Are You Psychologically Wealthy?

Despite the famous saying, money actually can buy you happiness, at least on a statistical basis. But according to new research, psychological wealth -- defined as respect, happiness, personal life evaluation and support from family and friends -- may make you feel higher satisfaction than cash alone.

Put another way, more money makes people feel better about their lives, but it won't necessarily improve their quality of life, according to a research paper "Happiness in Turbulent Times," presented at the 117th Annual Convention of the American Psychological Association by father-and-son research team Ed Diener, of the University of Illinois at Urbana-Champaign, and Robert Biswas-Diener, of the Centre for Applied Positive Psychology in Milwaukee.

"People should avoid the trap of over-emphasizing financial matters and consider a complete portfolio of resources. This will help them cope when hard times are imminent," said Diener.

The Dieners' work arises from a recent poll conducted by the Gallup Organization that surveyed more than 136,000 people in 132 countries from 2005 to 2006. The poll looked at several economic factors, such as income and the wealth of the respondents' countries, in connection with each person's psychological needs.

The poll showed that a larger income was more directly related to a stronger sense of happiness than with any other factor, but a larger salary did not mean subjects felt happier on a day-to-day basis.

"Essentially, we have two forms of prosperity: economic and psychological," said Diener. "I don't know if one is better than the other. But what we've found is that while money may be able to make people lead more comfortable lives, it won't necessarily contribute to life's pleasant moments that come from engaging with people and activities rather than from material goods and luxuries."

Referring to our present recession, Biswas-Diener said "psychological wealth" helps people cope with financial loss. He added that scientifically proven coping methods include learning a new skill, meeting new people, using humor and prayer, and having supportive friends.

"Adaptation to both good and bad events is part of our psychological wealth because it helps us to move forward in life," said Biswas-Diener.

Photo courtesy of webchicken, via Flickr