted in everyday activities contributes to happiness, health, and longevity.
Here’s how the dots connect: when you pursue your “small p” purpose the activities that ignite your passion and give you a sense of fulfillment you naturally become the best version of yourself. This attracts others to you, building relationships and fostering a sense of community.
Purpose-driven individuals draw in like-minded people: collaborators, mentors, and students. They create networks centered on shared passions. In this way, purpose becomes the foundation for the connections that the Harvard study found to be essential for happiness.
Conclusion: Pursuing a Purposeful Community
To address the age-old question: I don’t believe money can buy happiness. While studies like those by Kahneman, Deaton, and Killingsworth show a link between wealth and happiness, they don’t prove causation. Additionally, their short-term, retrospective designs limit their scope.
The Harvard Study of Adult Development, on the other hand, provides a far more compelling conclusion. Over 80 years of research found that happiness is deeply rooted in social connections. And when you pursue your “small p” purpose, you naturally build those connections. Purpose-driven communities, then, may be the true secret to a fulfilling life.
Don’t chase money for happiness. Pursue your goals, and you'll find meaningful relationships and happiness along the way.