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Home » Why Money Can’t Buy Happiness: Daniel Sachau (Transcript)

Why Money Can’t Buy Happiness: Daniel Sachau (Transcript)

Here is the full transcript of Professor Daniel Sachau’s talk titled “Why Money Can’t Buy Happiness” at TEDxMNSU 2022 conference.

Listen to the audio version here:


Money and Happiness

You’ve all heard the phrase, “money won’t buy happiness,” and it turns out it’s true. Research by psychologists, sociologists, and economists shows that while the absence of money (poverty) makes people miserable, once their basic needs are met, additional money does not translate into higher levels of satisfaction. Now at this point, many of you are thinking, “Put me in that study! You flood my life with cash; I’ll get back to you on whether I’m happy or not.”

Well, strangely, that study’s been done a few times. There’s a number of researchers who’ve looked at lottery winners, and what they find is, immediately after somebody wins the lottery, they’re happy—they’re ecstatic. One year later, they’re only slightly happier than the average person.

The Role of Expectations

The question I’ve been asking over the last 20 or so years is, why? It sure feels like money should make us happy. Why doesn’t it?

I think there’s a variety of reasons, but one of the key reasons has to do with expectations. Our satisfaction depends on expectations. Basically, for any kind of material possession, or income, or status, when we have more than we expected, we’re happy. When we have less than we expected, we’re unhappy. When we get what we expect, we’re just kind of comfortable.

The Ratchet Effect

Now that’s not the reason money won’t buy happiness. The reason money won’t buy happiness is, our expectations escalate. And once they do, they don’t easily de-escalate.

Some people call that a “ratchet effect.” You know what a ratchet wrench is? It’s one of those wrenches you put on top of the bolt, and it clicks, clicks, clicks one way, and you pull against it the other.

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