And two new studies back up what thousands of people have already learned the hard way. One concludes that £25,000 (�?�35,000) a year is all we need for optimum happiness, a surprisingly low figure given that it comes from a top London investment bank where six-figure salaries are the norm.

The other, from an academic at Oxford University, warns that wealth could even be bad for us by fostering false expectations, stress and anxiety. He says we need to learn to be satisfied with our lot, choosing the important things in life rather than trying to have it all.

Once you are earning �?�35,000 and upwards, basic needs for food, shelter and health care are covered so that more wealth does not automatically mean greater happiness, according to James Montier, global equities strategist at Dresdner Kleinwort Wasserstein.

He suggests we should focus on "personal growth" rather than more cash if we want to improve the quality of our lives. This means forgoing a bigger house, faster car or flashy watch in favour of experiences such as a diving holiday, a safari or going to a concert.

This is because possessions can quickly lose their lustre while positive experiences tend to shape our outlook, making for a richer and more rewarding life.

In his report, It Doesn't Pay: Materialism And The Pursuit of Happiness, Montier lists a string of damaging sideeffects flowing from the pursuit of materialistic goals, including attention deficit disorder, paranoia, narcissism and dependency issues.

"Materialistic pursuits pose a significant stumbling block on the path to happiness, " he says. "The more people aspire to materialistic goals, the less satisfied they appear to be with life, and the greater the risk that they may develop mental health problems. The good news is that redirecting consumption towards experiences rather than possessions seems to be capable of increasing people's happiness."

TV money expert Eddie Hobbs, presenter of Show Me The Money on RTE, believes Montier's conclusions are particularly relevant for Ireland, where huge social upheavals mean people have a lot more money but are also working a lot harder to earn it.

"This resonates very loudly with Irish workers, who are beginning to question if the rat race is worth it, " he said.

"The more we accumulate, the more we expect and it's inevitable there's going to be a backlash."

But Hobbs questioned some of Montier's arithmetic, saying that many Irish families would struggle to meet even their basic needs on an income of �?�35,000 a year.

"These kind of reports make nice reading but it's very hard to see how they could be implemented in practice, " he said. "Anyone trying to survive in Ireland, especially if they're trying to raise a family on �?�35,000 a year, probably won't have too many opportunities to go trekking in the Himalayas."

Because of the property boom, most people are trapped in the rat race just to keep a roof over their heads, Hobbs said. Even if they managed to buy before house prices spiralled out of control, people still need to earn a lot of cash so they can save for retirement.

"There are one million workers who currently have no pension, " Hobbs said.

"That's not because they're living an excessive lifestyle, it's because they can't afford to save."

Montier acknowledges that people will find it difficult to make do with less, mainly because they underestimate just how materialistic they are. He says we tend to have a very decadent definition of need, often talking of needing the latest fashionable clothes or technological gizmos.

"Breaking these shallow frames may be an important first step on the road to true sustainable happiness, " he says.

Those determined to take the plunge can take some comfort from Avner Offer, professor of economic history at Oxford University, who says people have become so addicted to being successful that they forget how to enjoy the simpler things in life.

In his new book, The Challenge of Affluence, Offer says: "The paradox is that success breeds affluence, which creates permanently raised expectations. We become acclimatised to regularly experiencing the ?wow' factor that comes with closing business deals and living the finest life. But by gorging ourselves with the fruits of our success, we forget to stop and savour the taste. In the end we lose the ability to enjoy the simple life at all and live entirely in a vortex where we strive after one goal after another, where impatience and anxiety rule."

But before embarking on a serious lifestyle change, try to ensure that your choices do not consign your family to a life of consistent poverty.

Under a new definition from the Economic and Social Research Institute, a two-child family is in a poverty trap if its income is less than �?�21,300 a year and it cannot afford two of the following for everyone in the family: two pairs of strong shoes; a warm waterproof coat; new rather than second-hand clothes; meat, chicken or fish every second day; a weekly roast; adequate home heating; presents at least once a year; the money to replace worn-out furniture, have family or friends over for a drink or a meal once a month, or have a night out once a fortnight.