Researchers have long explored the question of whether greater wealth “buys” greater happiness. A widely publicized study from 2010 seemed to indicate that increases in happiness, based on financial means, plateaued at an annual income level of $75,000. Yet new research published in 2021 indicates that a sense of well-being and life satisfaction may continue to rise with income levels above this threshold.
A key question raised by studies like this is how any one person defines well-being. Sometimes extra luxuries may not in and of themselves provide measurable added happiness. (Economists would say that the marginal utility of wealth itself can decline even as it grows.) Becoming and being “rich” is often rooted in the depth of our social communities, how intertwined we feel in meaningful ways with others, and our ability to spend time doing what makes us happy.
The research findings linking financial stability to well-being resonate with one potential element of “richness”: peace of mind. Adopting a longer-term investment strategy and mindset can free individuals from day-to-day worries about how financial markets are behaving in the short-term. This can allow them more time to focus on the areas of their lives that are the most rewarding.
Ultimately life is a tapestry of people, possessions, experiences and so much more. Much of life’s richness can be experienced by taking the space needed to explore its many threads. Each person has a choice in how they weave those threads together – investing their time, attention and resources to bring greater joy and fulfillment to themselves and others.
In addition to thinking for the long-term, there are numerous ways that we at Two Point Capital Management take time to explore richness in our own lives. While no choice is objectively better than another, these simple steps can bring a wealth all their own:
Offering time and resources to others: It is remarkable how helping another person can improve one’s sense of well-being. According to a 2017 study published in Nature Communications, researchers found that providing resources to someone else lifted participants’ happiness more than personal spending. Giving to others can also include time and talent. The key is finding connection with people and issues that authentically move and motivate you as an individual.
Seeking balance: The last year-and-a-half has underscored the importance of balance. Grappling with the impact of the pandemic and lockdowns reminded us all of the importance of finding time for ourselves and the people we care about. Many are also reconsidering technology habits, reflecting on what a healthier work-life balance might look like and prioritizing mental and emotional well-being.
Being outside and active: Taking a hike or being surrounded by nature can have an astonishingly positive impact on mood and happiness. So, for many, a rich life includes making more time to be outside, ideally with others, or to focus on building a more active lifestyle.
What does richness in your life mean to you? The choice is always personal.
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