Are rich people happier than the rest of us?
The short answer is “yes”, but the less-rich can take some comfort in research findings.
According to recent research, day-to-day happiness rises as annual income increases, but above $US75,000 (about $A112,500) it levels off and happiness plateaus.
However, another US study found that happiness rose steadily with income levels well beyond $US75,000, without evidence of a plateau.
What to make of that? Enter collaborating researchers who recently published a Proceedings of the National Academy of Sciences paper that suggests, on average, larger incomes are associated with ever-increasing happiness.
Zoom in, however, and the relationship becomes more complex, revealing that within that overall trend, an unhappy cohort in each income group shows a sharp rise in happiness up to $US100,000 annually and then plateaus.
This simply means that, for most people, larger incomes are associated with greater happiness.
However, some people who are financially well-off are unhappy. For these rich-but-miserable people, more money won’t help.
The researchers note that emotional wellbeing and income aren’t connected by a single relationship.
For the least-happy group, happiness rises with income until $US100,000, then shows no further increase as income grows. For those in the middle range of emotional wellbeing, happiness increases linearly with income, and for the happiest group the association actually accelerates above $US100,000.
The researchers say the findings have real-world implications. For one, they could inform thinking about tax rates or how to compensate employees. They also matter to individuals as they navigate career choices or weigh a larger income against other priorities in life.
However, money isn’t the be-all and end-all to achieve emotional wellbeing. “Money is just one of the many determinants of happiness,” one of the researchers said. “Money is not the secret to happiness, but it can probably help a bit.”
The most recent research only looked at income within the bounds of average earners.
But a 2017 study looked at 4000 millionaires in the US and calculated satisfaction with lifestyle scores for these individuals.
It found there isn’t much difference between the happiness of multimillionaires until you’re worth more than $US10 million. But even the super-rich aren’t significantly happier than regular millionaires. Researchers describe the difference as “modest”.
According to the many studies into lottery winners and happiness, people who won $200,000 experienced greater stress in the year they won. However, after two years, they were more likely to be happier than those who hadn’t won any money at all.
It seems moderately sized winnings may increase happiness. Unfortunately, the impact isn’t very big and certainly not as big as we might think. Those winning the larger prizes showed no increase in happiness over those who won smaller amounts.
Yes, but it depends on what you’re spending your money on.
A 2014 study showed that spending on experiences rather than things is the best way to use money to bring happiness.
Spending on other people—even as little as $5—can bring more happiness than spending the same amount on yourself.
For further reading: Princeton, University of Pennsylvania, Science Daily, The Happiness Index
