If you’re thinking of going into finance or consulting and have publicly stated your intention of doing so, you’ve likely been accused of selling your soul. “Going corporate” is not an easy decision to defend. Yes, some people are genuinely fascinated by financial markets and business optimization. Yes, the challenging nature of the work can be genuinely rewarding — but probably not as rewarding as the nearly six-figure starting salary. So, rather than having to endure what can often feel like an attack of their moral fiber, many prospective financiers and consultants choose to remain closeted, revealing themselves only after signing on to a firm.
But fear no longer questions about your post-graduation plans and lie no more about your “genuine interest” in the study of economics. You were right along: Money does indeed satisfy the soul — or at least, it can make you happy.
You’ve probably heard the spiel before: A multitude of research shows that the correlation between income and life satisfaction is strong enough to suggest a possible causation. However, the correlation holds only up to a point, commonly estimated to be somewhere around $60–70,000 — which, you guessed it, is just a notch below the average base salary of a junior analyst at McKinsey, according to Glassdoor. After that, it’s mostly about how you spend your money. One soul-soothing tactic is to spend your money on experiences rather than commodities. Sometimes we assume that the longevity of material possessions will outweigh the fleeting sensations of experiences. It’s a common psychological miscalculation, one that erroneously equates utility to the emotion of happiness. Instead, memories and good experiences are gifts to oneself that keep on giving, dispensing shots of happiness when one recalls them, especially with others. Of course, one doesn’t need riches to have happy experiences.
Here’s another way that your money can make you happy: You could give it away. Professor Elizabeth Dunn of the University of British Columbia investigated the relationship between the happiness that people report and their altruistic tendencies and discovered that those who donate or give away some portion of their income are happier people. These results even hold for relatively poor people in a cross-section of countries, from the United States to South Africa to Uganda. Another study from the University of Notre Dame shows that Americans who volunteer around six hours a week generally describe themselves as “very happy,” whereas those who report being unhappy on average volunteer around 0.6 hours a week.
Of course, it’s a little bit more complicated than that. The effect of the donation on one’s happiness is even larger if one gets to witness the consequence of one’s generosity. This effect is a part of the reason that 96 percent of U.S. donations go to organizations operating within the U.S., where Americans can see them, despite a greater need for help in other regions of the world, certainly warranting more than 4 percent. We like to see the effect of our kindness. In reality, our concern for others is rather self-interested.
And really, that’s OK. It is no sin to make ourselves happier while we enrich the lives of others; if tamed, it is a powerful positive reinforcement mechanism that can make the world a better place — and bankers and consultants have more means to do so than the rest of us. Those prospective financiers who took introductory economics will know the importance of getting the most bang for their buck, in which case they should donate some portion of their salary to a highly effective charity to maximize both their happiness and their positive effect on the world. Many charitable organizations now keep donors updated on the tangible effects of their donations to ensure that they feel connected to the people they are helping, thus gaining their dose of happiness and the incentive to give more. There is already a precedent for this. Some individuals affiliated with the effective altruism movement have taken the “Giving What We Can” pledge to donate 10 percent or more of their salary to effective charities. According to their statements, they are some of the happiest people in the world. Yet let’s not forget all the happiness that their money has enabled elsewhere. It is likely much greater than that they could have achieved spending on themselves.
So, by all means, proceed from Yale to the bougie echelons of high-rise skyscrapers across the world’s metropolises; you will have not a priori left your soul behind. And no matter whether you choose a lucrative career or not, to keep yourself happy, your soul should inform how you spend your money.
Sebastian Quaade is a first year in Pierson College and a board member of Yale Effective Altruism. Contact him at firstname.lastname@example.org .