Income is tied to happiness and hope for the future
Money can't buy happiness, but try being hopeful and broke at the same time.
25 September, 2020
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- A new study finds money alone doesn't make people happy, they need some hope for the future too.
- The study adds to the increasing pile of literature on the subject of how hope influences our wellbeing.
- The findings, particularly on when this effect doesn't work, may have implications for future policy decisions.
<p>While the adage that money can't buy happiness may be true, it has also been said that it can rent happiness for a long time. The scientific literature on the topic seems to bear this out, as studies show that more money tends to make people happier, but not always. How much people get out of the money can be extremely variable. </p><p>One surprisingly unstudied aspect of this is how our income and wellbeing relate to hope, specifically how people think the future will turn out for them. While it is known that people are more hopeful when things are going well for them and that how we perceive the future can dramatically impact our mood, no study has looked directly at the connection between income and hope.</p> Given that the connection between money and wellbeing is known to be positive but subject to various other factors, this missing data is particularly strange. Correcting for this, a new <a href="https://link.springer.com/article/10.1007/s10902-020-00309-6#Abs1" rel="noopener noreferrer" target="_blank">study</a> published in the aptly named <a href="https://www.springer.com/journal/10902" rel="noopener noreferrer" target="_blank"><em>Journal of Happiness Studies</em></a><em> </em>surveyed hundreds of Americans to determine if hope can buy the things money can't.
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Can you buy happiness? Maybe, not, but you can rent hope for the future.
<p>Five hundred fifteen American participants selected from the Prolific platform were involved in the study. However, many of them failed to answer all relevant questions over the three years of the study.</p><p>Participants were asked each year to fill out a questionnaire covering their income level, their life satisfaction, overall happiness, experiences of positive and negative emotions, and expectations on their future standard of living. They were contacted multiple times over three years to determine if changes in income impacted their levels of hope and life satisfaction. Their answers were then statistically analyzed for relationships. </p><p>To the surprise of nobody, those making more money tended to report higher levels of life satisfaction. Also, as expected, higher levels of income tied to higher levels of hope. Increases in hope were strongly and directly linked to improved levels of satisfaction, and the ability of statistical models to predict how happy a participant was more than doubled by adding in their levels of hope.</p><p>However, the effect didn't exist for those making less than $1800 a month; increases in income below that point didn't increase hopefulness much. It is worth noting that this is around the poverty line for a multi-person household with children at the time of the study. The authors speculate that "This might be explained by the (lack of) capabilities that an income below $1800 can offer," and note that many of their test subjects would fit into the category of multi-person households at that level. </p><p>It seems money can buy happiness, or at least hope, but that it is more expensive than many people can afford. </p><p>The study does have a few caveats. While the study's demographics were similar to that of the United States overall, there were points of significant departure. Notably, the median test taker made less than the median American, was more likely to be unreligious, and rated their overall happiness slightly lower than other tests show Americans tend to do. While these differences may not prove substantial, the mentioned findings held up across all demographics involved in the survey; they may temper claims of how universal the results are.</p><p>The authors themselves admit that casualty cannot be inferred from these findings. It might be the case that a higher income causes people to be hopeful, which, in turn, improves their level of life satisfaction, or it could be that the causation runs the other way- with optimistic people making more money as a result of their already being hopeful.</p><p>In any situation, hope does mediate the relationship between income and life satisfaction. While perhaps intuitive, this finding will advance the literature on the subject and has many practical applications.</p>I hope this study has some practical takeaways I can use.
<iframe width="730" height="430" src="https://www.youtube.com/embed/JyzoIYqmzMQ" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture" allowfullscreen></iframe><p>This study provides further evidence that while having at least enough money to get by on is necessary for happiness, it is not having piles of money alone that makes people happy. It appears that it is what people can do, or at least believe they can do, as a result of having more money that actually increases their wellbeing. People looking to improve their outlook on life might do well to remember this.</p><p>The authors also suggest that there are policy implications in these findings. They conclude their study by pointing out:</p><p><em>"Our findings signal that policy aimed at increasing wellbeing through higher wages should take into account that the stability of income matters, and that only over a certain threshold income can offer enough possibilities to invest in a better future and as such create more hopeful and happy lives."</em></p><p>That is, since the hope, income, and satisfaction relation only kicked in above a certain income level, any policy geared towards improving people's lives will have to focus on getting them above that level to see lasting effects. </p><p>The findings of this study suggest that having enough money to stay above water can make people happier and that the more of it they have the better they think the future will be. While this means that money can't buy happiness, it does mean that it is associated with thinking you'll be happy someday. In the end, that might be close enough. <em><br> <br> <br></em></p>
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Personal finance: How to save, spend, and think rationally about money
Finances can be a stressor, regardless of tax bracket. Here are tips for making better money decisions.
