Despite the old saying, a new study shows that money can indeed buy happiness. The research reveals that individuals with extremely high net worth are “substantially and statistically significantly happier” than those earning over $500,000 annually.
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The analysis, led by senior Wharton fellow Matt Killingsworth, challenges the traditional belief that money doesn’t correlate with happiness and the common notion that happiness levels off at a certain income.
“The difference between wealthy and middle-income participants was nearly three times larger than the difference between middle- and low-income participants, contradicting the idea that middle-income people are near the peak of the money-happiness curve,” Killingsworth wrote.
Interestingly, the gap in happiness between middle-income and wealthy participants was greater than between middle-income and low-income individuals.
“The difference in life satisfaction between the wealthy and those earning $70-80,000 was nearly three times larger than the difference between $70-80,000 and the average of the two lowest income groups,” the analysis noted.
Despite this stark contrast, wealthy people still tend to be noticeably happier than their lower-income counterparts. The study indicates that the poorest individuals report lower life satisfaction compared to more affluent people.
Killingsworth previously attributed this to the decreased control associated with having less wealth. “When you have more money, you have more choices about how to live your life. You can see this in the pandemic. People living paycheck to paycheck who lose their job might need to take the first available job to stay afloat, even if it’s one they dislike,” he told PennToday in 2021.
“People with a financial cushion can wait for a better fit. Across decisions big and small, having more money gives a person more choices and a greater sense of autonomy.”