Everyone knows that money can't buy happiness, but numerous studies have shown that people who are financially secure tend to be happier than those who aren't.

But Jean Chatzky reports that, like most good things, too much happiness can be bad for your wallet.

University of Illinois psychology professor Ed Diener looked at the question of whether happiness reaches a point of, literally diminishing -- or even reversing -- returns. Indeed it does. Chatzky sums up the results of his study: "Diener and his colleagues used data from the World Values Survey, which measures the happiness of respondents on a scale of 1 to 10 (with 10 the happiest). They found that income did indeed increase along with happiness but not at the very top. The 10s earned significantly less than the 8s and the 9s. The latter were also more likely to have gone to college, have engaged in the political process and have saved money."

What to make of this? I'm not really sure -- if you're jubilantly happy and that prevents you from increasing your net worth, is that a bad thing? I don't think so. It's only a problem if your optimism leads you to feel overconfident in your less than adequate financial position. If you worry that your good mood is interfering with your work ethic, try watching the talking heads on CNBC blabber about our impending economic doom.

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