Happiness experts tell us there are two kinds of happiness: Emotional well-being, and life-evaluation.
Max out your emotional Well-being!
Your emotional well-being is made up of your joys and your stresses. This day-to-day mood is changeable according to how your day is going. According to a Princeton study, earning more money (up to a point) increases your well-being. Past that point (around AU$100K per year) no amount of money can ever increase you well-being. You have “enough expendable cash to do things… like going out with friends” so happiness stops increasing with disposable income. Above this threshold, your well-being can only be increased by increasing your free time, and using your free time well.
Rich ≠ happy
Looking at this map, you can see there is some relationship between being richest and feeling happiest, but not very much – Colombia is much happier than Japan! Also, we Aussie’s are a happy bunch aren’t we?
Happiness by Country
image CC BY-SA Max Roser OurWorldInData.org/happiness-and-life-satisfaction/
Accumulate to Evaluate
Life evaluation works differently. Instead of a feeling of happiness, life evaluation comes into play when thinking about whether your life is “on track”. This second component of happiness is equally important, but it’s much less influenced by your day-to-day joys and stresses. Instead, it’s based on the feeling you’re “living the best possible life”. Life evaluation is much more closely tied to income – “the same percentage increase in income has the same effect on life evaluation for everyone, rich or poor … every 10% rise in annual income moves people up the satisfaction ladder the same amount.”
Fit your priorities to your life-stage
While you’re in your 20s, well-being dominates (which may explain teenage mood swings, but that’s another story). As we gain experience and perspective, life-evaluation becomes equally important to our happiness. Eventually, we have to accommodate both elements in our thinking to make sensible choices. When making plans and talking through your retirement strategy for example, you should be focussed on life evaluation.
Get the best of both worlds
To get as much well-being and positive evaluation as possible, maximise your free time here and now, while ensuring you build long-term financial security. Trust Bill Butler to combine long-term thinking with immediate well-being!
Lead Thought Provoker
Jay began his career in London with Rabobank, CLS bank and a Lloyd’s of London syndicate. Jay’s work has spanned corporate communications, content editing, newspaper articles, courseware, blogging, policy drafting, technical writing, and a regular crossword. He is passionate about 8-bit tunes, self-improvement, and the Oxford comma.