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Articles

Will More Money Make Me Happier?

By Jimmy Turner, MD
The Physician Philosopher

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?

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

14 Comments

  1. Dave @ Accidental FIRE

    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

    Reply
    • ThePhysicianPhilosopher

      Completely agree. I went from being well below that number to well above it overnight. Might explain why this is such a hard concept for docs to grasp

      Reply
  2. Xrayvsn

    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.

    Reply
  3. The Finance Twins

    Growing up poor, it can be easy to think that money will fix all of your problems. After one of us started making the big bucks on Wall Street, we quickly saw how wrong we were!

    Reply
  4. Wealthy Doc

    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.

    Reply
  5. Physician on FIRE

    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

    Reply
  6. Side Hustle Scrubs

    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.

    Reply
    • ThePhysicianPhilosopher

      Completely agree, SHS. that last part is a great way to put it (“spent money can’t buy happiness… But saved money can buy security.”)

      It’s all about how we use the tools we are given.

      TPP

      Reply
  7. Wealthy Doc

    I was rereading Danny Kahneman’s paper that you quoted.

    He notes the idea of people deriving little psychological benefit from income beyond some threshold is FALSE. He notes “a doubling of income provides similar increments of life evaluation for countries rich and poor.”

    “In the present study, we confirm the contribution of higher income to improving an individual’s life evaluation, even among those who are already well off.”

    “The effects of income on individuals’ life evaluations show no satiation, at least to an amount well over $120,000.”

    He argues the Cantril ladder is the best measure of life evaluation and it continues to go up with higher incomes on a log scale. I still note a diminishing marginal boost of SWB with higher incomes, but that paper gives me pause. Those who want higher and higher incomes may not be wrong when trying to improve their life.

    Reply
    • ThePhysicianPhilosopher

      I’ll have to go back and read it again, WD. My understanding of the literature I have read is that money will absolutely make you happier up until a certain threshold (which is different depending on where you live)… $120,000 seems like a reasonable number. After that point there seems to be a substantially lower marginal benefit with accruing income behind these points.

      It should be noted, though, that those studies weren’t done in physicians with hundreds of thousands of dollars in student loan debt.

      Reply
  8. Ryan

    “Ultimately, happiness in life and life satisfaction comes from being able to do what we want with our time.”

    I believe so much in this. I find it hard to even desire material objects that would significantly take away from my “time”. The day to day happiness that the freedom of “time to do what I want”, because of FI, provides so much more for what’s important to me than stuff.

    Great read and great post. I’m glad to have found it.

    Ryan

    Reply
  9. Dr. Inc.

    Great post as usual Jimmy.

    I think that many physicians feel “undervalued” by their employer, company, and 3rd party controllers of medicine. The “easy button” to hit for physicians who feel this way, is to seek better pay for their work, which at least translates their pain into something tangible, like dollars. Of course, as you state, this often does not lead to greater happiness.

    Many physicians ultimately find themselves most happy when they regain professional and personal autonomy in a system that values them professionally and personally. Fair market value compensation is just one element of this equation that makes physicians content, due to being valued.

    One of the core problems remains the new world order called physician employment. This is now the majority practice model, and the one chosen by nearly 90% of graduating residencies.

    In my humble opinion, most of these physician employment models feed the ideology of systematically undervaluing the physician personally and professionally while creating the illusion of fair market compensation. This “exchange” is not overtly stated by employers, but it is cloaked in concepts like corporate citizenship, system alignment, and market share strategies, It is further reinforced with terms like “providers” that lump all physicians in with revenue-generating allied healthcare workers (NP’s, PA’s, etc..). It’s subtle at times, but it’s a constant drip of undervaluing doctors.

    This gradual conditioning process of undervaluing from employers and 3rd parties erodes and steals the joy of medicine in such a way that it can’t be offset by higher compensation (even though that is the easy answer for most doctors).
    The road to personal and professional happiness involves regaining our autonomy. This includes emancipating ourselves from debt and finding FI. But it also involves finding new ways to organize ourselves with healthcare employers and 3rd party controllers of medicine so that we are returned to a tighter connection with our patients, and regain greater control over our lives.

    When these things happen, our value is often restored because our patients affirm our worth to them and our communities, but also our inner sense of purpose is reinforced.

    Reply
  10. ResetMD

    Great post and I completely agree that contentment is essential! Money (after a certain point) and things do not buy you happiness. I tried desperately to “earn” myself out of burnout. 70-80 hours a week desperate. I even tried to do it for the purposes of saving to retire early. These are great goals, right? However, the increase in hours and stress to do this were counterproductive and made the burnout worse. Real freedom comes when you realize the diminishing return of increased HOURS at work. This takes away from the relationships and activities that truly make you happy. Cutting back and spending less allowed me to save/payoff debt AND spend less hours at work. That’s when the burnout started to recede.
    Thanks for the amazing post.

    Reply

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