23 September, 2020
- Whether you have a lot of money or a lot of debt, it matters how you handle your personal finances. A crucial step when it comes to saving is to reassess your relationship with money and to learn to adopt a broader, more logical point of view.
- In this video, social innovator and activist Vicki Robin, psychologist Daniel Kahneman, Harvard Business School professor Michael Norton, and author Bruce Feiler offer advice on achieving financial independence, learning to control your emotions, spending smarter, and teaching children about money.
- It all starts with education and understanding. The more you know about how money works, the better you will be at avoiding mistakes and the easier it will be to take control of your financial circumstances.
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Venture investors need to invest in Black-owned businesses
Less than 1% of all venture capital funding in the US is given to Black entrepreneurs. Now is the time for that to change.
08 September, 2020
Credit: Big Think
- Abner Mason, CEO and founder of health care startup ConsejoSano, is calling for all venture capital firms in the United States to pledge to invest 13% of their funds in African American businesses.
- Currently, Black entrepreneurs receive less than 1% of all venture capital funding.
- The 13% target reflects the percentage of Black Americans and is a nod to the 13th Amendment.
<p>The murder of George Floyd has brought America to a much-needed reckoning on the racism in American society. Young people are marching, white people are reading, and churches are preaching about ways we as people can transform the way we treat Black people. Notably, many business leaders are pledging to end racism. But once the marching ends what will be different in America?</p><p>As a Black business leader, this newfound desire to address America's original sin is a breath of fresh air in the midst of this pandemic. But I wonder how long this new zeal to change will last and, more importantly, what practical steps and sacrifices will be made to make the promise to end racism real.</p><p>Here is one practical solution that all investors can take to make their promise real. I'm calling on all venture capital firms in the United States to pledge now to invest 13% of their funds in African American businesses. I suggest 13 as a target to both reflect the percentage of Black Americans and a nod to the 13th Amendment. I'm reaching out to friends in the social impact space to help me set up the organization that will monitor this.</p>
<blockquote>Here is one practical solution that all investors can take to make their promise real. I'm calling on all venture capital firms in the United States to pledge now to invest 13% of their funds in African American businesses. </blockquote>
<p>My life reflects both America at its best in terms of ending racism and at its worst.<br></p><p>As an African American CEO of the health care startup <a href="https://consejosano.com/" target="_blank">ConsejoSano</a>, I've focused on using technology to connect low-income and multi-cultural people to care in our health care system where their needs are often overlooked. Also, I've lived a blessed life. I grew up in an integrated public school in North Carolina where my parents and church taught me never to judge a book by its cover. They taught me that not all white people were motivated by racism and to seek out white allies in my life path.</p><p>This advice paid off. I found my way out of NC to a prep school in New England where I was one of seven Black students out of three hundred. I then made my way to Harvard College where Black students were less than five percent of my freshman class of thousands. I faced a choice that most young Black men of my generation made: Will I define myself solely by my race or pretty much ignore my race, ignoring racists, and look for allies? I chose the allies path. </p><p>After a short stint in the management consulting field, I found myself working in state government in the MA Department of Transportation where I learned a powerful truth about life—good intentions are not enough. No one cared that we had good intentions to get buses to passengers, we had to get the buses out to waiting passengers. Visible results, not intentions mattered. This lesson speaks to me today when I consider America's response to racism.</p><p>I went on to advise three governors and launched a nonprofit to address the AIDS crisis in Africa, helping to created what later would be called the PEPFAR program. What I learned through this entire career path was that I could pretty much sense and ignore racists and seek good white people at every level. These were my survival techniques.</p>
