Before I begin, this is what Nassim Taleb had to say on “money and happiness”:

“Money can’t buy happiness, but the absence of money can cause unhappiness. Money buys freedom: intellectual freedom, freedom to choose who you vote for, to choose what you want to do professionally. But having what I call “f*ck you” money requires a huge amount of discipline. The minute you go a penny over, then you lose your freedom again. If money is the cause of your worry, then you have to restructure your life.”

The relationship between wealth and happiness is complicated. We think we would be crazily happy if we had tons and tons of money. But how far is our assumption true? What does science have to tell about the relationship between wealth and happiness?

Research in the West by Purdue University found that “once a certain income threshold was reached, further increase in income tended to be associated with reduced life satisfaction and a lower level of well-being.”

Let’s break that down. 

Most of us believe that the relationship between wealth and happiness is a linear function, and a massive increase in income will launch our happiness to the moon and back. In reality, the optimal wealth required to be happy is not infinite but a certain range to stay within. A little less or more, and you fall below the sweet spot. 

Additional wealth comes at the cost of freedom and time. You may work and grow to be richer, but you won’t be wealthy. 

You may ask, well, what’s the difference between the two.

Being rich simply means having a lot of money. Whereas being wealthy means having:

• Enough money to meet your needs

• Freedom not to work if you don’t want to

• Quality time with family and friends

Many people in India live pay-check to pay-check. According to findings from a survey, 80% of Indian employees run out of salary before month-end. 60% of the respondents from the survey reported having a monthly income of 1 lakh or more. Which is three times the average income of Indians. Yet most of them could barely manage any savings. 

With meagre savings, many families in India are just one medical emergency away from financial ruin. Which is deeply concerning and calls for more financial awareness among the millennia. 

On the other side of the wealth spectrum are the ultra-rich, whose net worth is insanely high. These are the Ambanis, Adanis, Warren Buffet, and Elon Musks of the world. 

Given an opportunity, you would instantly trade places with any of them, wouldn’t you?

Often, success in professional life means setbacks in personal life.

Elon Musk’s net worth at the moment is 232 Billion Dollars. Do you think he’s having a jolly time?

Read this excerpt from Elon’s interview with The New York Times:

In an hourlong interview with The New York Times, he choked up multiple times, noting that he nearly missed his brother’s wedding this summer and spent his birthday holed up in Tesla’s offices as the company raced to meet elusive production targets on a crucial new model.

Asked if the exhaustion was taking a toll on his physical health, Mr. Musk answered: “It’s not been great, actually. I’ve had friends come by who are really concerned.”

From the same article:

He said he had been working up to 120 hours a week recently — echoing the reason he cited in a recent public apology to an analyst whom he had berated. In the interview, Mr. Musk said he had not taken more than a week off since 2001, when he was bedridden with malaria.

“There were times when I didn’t leave the factory for three or four days — days when I didn’t go outside,” he said. “This has really come at the expense of seeing my kids. And seeing friends.”

Not just Elon, many ultra-rich individuals struggle to balance things in life. If you focus all your time on your career, your personal life will suffer. And with a lot of money and fame comes security risk, public scrutiny, and stifled freedom of speech.

Think again, do you really wanna trade places with Elon?

“Lack of money makes you a slave to your wages and job. Too much money makes you a slave to your net worth.”

So who is truly wealthy? Is it the billionaire hedge fund manager who is constantly worried because he has to outperform the market every year, or a common man with comfortable savings and a work-life balance? You decide. 

According to a study, to be in the top 10% of wealthy individuals in India, you need to be worth Rs.17.2 Lakhs, and to be in the top 5%, you need to be worth Rs.35.12 lakhs. 

Systematic financial planning and investments can take you there. 

And to answer the question: How much money do you need to be happy? Not a lot, as long as you enjoy your work, have enough savings to meet your needs and can afford to spend quality time with your family and friends. That is all that matters in the end, no?

Thank you for reading! ❤️😘