Money Research Collective’s editorial team solely created this content. Opinions are their own, but compensation and in-depth research determine where and how companies may appear. Many featured companies advertise with us. How we make money.
Rich People Really Are Happier Than the Rest of Us: Study
By Adam Hardy MONEY RESEARCH COLLECTIVE
In this instance, more money does not equal more problems.
The old adage that money can’t buy happiness may finally need to be put to rest.
A broad body of research has long shown that money and happiness are closely related, though it was largely believed that once someone earns enough money to afford a modest, comfortable life — usually around $75,000 — the happiness benefit trails off.
However, this “happiness plateau,” as researchers call it, could be nothing more than a convenient myth due to limited information on super-wealthy Americans. According to Matthew Killingsworth, a wealth and happiness researcher and senior Wharton School fellow at the University of Pennsylvania, the ultra-rich are far happier than people earning $500,000 a year, who are themselves notably happier than low- and middle-income earners.
Like with income itself, Killingsworth’s latest self-published research found that there is a big gap in happiness between high- and low-income Americans.
“The difference in happiness between the top and bottom of the economic distribution was also quite large, contrary to the notion that money is only associated with small differences in happiness,” he wrote on his website. “The magnitude of the differences can be substantial.”
More money, more happiness?
While more money may have meant more problems for the late hip hop icon Notorious B.I.G., for most Americans, it means more happiness.
For years now, Killingsworth has been chipping away at the idea of the so-called happiness plateau. In 2023, he was a lead researcher on a widely publicized study that found earnings of up to $500,000 per year indeed increased one’s reported levels of happiness.
That isn’t to suggest people stopped getting happier if they earned more than that amount. Rather, it was a limitation of good data on people wealthier than that. That’s where his new research comes into play. It combined responses from other studies that measured a large sample of low- and middle-income earners (over 33,000) as well as about 2,200 high-net-worth individuals who are multimillionaires.
What this analysis uncovered is that not only does self-reported happiness (or, specifically in this case, satisfaction with life) increase with income, but also the happiness gap between the ultra-rich and people who have moderate incomes is actual much larger than the gap between low- and middle-income earners.
In other words, ultra-rich people are, in fact, far happier than people with modest incomes in the $70,000 to $80,000 range — the level historically associated with the happiness plateau. And modest-income earners are happier than those who earn less than them, too.
(For reference, the average income in the U.S. is about $60,000 — roughly equating to a typical response of “slightly satisfied” with life.)
Previous research based on a limited range of incomes made it difficult to determine the money-to-happiness ratio for people at the top of the income distribution, Killingsworth wrote. Many folks then filled in the blank with the idea that “each person simply needs to get ‘enough’ and can then rationally shift all their attention to things beside money,” he said. Another common theory suggests that the trappings of high society and its keeping-up-with-the-Joneses mentality actually made rich people less happy.
“The simplicity this implies may be one reason why the idea of a plateau is so attractive,” he added.
But the reality is just that many previous studies that tracked income and happiness didn’t have great data on the rich. And the reason for that, at least, is obvious.
“Perhaps rich people,” he said, “are disinclined to spend their free time taking surveys.”
Reduce payments and make debt manageable with a Debt Relief program
Recommended for debts above $20,000
- Fast & easy online registration with 24/7 customer assistance
- Free, no-obligation evaluation
- Low monthly payments with no upfront fees
- A+ rating from the BBB
- $20 Billion+ debt resolved
- Helping people overcome debt since 2002
Serving customers with $20,000 of debt and more
- 100% free, no-risk consultation
- No upfront enrollment fees
- Get out of debt in 24-48 months
- Applying won’t affect your credit score
- A+ BBB rating
- Building financial well-being since 2011
Best for people with $10,000 in unsecured debt or more
- Fast and easy application process
- No upfront fees
- Free consultation, 100% confidential
- Become debt-free in 24 to 48 months
- AFC accredited and A+ rated by the BBB
- Resolving debt since 2009
More from Money:
Here Are the 80 Best Financial Planners in the U.S.
10 Ways Millionaires (Legally) Keep Their Taxes Down in Retirement
Saving Money Might Be the Secret to Better Sleep: Study
Adam Hardy is Money's lead data journalist. He writes news and feature stories aimed at helping everyday people manage their finances. He joined Money full-time in 2021 but has covered personal finance and economic topics since 2018. Previously, he worked for Forbes Advisor, The Penny Hoarder and Creative Loafing. In addition to those outlets, Adam’s work has been featured in a variety of local, national and international publications, including the Asia Times, Business Insider, Las Vegas Review-Journal, Yahoo! Finance, Nasdaq and several others. Adam graduated with a bachelor’s degree from the University of South Florida, where he studied magazine journalism and sociology. As a first-generation college graduate from a low-income, single-parent household, Adam understands firsthand the financial barriers that plague low-income Americans. His reporting aims to illuminate these issues. Since joining Money, Adam has already written over 300 articles, including a cover story on financial surveillance, a profile of Director Rohit Chopra of the Consumer Financial Protection Bureau and an investigation into flexible spending accounts, which found that workers forfeit billions of dollars annually through the workplace plans. He has also led data analysis on some of Money’s marquee rankings, including Best Places to Live, Best Places to Travel and Best Hospitals. He regularly contributes data reporting for Best Colleges, Best Banks and other lists as well. Adam also holds a multimedia storytelling certificate from Poynter’s News University and a data journalism certificate from the Investigative Reporters and Editors (IRE) at the University of Missouri. In 2017, he received an English teaching certification from the University of Cambridge, which he utilized during his time in Seoul, South Korea. There, he taught students of all ages, from 5 to 65, and worked with North Korean refugees who were resettling in the area. Now, Adam lives in Saint Petersburg, Florida, with his pup Bambi. He is a card-carrying shuffleboard club member.