Newsweek ran an article last year on the link between happiness and money. Here’s an executive summary:

• Money will make you happier, up to a point. After that, it makes no difference. That point is the wonderfully quantitative ‘point of comfort‘.
• If you’re happy you’ll typically earn more than those less happy than you.
• If you’re materialistic, you’re more likely to develop mental health issues.

So, once you’re comfortable don’t go straining after that promotion – you’ll only get stressed. Oh, and throw out your iPod.

If money doesn’t buy happiness, what does? Grandma was right when she told you to value health and friends, not money and stuff. Or as Diener and Seligman put it, once your basic needs are met “differences in well-being are less frequently due to income, and are more frequently due to factors such as social relationships and enjoyment at work.” Other researchers add fulfillment, a sense that life has meaning, belonging to civic and other groups, and living in a democracy that respects individual rights and the rule of law. If a nation wants to increase its population’s sense of well-being, says Veenhoven, it should make “less investment in economic growth and more in policies that promote good governance, liberties, democracy, trust and public safety.”

(Curiously, although money doesn’t buy happiness, happiness can buy money. Young people who describe themselves as happy typically earn higher incomes, years later, than those who said they were unhappy. It seems that a sense of well-being can make you more productive and more likely to show initiative and other traits that lead to a higher income. Contented people are also more likely to marry and stay married, as well as to be healthy, both of which increase happiness.)

via Mind Hacks