Does a well-paid job make you happy?

Posted by TEBI on January 28, 2021

Does a well-paid job make you happy?



Securing a well-paid dream job can feel like the ultimate goal in life, but is it really the key to happiness? Your parents or your college professors might say yes, but according to Sonja Lyubomirsky, it doesn’t even come close. In The Myths of Happiness she even goes as far as to say that the perfect job doesn’t exist!

In this article, we dig deep into Lyubomirsky’s argument that traditional routes to happiness are flawed. We want to know: if a well-paid job doesn’t make you happy, what will?


Why doesn’t a well-paid job make you happy?

According to the author, securing a promotion or a raise provides a short-lived happiness boost. Though the upgrade is likely to make you happier initially, this boost only lasts for a few months or years.

Evidence to support this idea is sparse, but does exist. Take this 2005 study by Boswell, Boudreau, and Tichy which followed managers promoted or transferred into new jobs. Initially, they were plagued by dissatisfaction, which was quickly replaced by excitement and happiness as they began their new positions. Finally, though, within a year their happiness levels dropped back to where they had started.

The authors of the study termed this the honeymoon-hangover effect. Lyubomirsky prefers the term hedonic adaptation.


What is hedonic adaptation?

Hedonic adaptation is the process of getting used to new circumstances until you are no longer excited by them. Ever noticed how, when you first start dating someone, you can’t stop thinking about them? Then, a few months or years later, that infatuation mellows into a feeling of companionship? That’s hedonic adaptation.

In her book, Lyubomirsky points out that in romantic relationships, this process is really important. Imagine the havoc that being in a relationship could cause on your life if you never moved out of that honeymoon phase?!

It’s the same when thinking about your job or income level. An initial positive change in circumstance will naturally boost your happiness levels, but as humans we’re quick to adapt. Soon enough, just like that new relationship, your job will no longer be the shiny new toy it once was.

Interestingly, hedonic adaptation seems to affect people differently depending on their circumstances. According to the author, wealthy people who come into a small amount of additional cash experience a smaller boost in happiness than someone who has much less wealth would.


The curse of comparison

Of course, not all job dissatisfaction is a result of hedonic adaptation. Sometimes comparing ourselves to others can create dissatisfaction despite feeling otherwise content with what we have.

Spending a lot of time on social media can cause you to compare what you have and do in life with others. Having a less impressive job title or lower salary than a friend or colleague might not matter to us initially. But just thinking of it that way can bring on feelings of dissatisfaction.

To counteract this, the author recommends checking in whenever you’re experiencing feelings of disappointment or dissatisfaction. Are you feeling that way because you haven’t stuck to your own values, or measured up to your own expectations? Or is it simply because what you have is different from someone else?


How to find happiness

So we’ve explored why a promotion or salary increase isn’t a reliable indicator of a happy life. But if that’s the case, how can we achieve true happiness? Lyubomirsky has a few suggestions:


— Work to cultivate a mindset of appreciation for the things you have now. Instead of focussing on why your current job isn’t good enough, why not think more about the elements of it that you do love? Doing this will help you to ward off hedonic adaptation for longer and stop you from comparing yourself to others.

— Actively work to reduce negative experiences instead of striving to add more to your pot. Studies show that we feel happier for longer when we’ve stepped out of pain than when we add additional positive experiences to our lives. An example would be taking a pay cut in order to move into a job that is closer to home instead of a promotion. Reducing your commute time so that you can spend more time with your family each day increases your happiness. While a pay cut might seem counter-intuitive in a world focused on material worth, the emotional benefits make this an astute choice for your own personal happiness.

— Practise mindfulness to redirect your focus from negativity to positivity and contentment. By doing this, it’s possible to create what’s known as an upward spiral. In other words: positivity breeds positivity.



If you found this article interesting, we think you’ll enjoy these too:

Four financial priorities for young adults

Spend on things you love

Can money buy you happiness?

Getting comfortable with your enough

Cut yourself some slack

Are rich people as happy as they think?



People need advisers because they’re human

Is there a whelk in your fund portfolio?

Will ETFs overtake mutual funds?

Could the Woodford blow-up have been prevented?

A mistake that costs investors $15 billion a year

Does regression analysis work for factor exposure?

We deceive ourselves about financial incentives

What happens AFTER fund managers crush it?



Content such as this would not be possible without the support of our strategic partners, to whom we are very grateful. 

We currently have three partners in the UK:

Bloomsbury Wealth, a London-based financial planning firm;

Sparrows Capital, which manages assets for family offices and institutions and also provides model portfolios to advice firms; and 

OpenMoney, which offers access to financial advice and low-cost portfolios to ordinary investors.

We also have a strategic partner in Ireland:

PFP Financial Services, a financial planning firm in Dublin.

We are currently seeking strategic partnerships in North America and Australasia with firms that share our evidence-based and client-focused philosophy. If you’re interested in finding out more, do get in touch.


© The Evidence-Based Investor MMXXI



How can tebi help you?