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Why Rich People Really Aren't Happier

All right, all right, we know that money doesn't buy happiness. But let's be honest: More money doesn't exactly make us miserable, either.

The wealthy enjoy an intangible benefit that often eludes the paycheck-to-paycheck worker: a sense of control over their lives. They feel secure in their jobs and less stressed about their futures. (Plus, they can order room service instead of trying to make three meals out of a Subway sandwich.)

But are they much happier than the rest of us wage-earning, '90s-model-Camry-driving schlubs? Not really.

Rich! Happy? Not really
Studies show that lottery winners, heiresses, and the 100 richest Americans are only slightly more satisfied than the guy toiling for his pay in the generic office-park cubicle. Still, mere mortals find it difficult to allow that an extra digit or two on the paycheck won't put a permanent smile on our faces.

Why is it so hard to accept the idea that increased wealth doesn't markedly improve our mental health?

Happy amnesia
The ability to imagine -- to try to predict our future state of mind -- is what sets us apart from less-evolved species. It's also the very thing that stunts our shot at true happiness.

We assume that a sportier car, a bigger house, a better-paying job, or that dress will bring us joy because, well, they did in the past, right?

Not really, says Daniel Gilbert, a Harvard psychology professor and the author of Stumbling on Happiness. "Research reveals that memory is less like a collection of photographs than it is like a collection of impressionist paintings rendered by an artist who takes considerable license with his subject," Gilbert writes. We forget that the new-car high deflated well before our first trip to the mechanic, and the raise came with stressful late nights at the office and a steeper tax tab.

Our appetite for self-destruction
What's so wrong with relishing and embellishing the good? It's costly. Faulty emotional recall makes us do dumb things with our money, like buying cool new stuff that never quite satisfies.

In so many areas, we know when enough is enough. When we're healthy, we don't strive for extreme health. After a good meal, we're sated -- we don't order another filet mignon to augment our satisfaction.

Yet our "pause" button shorts out when it comes to money. The brief pick-me-up that accompanies a raise or windfall (think of it like a caffeine buzz) drives us to want more. We get a raise, spend it, adapt to our improved circumstances, and seek more money, working up a sweat on what University of Southern California economist Richard Easterlin calls the hedonic treadmill.

But somehow the happy-o-meter stays in the same place, or even slows down. Consider that the average American is less satisfied with life today than we were in the 1950s -- yet we earn twice as much (and, yes, that's adjusted for inflation). No wonder they never crown a winner of the rat race.

How much is enough?
Absent total emotion recall and the ability to recognize when we've hit our happy set point, what will make us happy? How's $50,000 a year sound? That's the contentment calculation from a Roper/ASW survey a few years ago.

Of course, the amount is relative, but consider what it represents to the average (non-Manhattan-rent-paying) American: It's enough to cover the bills and have some fun money left over.

After that, each incremental move up the pay scale has less long-term emotional impact. A 20% raise won't make you 20% happier. And, in fact, chasing that extra 10 grand might just make you miserable.

So the guy in the corner office may actually be more bummed out than those of us in the cheap seats. Does that news bring a smile to your face? If so, it’s OK with us.

Dayana Yochim's profile won't cost you a dime to read. For a really pricey bit of copy, read The Fool's disclosure policy. We're still paying the lawyer's bills for that one.


Read/Post Comments (12) | Recommend This Article (48)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On April 26, 2009, at 10:11 PM, marksaal wrote:

    Every time I read one of these fluff "money isn't everything" articles I laugh. All other things being equal, having more money makes you happier.

  • Report this Comment On August 25, 2009, at 5:27 AM, snowyman wrote:

    If everything else is equal, then the only difference between the rich and poor is their bank accounts.

    One person's experiences does not undermine the overwhelming majority found by research, that more money does not equal more happiness.

    Marksaal, you're obviously rich and very happy and therefore blessed. But don't assume your own experiences mean everyone with money is happy, and that everyone with less money is less happy.

  • Report this Comment On July 06, 2010, at 3:55 PM, Suropej wrote:

    Snowyman, I think you're wrong. Marksaal isn't rich and probably thinks he's dirt poor, whether or not that's the case. His arguement is one that stupid people make.

    If all else is equal between two families except their bank accounts the "poorer" family is happier. Consider that 'All Else' would include schools attended by children, vacations, cars, homes, mega-TVs, RVs, DVDs, Blu-Rays, PS3s, Wiis, Jet-skis - et cetera into infinity. So the poorer family is doing the exact same as the richer one with less resources - a higher happiness / dollar ratio, I suppose.

