It’s long been assumed that money doesn’t buy happiness. There was a famous study in the 70s (PDF) that supported this claim. It concluded that as long as your basic needs are met, money doesn’t buy happiness – it’s money relative to the people around you. If you don’t believe the study, what about the anecdotal evidence of lottery winners reporting that they are less happier after winning? When I think about it, some of the happiest people I know aren’t particularly rich, but have good friends, family, and hobbies that they enjoy.

New York Times published an article yesterday saying that maybe everything has changed, money does buy happiness after all. In my opinion, this is the defining statistic:

In the United States, about 90 percent of people in households making at least $250,000 a year called themselves “very happy” in a recent Gallup Poll. In households with income below $30,000, only 42 percent of people gave that answer.

I think you have to look at money as a way to buy various freedoms. If you win the lottery, you might not need a day job, which gives you a lot of freedom. However, you now have cousin Nick asking you to help him out of his credit card problem. You trade one stress for another. If you are a CEO of a big company, you have plenty of money. But then you have to deal with all the responsibility that comes with it. If a friend comes up with great tickets to the big game, you often have to say no and get back to work.

I think it’s very difficult to find that happiness balance. Having money (and not the responsibility that comes with it) seems like a way to reduce those obstacles to a very happy life.