Richard Easterlin is considered a pioneer in happiness. In the 70s, he argued in a paper that money does not necessarily translate into happiness over the long term.
There has been a multitude of arguments and counterarguments for years later. Primarily, they were a part of ideological warfare between the socialists and capitalists.
Finland remains the happiest country globally and India among the worst in terms of ranking in the World Happiness Index, even below Pakistan and Bangladesh.
By the size of the economy, the United States, being the largest economy globally, should have been the happiest country. There are 17 countries ahead of it. China, the second biggest in the world, is at 84th position.
Considering the rapid growth in China’s economy over the past three decades, it should have been among the top countries in the Happiness index.
The per capita wealth has grown the fastest in that country.
Over the past eight years, the Happiness Index records show that China barely moved eight places up.
That shows more money does not necessarily translate into happiness. A lot of other social, economic and emotional factors contribute to staying happy.
Since the advent of the first COVID virus strain in China in 2019, our behaviour has changed. According to the World Economic Forum estimates, women alone have lost over $800 billion world over in income.
That is in addition to trillions of dollars of losses that significant economies have taken around the world. Governments are borrowing extensively to meet the needs of ordinary citizens and provide for them during these times.
At an individual level, things have not affected the rich so much. However, a country like India faces the risk of more people moving below the poverty line due to the loss of income. A primary need to combat the pandemic is social distancing.
However, in a country like India, where people live in packed houses, social distancing may be a luxury. That is not a happy situation.
While there is no empirical evidence yet, it appears that people are coming to terms with the situation. A lot of you have started to value what you have got. ‘Less is more’ is fast becoming a catchphrase. You can live with less food, less outdoor entertainment, fewer parties and gathering and less shopping.
Human relationships are receiving more importance than before. Parents are bonding with children, and siblings are busy reaching out to each other. Husbands and wives have given their relationships another chance and a reboot.
The pandemic has spared neither the rich nor the poor. As a result, we can assume that more money need not translate into happiness for some time to come. It may be a good thing that the importance of money has diminished a bit.
However, it will continue to be a pursuit. The trend in the financial market is a case in point. As India’s numbers soar, there is no dramatic collapse in the stock market. There is no dramatic surge in gold prices either.
In a crisis, stock markets crash and gold prices rally. These factors indicate that the country’s financial markets are looking forward to a world that would emerge sooner rather than later from the pandemic. Markets continue to remain optimistic, as usual.
Things to do
The only way India and the world can emerge out of the pandemic is through vaccination. As an investor, you may want to track the progress.
“Our analysis shows Delhi, Chennai, and Mumbai are doing well in terms of vaccinations and are recording strong recovery rates. As such, they may return to normalcy sooner,” said Elara Securities in a note last week.
HSBC, a global bank, is cautious in its views but suggests that you could view any significant market fall in Indian equities positively. Indian shares have not reacted sharply despite a surge in COVID-19 cases due to the experience of last year and the fact that companies are better prepared.
You may have to stop the pursuit of happiness by chasing money. Instead, you make money to meet your life goals. The experience of 2020 shows that stock markets have a way to bounce back from a sharp fall. You need to stay invested and stay safe.
Markets remain optimistic, as usual
There is no dramatic collapse in the stock market. In a crisis, stock markets crash and gold prices rally.
These factors indicate that the country’s financial markets are looking forward to a world that would emerge. Markets continue to remain optimistic, as usual
(The author is editor-in-chief at www.moneyminute.in)