Will More Money Make Me Happier?

Financial Planning for Doctors

Recently, I published a post discussing the most recent Medscape burnout & depression survey results for physicians.  An interesting point of discussion was that many physicians felt that if they made more money, they would likely be happier.  Today, we will discuss the implications of this thought process and if there is evidence to support the claim.  Will more money make me happier?

Let’s find out.

Defining The Problem

In the aforementioned survey results, physicians felt that the number 1 solution that would decrease burnout rates was earning an increase in pay.  Of course, this doesn’t solve any of the major causes of burnout (non-physician busy work, electronic medical records, bureaucracy, and lack of support from administrators).

In the mind of the physicians filling out this survey, increased salary was chosen as it probably made the pain from the causes of burnout a little more palatable.

While student loans and other debt burdens seems to be a major contributor to burnout and depression in physicians, getting more money might not equate with lessening this burden.

In fact, physicians are notoriously bad spenders who rarely put money towards building wealth, and instead spend it on other things (cars, house, etc).   Is this problem unique to physicians?

No.  And we don’t have to look very far.  It probably won’t take you anytime at all to think of a famous athlete in the NFL or NBA who earned millions of dollars during their career and yet wound up broke.  We even see this in Hollywood with The Greatest Showman being a great example of people who chased after more when what they had wasn’t “enough.”

Remember, with the low financial literacy that exists among physicians, more money won’t solve any problems for two reasons. First, most doctors won’t know how to use the money effectively. Second, more money doesn’t solve any of the actual causes of burnout.

How Much Do We Need?

In 2010, Princeton University performed a now famous study where they described how much money people needed.  What was the point beyond which increasing salary no longer improved someone’s happiness?

The answer is $75,000.  Another study at Purdue produced similar findings where happiness and life satisfaction did not increase above $75,000-$95,000.

While the participants for this study likely were not highly debt burdened families with hundreds of thousands of dollar in student loans, they were a broad cross section of the country.

Regardless of what you think about this number, what you think would make you happy and what actually will are likely very different numbers.

Ultimately, happiness in life and life satisfaction comes from being able to do what we want with our time.  Money is simply the tool that helps us do that… but at some point, once your basic needs are taken care of, more money doesn’t help.

The Answer

The answer to all of this, of course, is to learn the art of contentment.

Here are five ways that you might learn to be content:

1.  Learn to separate spending from happiness.

A bigger house, faster car, and expensive designer clothes are unlikely to make you happier. And any happiness that you derive from expenses on new things quickly subsides.

There is nothing wrong with buying these things once you are meeting your financial goals, but it is important to recognize that they are unlikely to make you truly happier.

2.  Contentment starts with yourself.

This relates to the next point, but there is something to be said with simply knowing yourself.  Don’t let your self identity get trapped by your profession.

While working in medicine is a calling for many, it should not define who we are.  Spend some time reflecting on what makes you…you.

3.  Stop comparing yourself to others.

Learn to set your own expectations.  If you feel that part-time work or asking to focus on certain aspects of your job (i.e. research and education, if in academics) will make you happier, then set your own expectations and ask for what you want.

Many doctors have found that cutting back helped sustain their career.

4.  Learn to appreciate the life you have been given.

In the end, contentment is not really possible if you aren’t appreciative of what you currently have.

At the end of life, what will you remember the most?  For me, this will certainly be my family and friends.  It won’t be the extra shifts I worked or the amount of money I earned.

5.  Answer a question or two about your life’s purpose.  

Honesty is often the best policy.

If you spend some time reflecting on what you want to accomplish in life, you’ll likely realize pretty quickly that money might be a tool to get there… but it won’t take as much as you think.

It’ll also probably make you more intentional about how you spend your money, and produce contentment along the way.

Take Home

The earlier that we recognize that mo’ money simply causes mo’ problems, the better off we will be.  Money is not the answer to most of life’s questions.  In the end, all physicians likely earn an income that is high enough to produce life satisfaction and happiness.

Increasing pay will not fix your burnout or depression.  Finding contentment and designing a life that intentionally pursues the things that matter just might.

Will money make me happier?  Probably not.  But making bad financial decisions with the money we earn can certainly make life much worse.

The take home is simple: Learn contentment and increase your financial literacy to make smart decisions with what you currently have.

What do you think about making more money?  Do you think it would make you happier?
Are you content with what you have? How did you get there?  Leave a comment below.

TPP

10 thoughts on “Will More Money Make Me Happier?”

  1. In my experience once I reached a certain number, and it’s hard to say what that number was since it wasn’t exactly like turning on a light switch, I wasn’t any happier. Now I’m just numb to it. I have enough, an fluctuations in that number don’t matter

  2. I can guarantee you that making more money in your medical career does not stave off burnout. It feels great for awhile that you are getting better compensated, but the underlying issues that are causing you burnout (long hours, tedious clerical duties, etc) does not magically go away just because they add another 0 to your income.

    There is an indirect cause of having more money and lessening burnout and that is only if you use that money to reduce your debt. That was a significant turning point in my emotional well being when I finally became debt free, and the reason I did so so quickly was because of the high income I had was channeled into paying down debt.

    The majority of people would use that money to buy things and the happiness fades quickly and burnout resumes.

  3. About a third of the doctors said that higher compensation would solve their problem with financial stress. Can you imagine? No. They are already in the top 5% of income. More income will solve nothing. Learning how to save, invest, protect, and spend in ways that maximize happiness will provide a path out.

  4. Well said, TPP. It’s hard to believe, but I’ve come to realize that what you say is true. I’ve seen so many of our colleagues try to spend themselves happy, and it rarely works.

    Meanwhile, spending less and saving more has put us in a position to do whatever the hell we want. And that makes me happy.

    Cheers!
    -PoF

  5. I wholeheartedly agree that you can’t buy happiness. Material possessions just end up owning you.

    On the other hand, I do think there is a mental health benefit to being financially secure. PoF recently wrote about how saving and spending can stave off burnout.

    I can tell you that I am happier being debt free. It’s the simple luxuries of wealth that bring me the most happiness. It’s not cars, big houses or expensive clothes.

    It’s not having to care about the cost of diapers. It’s knowing that I could lose my job and we’d still have heat all winter long. It’s knowing that my 3 kids won’t have to worry about affording college. It’s knowing my parents won’t have to decide between affording a nursing home and paying their medical bills.

    I think if one person earns $74,999 a year and spends $75,000 and another person earns $500,000 a year and spends $75,000 there will be a happiness gap between them.

    Spent money can’t buy happiness, but saved money buys security, and security has happiness on a long term lease.

    Great post as always TPP.

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