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A Career Seeker’s Guide to Money and Meaning

money.JPGYou, my readers, have been flooding my inbox with questions about money, happiness, and career satisfaction. Here’s a small sample of the questions you’ve sent me within the last 4 days:

–How much money does a person need to be happy?
–Should I concentrate on following my dreams or getting rich?
–Will I enjoy a job even if it doesn’t pay me well?
–How do I choose between my dreams and my need to pay bills?

By the time you’re done reading this article, you should have a clearer picture of the complicated relationship between money, career satisfaction, and happiness so you can make better decisions in your own life.

How much money do you need to be happy?

If you’re a young person choosing a field of study (or a mid-life professional seeking change) who wants to know how much money to seek in a prospective career, my default answer is: at least a middle-class wage.

Earn enough to live independently and afford necessities, with enough left over for retirement and recreation. For a single person with no lofty standard of living to maintain, forty large is a decent target. Adjust as necessary for life circumstances and geographic area.

It’s possible to be happy with less (especially in a modern country), but earning at least a middle-class wage has several benefits:

1. The Middle Class Happiness Barrier: According to research, the jump in happiness between poverty and middle-class is one of the few clear-cut cases where happiness and income increase proportionately. Middle-class appears to be an important happiness benchmark because it allows a person to buy what society considers necessary, to live independently, and to compare favorably to others.
2. Income/Expense Equilibrium: People who earn enough to pay their bills report greater happiness than those who do not, further reinforcing the importance of a livable wage.
3. The Peer Effect: People who make substantially less than friends and associates report less happiness. We tend to compare ourselves to the people around us; if we don’t measure up, we’re less happy. A middle-class wage is usually enough to get us over this social hump, but it won’t be if we associate with the fabulously rich.

Although middle-class is an important happiness benchmark, research by Richard Easterlin suggests that your income has no bearing on your actual job satisfaction, which brings to mind an important question:

Should you follow your dreams or follow the cash?

And the short answer is both.

Some people choose a career based on earning potential with little regard for the work’s purpose, meaning or enjoyment — this is a huge mistake, since it leaves career satisfaction to blind luck.

Other people pursue meaning and purpose with no regard for income; this is also a mistake, since most people living in poverty end up obsessing about wealth. In other words, research has shown that people who don’t have enough money to satisfy basic needs tend to over-estimate the importance of wealth and to report lower levels of happiness.

Put more simply, long-term career satisfaction generally requires a livable wage, enjoyable tasks, and meaningful goals. Finding all these attributes in a single career is hard work, but the effort is worth it due to the sheer amount of time we spend at work and the fact that work is usually our primary means of contribution, both to ourselves and to the world at large.

Should you go out of your way to make more than a middle-class wage?

The short answer: probably not.

Judging from previous articles, some people probably think I’ve got some secret agenda against rich people. So please allow me to clarify: being rich is fantastic. If someone offered to drop 5 million dollars into my lap right now, no strings attached, I’d accept in a heartbeat. Wouldn’t you? After all, being rich has many advantages.

And yet, despite the many inarguable benefits of wealth, research has proven what your grandma already knew: money alone can’t buy happiness.

  • A person’s expectations adjust to his income so that at any given income bracket, he will wish he had 20% more. In other words, people who have more tend to want more.
  • Even lottery winners return to base happiness levels a few months after collecting their jackpot.
  • Once a person reaches middle class, career satisfaction and relationships supersede money as more reliable happiness benchmarks.

This doesn’t mean that money is bad; it’s not. It also doesn’t undermine the many benefits of wealth, which are real. It merely suggests that money has a diminishing margin of utility, and that other things (relationships, job satisfaction, time affluence) become more important than money once you’ve satisfied your basic needs.

If you have a plan to make a billion dollars while satisfying all these other important needs too, go for it! Otherwise, note what matters; prioritize accordingly.

Feel Free to Break the Rules

Everything I’ve said in this article is supported by research. But all the positive psychology research in the world doesn’t amount to a hill of beans if you’re highly motivated and know precisely what you want and why you want it. In other words, feel free to break the rules; just know why you’re doing it, and be aware of the risks.

Stay Determined

The conflict between dreams and bills is one that confronts many of you. I know because you tell me in the emails that you send me every week. And as you certainly know from my recent decision to re-enter the rat-race (described here, and here) while I pursue my dreams on the side, it’s a conflict that confronts me too.

Life happens. Obstacles abound. Life is full of hardship. But if I’ve learned one thing over the course of this summer, it’s that life is also full of hope. At the end of the day, all we can do is try our best to chase our dreams while balancing our economic realities. And if we keep trying, there’s no telling where our dreams might take us.

