Why Earning More Money Will Never Make You Happy

Can money buy you happiness? In this video, I deep-dive into the science behind why money can't buy happiness and discuss how our relentless pursuit of money is sabotaging our mental wellbeing.
The science behind why simply earning more money will never make you happy:
"High income improves evaluation of life but not emotional well-being"
Daniel Kahneman and Angus Deaton 2010
www.pnas.org/c...
"Lottery winners and accident victims: is happiness relative?"
P Brickman, D Coates, R Janoff-Bulman 1978
pubmed.ncbi.nl...
Maslow's Hierarchy of Needs
www.simplypsyc...
The amount past which money ceases to make you happy will depend on where you live and the size of your family. But roughly this converts to:
*US $75,000
UK £40,000
London £55,000*
The point is not to fixate on what that figure is for you, but just to be mindful that you will, as some point, get to a position where earning more money will not have the same effects on your mental wellbeing as it did before. Being aware of this will allow you to then start to divert your efforts into areas of life that will actually help you and the people around you.
The hedonic treadmill, also known as *hedonic adaptation*, is the observed tendency of humans to quickly return to a relatively stable level of happiness despite major positive or negative events or life changes.
When I was a financial adviser, I worked with people earning thousands and some people earning millions a year. And I can tell you that money is not a predictor of happiness.
After a certain point, more money ceases to make us happy. This point is generally after we have enough money to satisfy our basic needs, as detailed in Maslows Hierarchy of needs. www.simplypsyc...
The actual monetary figure that you'd need to accomplish this will depend on where you live. But once you are earning enough, your efforts would be much better spent on building relationships and finding a true purpose in life.
However, money can buy you freedom, and it does this by allowing you to make choices. To choose where you live, or what job you do. To be able to see a doctor whenever you need to or get help looking after children. It definitely helps to make life easier and gives you more time to focus on the important things in life... or so you'd think.
But just as money can free you it can also become a trap. As people earn more and more, they become accustomed to the luxuries that they can afford. So much so that they are unable to give them up and end up spending more than they can afford or getting stuck in jobs that they hate. The classic case of Golden Handcuffs.
DISCLAIMER:
This channel is for education purposes only and does not constitute financial advice - James is not responsible for investment actions taken by viewers. Please seek out a regulated advisor if you require assistance (whilst James is a financial adviser, he does not provide advice through this KZbin Channel, which is not affiliated with his employer).
James Shack™ property of James Shackell
Copyright © James Shackell 2020. All rights reserved.
The author asserts their moral right under the Copyright, Designs and Patents Act 1988 to be identified as the author of this channel and any video published on it.

[@JamesShack]

Living in London, it's easy to get caught up in the rat race. The problem for me was that I didn't even realise I was running it. And unfortunately, it's not that easy to stop running, because most of these processes happen unconsciously. At the same time, we're being bombarded by advertisers selling us ideas that are not true, and things we do not need. I recently watched The Social Dilemma on Netflix, and it's clear that the problem is only getting worse. I'm keen to hear what you guys think?

[@ramansharma8585]

I was in London , part of the rat race , could'nt survive. Moved to Sheffield . Could nt survive. Moved to Swansea in Porthcawl . Found it Too Slow . I was totally out of tune , out of wits those times. Still not making money but yes 'Trying' without loosing grip on Happiness

[@hypermap]

