2 Ways Having Purpose in Life Can Affect Your Finances
What does it really take to be successful?
It’s a question many of us want the answer to. Unfortunately, the answer isn’t as straightforward as we’d like.
Some people say that meaning in life will lead you to success and wealth. Generally, statements like these should be met with a healthy level of skepticism.
You have to admit, it sounds a bit too much like someone is about to sell you something. But a new scientific study finds there’s some truth behind it. Psychologists have found that purpose in life can affect your finances in two important ways.
Can Having Meaning in Life Make You Rich?
I’m going to be the last one to tell you that having meaning will make you rich. It’s obviously not a guarantee, and there’s a lot of factors that drive success.
Additionally, wealth is really only one kind of success. But success of any kind takes hard work and continuous effort. It even takes a bit of luck.
But the new study, published in the Journal of Research in Personality, finds that a sense of purpose affects two important financial outcomes in your life.
It can predict greater income and net worth.
Don’t just take my word for it. Here’s what the researchers say in their paper:
Above and beyond known predictors of financial success, individuals who reported a higher sense of purpose in life tended both to have higher household income and net worth initially, as well as greater increase on these outcomes over the following decade.
How Finding Meaning Affects Your Bottom Line
The researchers followed over 5,000 people over an average of about 9 years.
At the start, participants were asked about their financial situation. They took personality tests and were asked about their life satisfaction, education, and how much purpose their life had.
Researchers then followed up with the same people between 7 to 10 years later. They noticed that those who felt they had more meaning in their life had not only gained more wealth, but also had bigger gains in their income than people who felt they had less purpose.
This was true even after they adjusted for things like personality differences and levels of life satisfaction, education, and marital status.
And there’s one last interesting finding from the study…
Purpose Has Bigger Impact for Young Adults
Researchers also found that the effect of purpose on income and wealth also had a bigger effect on younger adults. Particularly for those people between 20 and 35.
These findings suggest for those who have meaning earlier in their careers have a bigger effect on their financial success. Not that having meaning in your life at any point in time is a bad thing. It’s just that the effect may be stronger for those lucky enough to find it early on.
But why would purpose really affect your bottom line?
3 Reasons Why Meaning Might Affect Your Wealth
While you can’t determine causes from just one study, the experts had a few of theories.
1. The most plausible explanation seems to be that the more meaning or purpose you find in your work, the more motivation to put effort in. And usually more effort leads to larger financial rewards.
2. Another theory is based on other research, which has shown that people with purpose are healthier both psychologically and physically. This, they believe, could translate into less anxiety and more energy towards professional objectives.
3. One final reason may be due to the fact that people with purpose are more focused. The authors write:
…purposeful people may be more likely to save money or make investments that support downstream goals, and not squander resources based on impulsive decisions.
Having that focus makes you less likely to pursue distractions or spend money on expensive items or temptations.
What’s Your Success?
Success can mean different things for everyone. We define and measure it differently. Success for an Olympic athlete is different than for a CEO.
But this study is one of the first studies to show evidence that material success (money) is connected to to having a larger purpose in life. It doesn’t say you’re guaranteed millions of dollars. Just that people are better off financially.
I would argue that having a meaningful life is more important that wealth. However, being stable financially is an important part of happiness and health.
But it sure doesn’t hurt to know that having purpose can help make you healthier and wealthier.