In this month’s Wealth With Sophia column, the co-founders of Sophia consider how happiness can be defined and measured, and the role of money in bringing us joy and purpose
Money can’t buy happiness, as the old adage goes. And it “can’t buy me love”, sang The Beatles.
Indeed, life’s happiness is in your relationships, the time you spend with those near and dear, and the experiences that life’s special moments can bring. This all sounds like something a good friend would tell you over a glass of wine. And they aren’t wrong. But what if we told you that money can in fact buy you happiness?
Happiness can be measured in two ways: your day-to-day happiness and your overall life satisfaction. Past research in this space has shown that those with incomes above US$75,000 experience day-to-day happiness, but not overall life satisfaction. However, a recent study from 2021 concludes that those earning incomes beyond US$80,000 can still experience higher levels of day-to-day happiness as well as overall life satisfaction. So, it seems, money can buy happiness after all.
The gender happiness gap
How do women in particular navigate money and happiness? Research shows us some very interesting findings when we bring gender into the mix. One study demonstrates that low-income women have higher levels of life satisfaction, and that’s because they are less likely to define their self-worth by their financial and economic status. Women instead derive gratification from other things such as motherhood, and were found to be more hopeful.
Is there, however, a middle ground for women in all of this? Can we rewrite the script on money because it can bring us (and our communities) joy and purpose?
A conversation on money and happiness
The Sophia team decided to reflect on the role of money and happiness in our own lives, asking, how do you define happiness? And how does money play a role in that?
Christine Yu: Money means having the power to create the life that I want, and that means money allows me to live with more joy and purpose. Purpose is my North Star—in my many years as an impact investor, I’ve always believed that my money can do good, empower others, as well as earn a decent return.
Tanya Rolfe: If I think about being happy, money doesn’t pop into my head, but freedom of choice and having time to do the things I love does. However, when you consider those two things, money affords me both. To me, building wealth is as important as making a positive impact. Gone are the days when impactful investing meant not receiving material returns—women have opened their eyes to this first. My personal impact comes from supporting women founders, especially those building businesses for women.
Nicole Denholder: Happiness and money ties very closely to security. When we feel secure financially, emotionally and physically, this allows us the space to be happy with ourselves, family, friends and environment to live our best lives. To build wealth, it's about directing my energy and focus into causes and businesses that I am passionate about, from supporting companies that I believe in, to investing in businesses that are making a positive impact.
The takeaway? Money can ‘buy’ happiness because it allows us to do more of the things we love, and less of the things we don’t.