Contrary to the old saying, a new study indicates that money can indeed buy happiness. The research found that individuals with extremely high net worths are “substantially and statistically significantly happier” than those earning over $500,000 annually.
The study, led by Matt Killingsworth, a senior fellow at Wharton, challenges the longstanding belief that money isn’t directly linked to happiness and disputes the notion that happiness plateaus after reaching a certain income level.
Killingsworth observed, “The difference between wealthy and middle-income participants was nearly three times larger than the difference between middle- and low-income participants, countering the idea that middle-income people are close to the peak of the money-happiness curve.”
Surprisingly, the disparity in happiness between middle-income and wealthy individuals was greater than that between middle-income and low-income groups.
The analysis elaborated, “The difference in life satisfaction between the wealthy and those earning $70-80,000 was nearly three times as large as the difference between $70-80,000 and the average of the two lowest income groups.”
Although the distinction is significant, wealthy individuals still tend to report higher levels of happiness compared to their low-income counterparts. The analysis reveals that poorer individuals often experience lower life satisfaction than their more affluent peers.
In earlier analyses, Killingsworth partially attributed this disparity to the decreased control that comes with having less wealth.
“When you have more money, you have more choices about how to live your life. This was evident during 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.
“Those with a financial cushion can wait for a better fit. Across both big and small decisions, having more money offers more choices and a greater sense of autonomy.”