<p>This strategy hit a wall when I entered the venture capital arena launching a health tech company where I was asking wealthy white men to invest in the leadership of a Black man. In the more than 40 pitches I made to create our Series A, I encountered 99% white male investors who were blunt saying they were not investing in my product or projections; they would be investing in me. I could no longer follow my life strategy of ignoring investors with racist views. I was pitching the 1% of the 1% who lived lifestyles and had social worlds completely different from my own. We both could sense the cultural and lifestyle disconnect. Following my pitches I heard comments such as, 'I'm not comfortable with you being in charge,' or 'I'd imagine you being good at sales,' or 'Let's keep you as Chief Evangelist or something like that.'</p><p>What became clear to me was that uber-wealthy white men could imagine a Black leader as a minister not as a CEO. In my conversations with other Black startup leaders, I realized I was not alone. Then I looked at the data which confirmed my experience. I found <a href="https://hbr.org/2020/06/a-vcs-guide-to-investing-in-black-founders" target="_blank">only 1%</a> of venture capital-funded startup founders are Black. Ultimately, I did find investors who believed in me and my product and I was successful in gaining my Series A through white male investors who cared.</p><p>Today, I'm no longer a young Black man navigating the corridors of white power, but even as a successful entrepreneur I'm still facing the greatest degree of discrimination I've ever encountered in my life. Corporations posting 'Black Lives Matter' is nice, but as I learned in my job in transportation, the young Black entrepreneurs can no longer praise good intentions. They need results.</p><p>If America is serious about the desire to end racism, Black Americans are going to have to follow the lead of Langston Hughes who famously said, "I will not take 'but' for an answer."</p>
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How can we design schools to be anti-racist?
From reassessing the way schools are funded to changing the curriculum, there are ways to fix the inequities in education.
02 September, 2020
- Recognizing when something is overtly racist is easy, but when it comes to education in America there is often subtle and systemic racism at play that can put children at an early disadvantage. Chris Lehman of the Science Leadership Academy says that now is the time to have these important conversations and to design schools to be anti-racist.
- Lehman says that in Philadelphia, the amount of money spent on one child's K-12 education can be $170,000 less than that of another child who lives in the suburb just a block away. These racist systems and structures are in place in cities across the country but are often not addressed.
- Family income directly translates to the amount spent by the public to educate children. "That's one of the most anti-American things I can imagine," Lehman says about the racial and socioeconomic inequity. While funding is a major component, changes must also be made at the curriculum level.
<p><em>This video is part of <a href="https://z17.global/" target="_blank">Z 17 Collective</a>'s <a href="https://bigthink.com/future-of-learning/" rel="dofollow" target="_self">Future of Learning</a> series, which asks education thought leaders what learning can and should look like in the midst and wake of the coronavirus pandemic.</em></p><p class="shortcode-media shortcode-media-rebelmouse-image">
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Why the simple life is not just beautiful, it’s necessary
Living simply now strikes many people as simply boring.
31 August, 2020
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The good life is the simple life. Among philosophical ideas about how we should live, this one is a hardy perennial; from Socrates to Thoreau, from the Buddha to Wendell Berry, thinkers have been peddling it for more than two millennia.
<p> And it still has plenty of adherents. Magazines such as <em>Real Simple</em> call out to us from the supermarket checkout; Oprah Winfrey regularly interviews fans of simple living such as Jack Kornfield, a teacher of Buddhist mindfulness; the Slow Movement, which advocates a return to pre-industrial basics, attracts followers across continents.</p><p>Through much of human history, frugal simplicity was not a choice but a necessity – and since necessary, it was also deemed a moral virtue. But with the advent of industrial capitalism and a consumer society, a system arose that was committed to relentless growth, and with it grew a population (aka 'the market') that was enabled and encouraged to buy lots of stuff that, by traditional standards, was surplus to requirements. As a result, there's a disconnect between the traditional values we have inherited and the consumerist imperatives instilled in us by contemporary culture.</p><p>In pre-modern times, the discrepancy between what the philosophers advised and how people lived was not so great. Wealth provided security, but even for the rich wealth was flimsy protection against misfortunes such as war, famine, disease, injustice and the disfavour of tyrants. The Stoic philosopher Seneca, one of the richest men in Rome, still ended up being sentenced to death by Nero. As for the vast majority – slaves, serfs, peasants and labourers – there was virtually no prospect of accumulating even modest wealth.</p>
