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Can having too much money really make you miserable?

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50 Cent has been hit by the credit crunch. Photo: Getty Images

50 Cent has been hit by the credit crunch. Photo: Getty Images

50 Cent has been hit by the credit crunch. Photo: Getty Images

For those of us not rolling in it, the idiom that money can't buy happiness brings a certain comfort. But the notion that riches can make you actively unhappy? Would that we could all test that theory.

An Austrian multi-millionaire has done just that -- and claims his fat bank balance made him miserable. Karl Radeber has sold all his worldly possessions: his home; his luxury cars; his collection of glider planes; his €4m interior furnishings business -- and donated the proceeds to charity.

The process has left him feeling "free, the opposite of heavy", he says. "Money is counter-productive -- it prevents happiness to come."

Radeber is no bored trust-fund baby, playing at being penniless for kicks. He came from a poor family and built his business from scratch. The accumulation of money, he says, made him chronically dissatisfied.

"I had the feeling I was working as a slave for things that I did not wish for or need."

Radeber's story seems to back up what is known in the literature on human happiness as the Easterlin Paradox. In 1974, economist Richard Easterlin found that once income was sufficient to meet a person's basic needs, happiness did not necessarily increase incrementally with income. It reaches a plateau.

That research was challenged by a 2008 study that linked higher incomes to higher happiness -- but it did add that once a certain point was reached, the rate of increasing happiness slowed.

"I think that what is happening in the economy right now is leaving people more open to the concept of what is enough," says Dr Anne B Ryan of NUI Maynooth, author of Balancing Your Life and Enough Is Plenty. "The Irish phrase 'go leor' has the dual meaning of 'enough' and 'plenty'. There is an optimum and more than that isn't necessarily helpful."

Dr Ryan's first book, Balancing Your Life, was written at the height of the Celtic Tiger in 2002. What she discovered from her case studies was that working harder for money generated a "treadmill" effect.

"People were so tired by their hectic loves that they spent money to compensate for it," she says. "They bought themselves 'treats', massages, retail therapy, ate out or bought expensive ready-meals.

"The people who said they had satisfying lives were often living on what would be considered smallish incomes. The pay-off for them was free time to do voluntary work, work that really interested them or time for loved ones."

It would be glib to suggest that someone facing foreclosure on their house or someone on the poverty line in a slum in Guatemala is happier than Richard Branson. Yet even in dire poverty, the key to happiness is not necessarily money.

Research in Costa Rica between 2004 and 2006 found that not all people who were considered poor recorded low levels of life satisfaction.

Those who came out of poverty were as likely to be unhappy if they were dissatisfied in other areas -- family, health, how much they liked their job.

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A famous 1978 study pitted the happiness levels of a group of lottery winners against a group of people who were paralysed in accidents. Both groups experienced a drastic shift in happiness in the initial months after the event -- those paralysed were often thrown into deep depression, while the lottery winners existed in a state of euphoria.

After that period, the injured's state of happiness returned to levels akin to those they experienced before their accidents. The ecstasy also wore off for the lottery winners but most seemed unable to find happiness in the mundane things that had previously brought them joy.

That is not to say that money can't bring happiness -- it's just a case of spending it correctly.

In what the field of positive psychology would dub 'pro-social spending', spending money on creating memories brings a long-lived joy that buying goods just can't match. Bringing your partner out to dinner or buying a ticket to see a concert with friends is a good emotional investment: buying a designer dress doesn't have the same psychological return.

Richard Branson is a good case of one who spreads his billions to bring maximum joy. His extravagances are in sponsoring football teams, buying a Caribbean island retreat for friends and family, and indulging his love of adventure sports -- the purchase of experiences over things.

He is also a prominent philanthropist, something which Jordan Campbell of Philanthropy Ireland says brings satisfaction when the donor is inspired by the causes to which they give.

"I think it is part of our human instinct to look after each other," says Campbell, "and that has the side-product of making us feel good."

Philanthropy is not just for billionaires -- any regular contribution of time or resources is the kind of sustained giving at which ordinary Irish folk excel.

"Money in itself can only bring you so far. Chuck Feeney (the Irish-American billionaire who transferred the bulk of his fortune to his Atlantic Philanthropies) says that his philosophy is that once your basic needs are met, well, what are you going to do with the rest of it?"

Economically we might be devastated, but emotionally we might just recover.

"We are becoming more financially intelligent and not calling it penny-pinching," says Dr Anne B Ryan.

Should our economic circumstances improve, Frances Feeney (no relation to Chuck) of Social Capital Ireland suggests we might be wiser to how to enjoy it.

"Companies are starting to look to invest in interesting projects that might yield a blended return, financial and social. People still want to make money -- but they want it to count socially too."

All profits from sales of Enough is Plenty by Dr Anne B Ryan (see www.enoughisplenty.net) go to sustainable economics foundation Feasta.


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