JohnPlace

16 Responses to “A Career Seeker’s Guide to Money and Meaning”

  • [...] Unfortunately, our train of wants never stops at a particular station. After a few times it start running for new destinations, and this is when we never feel satisfied. We always want to earn more, we always want to achieve more and frankly, there is nothing wrong in it. We should always pursue newer goals, but not at the cost of self-development. The moment you feel your pursuits are getting in the way of your personal peace and happiness, you should do a re-thinking and re-alignment. Life is unpredictable. You should enjoy life, you should feel life and you should value the presence of your near and dear ones around you. Nothing is worth losing the real meaning of life. John on his blog tells you how to strike a balance between money and meaning. [...]

  • SpiKe says:

    Interesting read, especially about the middle class happiness barrier which makes sense to me. I’ve always had fluctuating income since leaving university where one period I could comfortably buy a new console game or album, go out for meals, treat myself etc, then I would suddenly have to miss out on all those things, eat in all the time etc.

    SpiKe
    Organize IT

  • Jason says:

    A very good article… thank you, John.

  • ChrisR says:

    I think a lot of people misunderstand money, and exactly *why* it’s good, and why a lot of it can lead to happiness.

    What money should really represent is freedom. With enough money, one may go forth and do whatever his or her heart desires. The problem, as has been seen time and time again, is people lacking the ability to live within or below their means, and instead above them.

    By living above their means, many people today go into debt. Debt is one of the biggest problems we face as a nation in the U.S. these days. Even if you make 100k+ a year, if you spend over that for things you don’t need, you can still wind up in the red and actually be “poor”.

    On the other hand, if that money were instead invested, and those frivolous expenditures didn’t happen, that person could retire much earlier. At the very least, that person may have more time and more resources to accomplish the things that are truly important to him/her.

    So in the end, great wealth equates to freedom to fulfill one’s dreams. Alas, this only proscribes to the ones who can manage their money properly, though. In this sense, I would urge everyone to become Money Literate, and learn about financial topics that they can apply to their own lives.

    And for God’s sake, LIVE WITHIN (or even better, BELOW) YOUR MEANS PEOPLE!

    If everyone could just follow that rule in regards to finance, and possibly other things as well, the world would be a much better place.

    -ChrisR, writer o’ long posts ;)

  • JohnPlace says:

    Thanks for the comments, everyone.

    Chris: The relationship between “fabulous wealth” and happiness is complicated. Part of the complication is people living above their means (meaning I agree with you), but that’s just one drop in a very big bucket of reasons why money doesn’t buy happiness. And by the way, I like your big ol’ posts. Keep it up. :)

  • [...] Growth: John Place Online produced this Guide to Money and Meaning – a profound analysis of the realities of balancing dreams with necessities. It’s especially [...]

  • According to research carried out by Abbey Bank in the UK, happiness works out at less than £30 a day. That is the sum needed by all average British adults to pursue all leisure interests including holidays, eating out, cinema, clothing, gadgets and hobbies.

    How much do you spend?

    Andrew

  • JohnPlace says:

    Thanks for the comment, Andrew. Do you have a link to the Abbey Bank research? I’d love to read it.

    As it so happens, I’m looking for more research citing specific amounts of currency. I’m especially interested in studies that pertain to American dollars w/ geographic data, but the study you cited would be worth my time as well. There is a clear distinction in happiness between poverty and middle-class (that much is clear), but both poverty and middle-class have floating definitions, with both static and relative interpretations, both mattering a great deal (and for slightly different reasons). According to one source, lower-middle class starts at 35K and extends up to 75K, with the figure I cited in the article — 40K — being just 5K more generous than the entry.

    This definition of middle-class correlates well with all the happiness research. Here’s a quote from Penelope Trunk:

    “In fact, the rule is well established in research: The first $40,000 makes a big difference in one’s level of happiness. After that, the impact is much smaller. The difference between someone making $40,000 and someone making $15,000 is far greater than the difference between $100,000 and $1 million.”

    It also correlates well with my own experience.

  • JohnPlace says:

    Thank you very much, Andrew.

  • [...] Your Girl About Town wrote an interesting post today on A Career Seekers Guide to Money and MeaningHere’s a quick excerpt–How do I choose between my dreams and my need to pay bills? By the time you’re done reading this article, you should have a clearer picture of the complicated relationship between money, career satisfaction, and happiness so you can … [...]

  • [...] pay your electric bill, you’ve probably experienced the connection firsthand. Making at least a middle-class wage is a proven way to boost your happiness because it allows you to compare favorably to others and to [...]

  • [...] there is a professional, so the prices are “professional” too. Don’t worry about the money, though. You are about to have a surgery any saving $300 and risking some surgery complications [...]

  • cutey says:

    Go fuck your goddamn self….

  • gtunivers says:

    http://gtunivers.blogspot.com/

    Its nice article and very much true also….!!! Thnx… :-)

  • Precious Limas says:

    At 12, most ways of making money are closed to you. The only possibility I can think of is if you are handy with crafts, you can make something and sell it on line at Etsy.Com/ Check out etsy.com to see if it is something you could work with. You own your own business and it is free to list. But you have to create a product you can sell They take a commission on the sales but you list free.


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