<p>Before the advent of machine-based agriculture, representative democracy, civil rights, antibiotics and aspirin, just making it through a long life without too much suffering counted as doing pretty well. Today, though, at least in prosperous societies, people want and expect (and can usually have) a good deal more. Living simply now strikes many people as simply boring.</p><p>Yet there seems to be growing interest, especially among millennials, in rediscovering the benefits of simple living. Some of this might reflect a kind of nostalgia for the pre-industrial or pre-consumerist world, and also sympathy for the moral argument that says that living in a simple manner makes you a better person, by building desirable traits such as frugality, resilience and independence – or a happier person, by promoting peace of mind and good health, and keeping you close to nature.</p><p>These are plausible arguments. Yet in spite of the official respect their teachings command, the sages have proved remarkably unpersuasive. Millions of us continue to rush around getting and spending, buying lottery tickets, working long hours, racking up debt, and striving 24/7 to climb the greasy pole. Why is this?</p>
<p>One obvious answer is good old-fashioned hypocrisy. We applaud the frugal philosophy while ignoring its precepts in our day-to-day lives. We praise the simple lifestyle of, say, Pope Francis, seeing it as a sign of his moral integrity, while also hoping for and cheering on economic growth driven, in large part, by a demand for bigger houses, fancier cars and other luxury goods.</p><p>But the problem isn't just that our practice conflicts with our professed beliefs. Our <em>thinking</em> about simplicity and luxury, frugality and extravagance, is fundamentally inconsistent. We condemn extravagance that is wasteful or tasteless and yet we tout monuments of past extravagance, such as the Forbidden City in Beijing or the palace at Versailles, as highly admirable. The truth is that much of what we call 'culture' is fuelled by forms of extravagance.</p><p>Somewhat paradoxically, then, the case for living simply was most persuasive when most people had little choice but to live that way. The traditional arguments for simple living in effect rationalise a necessity. But the same arguments have less purchase when the life of frugal simplicity is a choice, one way of living among many. Then the philosophy of frugality becomes a hard sell.</p>
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That might be about to change, under the influence of two factors: economics and environmentalism. When recession strikes, as it has done recently (revealing inherent instabilities in an economic system committed to unending growth) millions of people suddenly find themselves in circumstances where frugality once again becomes a necessity, and the value of its associated virtues is rediscovered.
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In societies such as the United States, we are currently witnessing a tendency for capitalism to stretch the distance between the 'have lots' and the 'have nots'. These growing inequalities invite a fresh critique of extravagance and waste. When so many people live below the poverty line, there is something unseemly about in-your-face displays of opulence and luxury. Moreover, the lopsided distribution of wealth also represents a lost opportunity. According to Epicurus and the other sages of simplicity, one can live perfectly well, provided certain basic needs are satisfied – a view endorsed in modern times by the psychologist Abraham Maslow's '<a href="http://psychclassics.yorku.ca/Maslow/motivation.htm" target="_blank">hierarchy of needs</a>'. If correct, it's an argument for using surplus wealth to ensure that everyone has basics such as food, housing, healthcare, education, utilities and public transport – at low cost, rather than allowing it to be funnelled into a few private pockets.
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However wise the sages, it would not have occurred to Socrates or Epicurus to argue for the simple life in terms of environmentalism. Two centuries of industrialisation, population growth and frenzied economic activity has bequeathed us smog; polluted lakes, rivers and oceans; toxic waste; soil erosion; deforestation; extinction of plant and animal species, and global warming. The philosophy of frugal simplicity expresses values and advocates a lifestyle that might be our best hope for reversing these trends and preserving our planet's fragile ecosystems.
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Many people are still unconvinced by this. But if our current methods of making, getting, spending and discarding prove unsustainable, then there could come a time – and it might come quite soon – when we are forced towards simplicity. In which case, a venerable tradition will turn out to contain the philosophy of the future.
</p><p><a href="https://press.princeton.edu/titles/10821.html"><em>The Wisdom of Frugality</em></a><em> (2016) by Emrys Westacott is published via Princeton University Press.</em><img src="https://metrics.aeon.co/count/839ab61b-7b15-4daf-8af3-a1c7ead64c41.gif" alt="Aeon counter – do not remove" width="1" height="1"></p><p>This article was originally published at <a href="https://aeon.co?utm_campaign=republished-article" target="_blank">Aeon</a> and has been republished under Creative Commons. Read the <a href="https://aeon.co/ideas/why-the-simple-life-is-not-just-beautiful-it-s-necessary" target="_blank">original article</a>.</p>
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