Money, purpose, happiness—they’re often lumped together as if they’re interchangeable. But they’re not. In fact, money and purpose operate on entirely different psychological planes.

Let’s start with money. In economics, there’s a concept called “expected utility,” which refers to the satisfaction or happiness derived from a certain amount of money. The key insight here is that the more money you have, the less additional happiness each extra dollar brings. This phenomenon is known as diminishing marginal utility.

Imagine earning $1,000 a year, and then your income jumps to $10,000. That’s life-changing. You can afford essentials, maybe even some comforts. But if you’re already making $1 million a year, and your income increases to $1.01 million, you likely won’t notice much difference in your day-to-day life. The additional $10,000 doesn’t significantly enhance your well-being.

This diminishing return isn’t limited to money. It applies to many pleasures in life. Take chocolate, for example. The first piece is delightful. The second, still good. By the tenth, you’re probably over it. Our brains are wired to adapt to repeated stimuli, a process known as habituation.

This is where we often mistake money for happiness. We believe that more money will lead to more happiness, but due to habituation, the joy derived from additional wealth diminishes over time. You can’t buy your way to lasting happiness.

Now, let’s contrast this with what I call “little p” purpose. These are the activities that light us up, not because they lead to a grand achievement, but because they bring us joy in the moment. Think of hobbies, passions, or any activity that makes you lose track of time.

Here’s the remarkable thing about little p purpose: it doesn’t suffer from diminishing returns. If you love painting, each session can be as fulfilling as the last. If you enjoy running, today’s jog can be just as invigorating as the one you took a year ago. There’s no habituation here.

I’ve been podcasting for six years. Every time I sit down to record, it feels fresh and exciting. It’s an hour well spent, regardless of the outcome. Even if no one listens, the act itself is fulfilling. That’s the power of little p purpose.

And if, someday, podcasting doesn’t bring me the same joy? No problem. Little p purpose is abundant. I can shift to writing, teaching, or any number of activities that resonate with me. The key is engagement in the process, not the outcome.

This abundance and adaptability make little p purpose a more reliable source of happiness than money. While wealth can plateau in its ability to bring joy, purpose remains a renewable resource.

Money is a tool, not a goal. It’s essential for meeting our needs and can provide comfort. But for sustained happiness, we need to look beyond our bank accounts. We need to engage in activities that fulfill us, that make us feel alive.

So, if you’re chasing happiness, consider this: invest in your passions, nurture your interests, and seek out those little p purposes that make life meaningful. They might not make you rich, but they’ll make you feel rich in ways money can’t buy.

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