Anyone who tells you that money isn’t important is either delusional or has so much money they’ve become blind to how important it actually is. That said, above a certain amount—between 75K and 100K with adjustments in both directions for geography, according to research conducted by the Nobel Prize winning psychologist Daniel Kahneman—additional money is not associated with additional happiness or wellbeing. Getting to that minimum threshold of income is crucially important, but beyond that, money just doesn’t matter all that much.
People are motivated to meet their basic needs. Stuff like housing, food, and healthcare. You need money, at least in most western countries, to attain those things. But once you’ve got them, the calculus changes. Nothing external, no number of bright and shiny objects, will bring you happiness or wellbeing. What will—autonomy, mastery, and belonging—is more of an inside and social job.
The paradox here is that while many of the lowest paying jobs generally don’t offer these attributes (let alone enough income to meet one’s basic needs) neither do many of the highest paying jobs. Lots of middle managers, folks in professional services, and even executives feel like they are constantly responding to events around them (no autonomy); stuck in an ambiguous game of corporate or government bureaucracy and politics (no discernible mastery); and are so busy responding to the aforementioned events around them and playing the ambiguous game that they have no time to cultivate genuine community, in work our outside of it (belonging).
Here is the inventor Nikola Tesla, on what actually makes people tick:
“I do not think there is any thrill that can go through the human heart like that felt by the inventor as he sees some creation of the brain unfolding to success…such emotions can make a man forget food, sleep, friends, love, everything.”
(I’d argue to keep the food, sleep, friends, and love; but you get the point.)
The implications of this are manifold. If I had a magic wand to change society I’d save it and the following would happen: At the bottom of the salary ladder, pay people enough to meet their basic needs and also improve their working conditions so their internal and social needs could be better met too. At the top of the salary ladder, pay people less, but cutback on all the bullshit parts of their jobs—which research shows is nearly 50 percent of all work!—so they can have more autonomy, mastery, and belonging. If there isn’t autonomy, mastery, and belonging at work that’s fine too, but then perhaps work should be 15 to 20 hours of the week and the rest of the time could be used to create and engage in community. (It’s amazing how much time can be saved by cutting back on all the bullshit; I know some of you don’t like when I swear but I’m using the scholarly term here.)
Unfortunately, I don’t have that magic wand. Yet I am guessing that most people who read The Growth Equation’s stuff are not working at the bottom of the income ladder. So, to you, my advice would be the following: Remember that in the short-term a raise or a bigger house or a fancier car will feel really good. But in the long-term it may just trap you in a job (and a lifestyle) that pays a lot but crushes your soul. Think long and hard about career decisions. Once you are above Kahneman’s certain threshold income the question I’d ask is: “Does this move increase or decrease my autonomy, mastery, and belonging?”