On a financial advice KZbin channel this video is A* advice :) You have great perspective on the value of money - after all money is only trading tokens. My two penny's worth to add is: I think it’s important to distinguish between needs and wants. Once we have what we need: water, healthy food, warm shelter and since most of us are sociable animals: love - anything more than this should be fully appreciated as luxury. Remember we are only apes - really just sophisticated at language and better socialised chimpanzees :) Once we have what we need financially what matters more is our health as in our physical and mental wellbeing. Regarding our mental well being - as in our feeling of happiness and contentment with our lives - we should focus on appreciating what we have - for many our lifestyles - maybe basic compared to our contemporaries - are luxurious beyond measure compared to 99% of humans that ever lived - we should be happy with our lives. Once basic needs are being met if we’re not happy it is probably because we have allowed the advertisement and marketing industry (and perhaps our marketing influenced friends) to make us feel inadequate - after all the advertisement and marketing industry have to first make us feel inadequate with an aspect of our lives to then sell us the solution for this new feeling of inadequacy - which is comical if your think about it. So to feel happy, appreciate what you have, enjoy life and stop comparing* yourself with anyone - certainly don’t let business’s wish to make money interfere with your appreciation of what you have! - I would say avoid all advertising - I personally deliberately do - I pay for the ‘premium’ KZbin subscription just to avoid the advertising and almost never watch a commercial TV station - just watch the BBC over here which has no advertising - anyway btw I prefer KZbin to TV. [* Btw: comparing yourself to others really is a fool's game - there is always someone faster etc than you (unless your Usain Bolt) and others slower, so what - but unfortunately humans find it very easy to compare and feel proud if they are faster than someone and inadequate if they are slower than someone - so it just depends who your comparing with and what criteria - someone may be say apparently hugely richer than you but more naturally miserable or suffer health issues they would immediately give all their assets away to be relieved of or be in an abusive relationship they haven’t the cognitive ability to escape or actually be in huge debt and living on borrowed time etc… just don’t compare yourself with others - since you don’t have all the information. Anyway when you think it through it’s fundamentally nonsense to compare yourself - there will always be someone richer than you - unless you're Elon Musk and smarter - unless you're Elon Musk etc :) If you break the habit of comparing yourself with others then you're likely to be damn happier. Btw your quite possibly already happier than Elon Musk :) ]

[@JamesShack]

@@hypermap epic, thank you do much for the response. It seems like I’m preaching to the converted!

[@hypermap]

@@JamesShack Could be just confirmation bias; could be great minds think a like … whatever it’s good to express what you think :)

[@joshalward9803]

Please don't stop talking about it, James. This is important stuff and I'm enjoying your take on it. Looking forward to the next video.

[@JamesShack]

Cheers Josh, I certainly will!

[@ianh.6825]

There's a line in a Sheryl Crow song. "It's not having what you want, it's wanting what you've got."

[@christinabeckham9796]

This is the best video I have seen in a long long time, very inspiring! Well done getting this message out there!

[@Greylocks129]

Reminds me of when I was a student almost 40 years ago. It was considered decadent to go for tinned sweetcorn with peppers rather than simply tinned sweetcorn - all of an extra 1 pence! Fast forward to now - I can buy more or less anything I want. Am I happier now - nope. I would say try and find something / profession / job / hobby you are truly passionate about. It means more than money in the long term.

[@matthjas67]

One of the best comments on here.

[@maltesetony9030]

This video is worth its weight in gold, showing a level of understanding and empathy for the human condition very rarely found in investing advice videos. Stunning stuff.

[@JamesShack]

Thank you Tony! I’m glad you enjoyed it.

[@save9160]

This video should be broadcasted worldwide. Thank you James, I would sit here listening to you for days

[@grahamcurry7679]

Needs to be in the school curriculum. Get people interest ed early. Nobody talks about this stuff and negative media on financial industry scares people off. Most people don’t have lots of money and think it doesn’t apply. Your content is a different level but needs to go to millions as it could and should help so many people.

[@Ian61432]

This deserves to be viewed by millions! Fantastic content, so well researched with such a great message and so well produced. Can't wait to see what the future holds for this channel :)

[@JamesShack]

Cheers Ian!

[@Crazy_Ivan-UK]

Been on KZbin for many years and have only subscribed to about a dozen channels that I really like. James, you are my latest addition, very easy to watch videos and beautifully explained. Keep it up.

[@JamesShack]

Epic! Thanks Rick!

[@jonq-jinkuo1706]

I’ve watched quite a few of your investment videos. They are really good. But this one is definitely the most inspiring one!

[@chrismclean2989]

I always say “If you can’t be happy with nothing, nothing will make you happy…” 👍

[@JamesShack]

Yes indeed!

[@anantmehta123]

Bloody good advice, the whole world would benefit from this!

[@BoydKelly]

That was amazing! Impressive!

[@BeastProSHADOW]

Are you planning on giving UK based finance content specifics like S&S LISA v Cash LISA etc ? or are you thinking of doing more qualitative / philosophy of finance/investing style videos such as this one ? Some content on you and what the journey of a IFA is like would be really interesting to hear as well. Keep up the good content and high quality.

