Advertisements are constantly telling us that to be happy, we have to have lots of stuff. Here at GlowingFaceLabs, we never take anything for granted, so we did some investigations into the true relationship between happiness and material success. This research was funded by a grant from the National Science Foundation. (Yeah right. I wish.)
I’ve discovered there are two types of happiness. Outer and inner happiness. Inner happiness has no relation with material success, so I won’t include it in the main discussion today. Just keep in mind that in addition to the happiness I talk about below, there’s a certain amount of additional “inner happiness”, which varies from person to person.
THE THOUGHT EXPERIMENT
Here’s a thought experiment. Smith is destitute, he has no money to his name and debtors are harassing him to pay bills. He’s on the verge of homelessness. George was born into a super wealthy family and inherited a hundred million dollars.
One day, Smith finds a lottery ticket in the street, picks it up, and it turns out he just won a million dollars. He pays off all his debts, gets some pimpin wheels, upgrades his wardrobe, and moves into a sweet pad in southern California.
On the same day, George’s stocks take a nosedive, due to the economic fallout from the burst real estate market. George loses ninety percent of his assets. He’s left a hollow shell of his former self, with a mere ten million dollars to his name. His golddigger wife leaves him for an up and coming Republican congressman.
Now which man is happier? Obviously, Smith, the man who started poor and won a million dollars, is happier. George, who went from hundred-millionaire to mere ten-millionaire, is miserable.
The story illustrates the true nature of the relationship between happiness and material success. Outer happiness is related to material success, but not in the simplistic “more is more” way that people tend to think.
THE REAL RELATIONSHIP
The real relationship between material success, and (outer) happiness: the happiness depends not on the amount of material success, but on the percentage rate of change of the material success. That means, when material success goes up, (outer) happiness goes up. When material success plummets, (outer) happiness plummets. The actual amounts involved, isn’t that important.
The actual amount of wealth does factor in, in that it changes the percents. If a billionaire gains a thousand dollars, it’ll be such a drop in the bucket it’ll have almost no impact on happiness. The same thousand dollars would thrill a struggling family, though. That’s why I put the “percentage” in “percentage rate of change”.
THIS EXPLAINS SOME THINGS…
Blaise Pascal, a French theologian in the 1600′s, noticed that, left to themselves, humans tend to be discontent. Unenlightened humans are always pursuing bigger and better things, regardless how big and good their current things are. One component of this is security. Unless a man breaks the programming, by default he is programmed to worry about his safety and security; it doesn’t matter whether the worries are legitimate. Men with hundreds of millions to their name can still feel insecure, ever worried that they could lose it all.
This is easily explained using the True Relationship between Happiness and Wealth. A man makes his fortune, and gains a temporary boost of (outer) happiness. Once this fades, he’s left no happier than he was before. He might be more comfortable than before, but comfort and happiness are different things. To keep up the happiness, he’s forced to pursue more and more wealth.
TAKING IT TO THE LOGICAL LIMIT
Critics of the True Relation would argue against it by taking it to its logical extreme: according to the True Relation, the best way to get a big burst of happiness, would be to give away all one’s material possessions and then quickly get a new paycheck. The new paycheck would represent a massive increase in wealth (since you’ve given away everything but the clothes on your back), so happiness would go through the roof, critics say. Which is silly, of course.
I’d argue that if you have a paycheck coming, it pretty much already counts as yours. I mean, here’s another thought experiment. Who’s wealthier, a man with no money in the bank, but a paycheck coming tomorrow? Or a man with a million dollars in the bank, but he’s hiking in the middle of nowhere and it’ll take him a week to get back to civilization?
Anyway, when taking the Relation to its extremes, you have to remember that there’s inner happiness as well. Inner happiness is based on things like confidence in oneself, not on wealth. It’s a more permanent joy, and it messes up calculations when we consider extreme scenarios like people giving away all their worldly possessions.
ONE LAST THING…
So far I’ve been emphasizing how material wealth creates happiness. It works the other way too. People who are happier tend to be more successful, that is, their happiness is actually a direct factor in creating their success. Happiness means motivation. It means being so psyched about the things you do, that your body literally needs less sleep. Happy people are more attractive and sexy, and so society is literally biased in their favor.
Here are some other articles I’ve written. Your happiness is directly related to how many of them you read. 
Beware of “Over-Justifying” in Finances and Life
Real Life Tool-Assisted Speedrun?
Short Story: The Mirror