How Important Should Income Be in Your Choice of Career?

Yesterday I got a call from someone who was exploring the possibility of working with me as a career coach. We spent about twenty minutes on the phone together as I answered a number of his very well thought through questions related to the career issue that he was facing. He made a point of telling me that he made quite a bit of money at his current job, and that it was essential that he earn a substantial amount of money as he moved forward, no matter what the choice of career. Very interestingly, though, just a few minutes before he had told me about the two years that he spent living in Cambodia when he was younger, two years during which he had next to nothing in terms of creature comforts, but that were two of the happiest years of his life. So, I wondered, why the disconnect between his actual experience and his stated goal?

In researching studies for this post, I discovered an important distinction that researchers make between happiness and satisfaction with life. Happiness is emotional – how we feel throughout the day. Satisfaction with life is more intellectual and abstract – it is the measure of how well we think we’re doing in our lives versus how well we think we should be doing. Clearly there is some relationship between these two; if I dwell on how poorly I’m doing relative to my peers (as some of my clients tend to do), I’ll be pretty miserable. But the fact is that income is perceived by most people as having a far greater impact on their happiness / satisfaction with life than it in fact does.  Study after study demonstrates that there is a much smaller correlation between income and happiness than might be imagined.  For example, a study published in Science magazine reported that:

“The belief that high income is associated with good mood is widespread but mostly illusory. People with above-average income are relatively satisfied with their lives but are barely happier than others in moment-to-moment experience, tend to be more tense, and do not spend more time in particularly enjoyable activities.”

Another study, conducted in 2008 and 2009 among 450,000 respondents in the U.S., revealed that once income exceeds $75,000/year, further increases do not lead to greater happiness. Below that level, however, adverse life circumstances (losing a job, one’s health, or a mate) do have a larger negative impact, so $75,000 offers a degree of protection.

Another example: over the past 10 years, despite a doubling of personal income, happiness among the Chinese has remained absolutely flat.

The Income Factor

Across nations, placing a higher importance on money is associated with lower feelings of well-being. In the U.S., people who report that goals of money, image, or popularity are relatively important to them report lower levels of subjective well-being. Because the ranking of one’s income relative to others in your “circle” correlates with “life satisfaction,” unless you’re WAY ahead of most of your peers, significantly more effort should be directed to enjoying the daily experiences of one’s life and significantly less to comparing oneself with others. Having worked in advertising for twenty years, I can authoritatively assert that advertising has succeeded brilliantly in one of its primary missions: building insecurity in consumers as to how they compare with others, offering the purchase of products as solutions to that insecurity.

I fell prey to this when I moved to Los Angeles in 1988, purchasing first a Jaguar convertible and then, on top of that, a Nissan Pathfinder. When I decided to leave advertising a few years later I could no longer justify two high-priced cars, and so I oh-so-reluctantly traded down to a Chevy. Within a few days I was as happy driving that vehicle as I was the other two. It was contemplating the hit to my image that had disturbed me, not the experience of driving the cars itself. Similarly, I also traded down in the housing department, selling my Hollywood Hills designer home and moving into a two bedroom apartment. I was actually more comfortable in the latter.

Best-selling author Daniel Pink, in his book Drive: The Surprising Truth about What Motivates Us points to three primary motivators once a basic income level is reached, motivators that produce meaningful and enjoyable lives: autonomy (freedom to do what we want and how we do it much of the time), mastery (the feeling of accomplishment as one gains greater proficiency in a given area) and purpose (knowing that what we do in our work can make an important difference somewhere). All this leads me to the following counsel: don’t take it as a given that you “need” a certain income to be happy. You may need that income to afford the things that you think are making you happy (house, car, clothes, club, vacations, etc.) but be very suspicious of that assumption and remember the days in Cambodia, the Chevy, or whatever other symbol of inexpensive happiness that speaks to your experience. Chances are you don’t need the income you think you do. I’ll talk more in the next few weeks about such fulfilling areas of life as “being in the flow,” “mastery,” “accomplishment,:” and purpose.