[@JamesShack]

Hi! I wanted to start of with content that’s accessible to a wider audience. But I will be doing much more in depth stuff too. I would also like to do some videos on career’s, how to get into finance, how to get into tech. If you’re interested in how to get into financial advice send me a dm and I’ll happy chat it through with you.

[@obinnaubah9045]

The last minute made me smile and sub. Cheers mate! (also here from UKPF).

[@rajmehta6210]

Very well presented James, keep up the good work. I work in the asset management industry and a lot of what you've touched on rings true

[@JamesShack]

Cheers Raj, thanks for watching!

[@douglasferguson5039]

Great video James, this is for my son and not me, you just said it better than I could !!!

[@JamesShack]

Epic! To be honest, it’s only since I’ve hit 30 that my priorities have changed. Up until that point I was all “where’s the money !!!!”. Hopefully he’ll like some of my other videos too!

[@martindimbleby1439]

Just found your channel James and so glad I did. You have a gift for explaining financial and non financial topic. Keep up the excellent work (if it makes you happy ;-)

[@JamesShack]

Glad to be of service!

[@ramansharma8585]

This TALK was just wow! , extremely diff to follow , but if I do i know i will be so much better off !

[@mariolaredodiaz7698]

This type of content together with more behavioural finance stuff would really make a difference. Thanks, James.

[@battj1]

That was mega, probably the best video I have watched - that good that I thought I would share this one on my FB 👏🙏👍! Almost a bit borderline, Conversations With God 🤔.

[@JamesShack]

Hi Jack - I'm really glad you enjoyed that! It was one of my first!

[@bla7091]

Great content, although I think that $75k figure needs some context. 1.) coming from a study that ran many years ago, there’s various levels of inflation that come into play and 2.) it’s region specific. I’m sure that in the Bay Area or London, this figure won’t get you very far with rent and other eckendes whereas on rural regions you’d live very comfortably. But the qualitative point about happiness still stands, albeit with a likely higher monetary value.

[@stuartogden1660]

Very true words

[@kassendek4777]

Luvly stuff

[@JamesShack]

Kassendek thanks!

[@DaKoolDude]

Subscribed

[@JamesShack]

Thanks

[@grandmasterflash213]

😂 great work❤

[@chrismclean2989]

If can’t be happy with nothing, nothing will make you happy

[@ireneGT0621]

Money cant buy happiness....poverty wont either for sure. 😁 be rich and miserable or be poor and miserable. Take your pick.

[@JamesShack]

Indeed!

[@paulthorpe766]

Spent a lot of time in Mumbai, and the happiest people I have ever met live in the shantytowns outside the cities and live on a few dollars a day !

[@maltesetony9030]

That is a false zero-sum. Better not to be miserable, surely?

[@suziekillingback9954]

Love this video ❤️

[@JamesShack]

Glad you liked it!

[@Conscious328]

James. Something is very wrong here. This video is so well done with an amazing message, you are missing a few hundred thousand views. Immediately get some social media help and get on the map. Your content is just too good to be hiding,. I subscribed and will send all my contacts too, Keep up the good work!

[@JamesShack]

Thank you very much! Unfortunately I’ve realised that I can’t just make content about the things I want to talk about, if I want to get anywhere with this. But this video is definitely the kind of stuff I want to talk about. I’ve been thinking about it recently, as I’ve realised KZbin is the physical manifestation of ‘the ladder’ - constantly striving for more views, more subs, but always feeling the same at each rung. I appreciate your kind words and will keep on creating!

[@Yyunm]

Great vid man, keep up the good work!

[@JamesShack]

Thanks! I appreciate the support!

[@eddied112]

Another great video, James - and a message that needs to be heard and repeated more often. This is probably the video people should watch first before delving into the other (great) videos on this channel. Keep up the good work.

[@bingbong3643]

Can you make a fire investing video that focuses on different age groups like 20, 30, 40? Recommend how to invest in such a plan and maybe look at how hard it would be to do making 40k, 60k, or 100k a year?

[@JamesShack]

Hi Chris, sure. That's definitely something i want to cover.

[@bingbong3643]

@@JamesShack Awesome. Looking forward to it.

[@iainreeve4522]

Brilliant video which deserves to be seen by many more people. I think we get addicted to the dopamine hit of buying stuff. There's a primitive part of our brains which is still hard-wired by evolution to push us to acquire goods that we only think we need. That was probably a useful instinct to have when we were living on the savannah chucking spears at antelope and gorging on berries when we found them. It's not such a useful instinct when we are being encouraged to buy, buy, buy by a marketing industry which is getting increasingly good at knowing how to push our buttons.

[@JamesShack]

Yes indeed. We’re only programmed to want more, and mentally it’s much easier to assume that you just need more (money, success, items) than it is to actually sit down and think what is enough and when to stop. I think this changes as you get older though. Since turning 30 my priorities have definitely shifted.

[@MrGdaddy12]

I have found every single one of your videos, that I have watched useful and insightful. But this is the BEST one yet. Excellent content.

[@JamesShack]

Thank you!

[@tran100hq]

I have watched many of your videos but only just came across this one and it just hit the spot. I cannot agree more with your insight and in fact has been practicing this mantra for many years. I am in a fortunate enough position now to have actually realised this dream and can only recommend other to consider the message within. For me personally, one phrase has been a guiding light for much of my last decade which is to be "rich enough not to be miserable but poor enough to be hsppy". Chasing the money is a fool's errand. Keep up the great work. You are one of the rare star on YT.

[@DiscoFang]

Thanks for directing me back to this video. Kinda foundational to your shtick. Came here from your How to Boost Your Stock Market Returns by 1.3% vid. 6 or so months subscriber, lovin' your work.

[@ChrisBeardSAP]

Is James' left eyebrow much bushier than his right eyebrow in this video? Probably a trick of the life.

[@vintfromby]

Love it!

[@cerronejames1510]

Great Video!

[@ftlikemike]

Thanks again James, talking from first hand experience here may be anecdotal but it's still evidence - based and I see exactly the same comparisons in work all the time. Health = Wealth ! ps I stayed to the end nevertheless😊

[@JamesShack]

It does indeed, although most people only realise this (or start taking it seriously) too late in life.

[@sergiuharjau731]

I loved this! What a great video

[@JamesShack]

I'm glad you liked it! One of my first!

[@maxflight777]

Compelling videos,and thoughts James.

[@OziBlokeTimG]

i love you James.

[@JamesShack]

You too tim!

[@pauljackson3096]

Your best yet James. It needs a bit more publicity. Recently dropped down to 4 day a week. My client are high net worth individuals. I sometimes think they would be happier to be in my shoes. I don't have their money, but they seem to like my life. The demands they have are a world away from my own.

[@ThePriceOfThings]

This last year I got a much better paying job and: bought a house to renovate with a big chunk more mortgage debt, bought a new car because I could, and spent all my savings that could have been invested. In the end its been the most stressful year ever and all my wife and I really care about is our new little boy. Its given a new perspective on wanting to find a lifestyle that gives us flexibility and doesn't tie us down to debt and repayments!

[@EnglishroG]

A really interesting and thoughtful presentation - thank you. It reminded me of John Lennon, who on one occasion was challenged for having egalitarian beliefs and yet being a multimillionaire. Lennon snorted and said "I'd rather be miserable in comfort."

[@Kalarandir]

Great stuff. It took me 10 years of misery in a better job with better pay to realise this. It was only after leaving that job did I even manage to start saving for a future I was now looking forward to.

[@progtom7585]

Gratitude, so important, great video

[@chqshaitan1]

Love the video, enough said :D

[@mohamedsaber9634]

Thanks so much James for your content and thanks for reminding us about the famous definition of credit card (well, credit in general): Using Money You Haven’t Earned To Buy Things You Don’t Need To Impress People You Don’t Like

[@JamesShack]

YEs indeed! Thanks for watching!

[@aliahmadi5829]

Incredible content James, found your post on UKPF and I’m currently binging all your videos

[@JamesShack]

Epic! Thanks for watch Ali!

[@mattsennett]

Really good James and so true. Becoming obsessed with chasing a dream can lead you to miss out on the journey. Sometimes we all need to sit back and enjoy the ride as even though it may not be in a Ferrari it sure beats walking!!

[@JamesShack]

Yes indeed. We need to keep reminding ourselves!

[@basmatibam]

Great video James

[@JamesShack]

🙌