    You can argue that having more money would give the richer family some satisfaction through gloating, but if the family is so shallow as to derive much pleasure from that they are liable to be much more affected by displeasure caused by the frustration that they cannot surpass the poorer family.

    Since All Else is equal and one family is richer :

    let X = Bank account

    Poor Famiy:

    All Else / X = 100%

    Rich Family

    All Else / (X+1) = <100%

    The Happiness / Dollar ratio for the Poor Family exceeds that of the Rich Family and if combined with the displeasure effect the Rich Family's H/D ratio sinks even further.

  • Report this Comment On March 05, 2011, at 11:24 PM, bassface wrote:

    The way you use your money will be the main determinant, I believe, that will determine how happy you will be. Duh, I think that sounds stupid but... The more money you have, the more tools are available for you to live a fuller life. Therefore, if you can appreciate beauty and surround yourself with art, if you can appreciate diversity and travel the world to grow, If you appreciate growth in humanity and invest in uplifting humanity and yourself, If you appreciate your family and invest time in enjoying and showing them all how to be greatfull in the world, (i.e. living life with them) if you appreciate knowledge and learn all the wonders that stir your curiosity, if you appreciate challenges and you use the money to receive challenges, If you enjoy changing injustices and do so, I think you'll be pretty happy! In short, living life like a God to the fulest extent you are capable of handleing with no stress, anger, fear or despair, should be better than living like a slave with little to no control. Also consider how many you'll inspire to follow your path by your example which may also bring you joy by helping the world evolve to a higher and fuller level!

  • Report this Comment On April 22, 2011, at 11:54 PM, jay1exp wrote:

    Hmmm... I think an important point is being missed. No matter what anyone says, "things" don't equate to lasting happiness. Oh, in the short term having a Lamborghini in the driveway or the very best in the way of electronics, shoes or clothing will make one happy - but is that happiness lasting? Humans can get used to anything. Take a guy who's making $10/hour today, pay him $60/hour and in time he'll be complaining about his job like the rest of us. He'll spend more because he has more, but his relationship with his wife and kids is no better. The amount of stress on the job is no better, in fact it's probably worse. They usually expect more out of the $125,000/ yr guy verses the $20,000/yr guy.

    "bass face" (had to adjust his name because the profanity filter caught it...) mentioned "living like a God..." Unless I misunderstood his point, that's just not possible. The truth is, I don't care if you're Bill Gates - you still get sick, you still deal with the death of loved ones, you still have bills to pay (but more of them), and you still have to work (maybe more hours) to keep what you have.

    But you can add to that the problems that us average income folk do "not" have nearly as much... family members and friends looking for hand outs, or maybe the constant concern over someone stealing from you,

    This discussion started with the phrase "All else [being] equal" - I don't think everything else is ever equal comparing the rich and the poor. The rich might have more "things" to be happy about, but I'd say they have much more to worry about as well...

  • Report this Comment On May 30, 2011, at 7:19 PM, teddiebear1209 wrote:

    I used to make $100,000 a year, now I make $9000 a year. I can tell you that I was most definently happier with the money. I can barely feed my kids and pay the bills now whereas before I had basically no financial worries. When you don't have money you can't live a prosperous life. We can't even afford to eat healthy food anymore. We can't go anywhere or do anything, it sucks. I''ve been poor for almost 10 years now and cannot get used to it. Remembering the good old days with money helps me get through.

  • Report this Comment On May 30, 2011, at 7:24 PM, teddiebear1209 wrote:

    With money - two vacations a year.

    Without money - what's a vacation.

    With money - eat healthy food when you're hungry.

    without money - dumpster diving anyone?

    With money - college is the way to go!

    Without money - maybe a community college.

    With money - car runs fine.

    Without money - what car?

    With money - not only are the bills paid but there's some money in the bank for emergencies.

    Without money - electricity or phone, which are we turning off this month?

  • Report this Comment On February 12, 2013, at 2:27 PM, effthat wrote:

    Hedonic Adaptation, or the Hedonic Treadmill demonstrates how the human mind is a redundancy reduction filter. A type of normalization process used in Evolution. Happiness is simply serotonin and dopamine, which can come from lots of different places, primarily from Novelty. Which is why you think that new Ferrari is going to make you happy, and then a week later it's boring. It's because you bought it for the wrong reason. After 100k more money does not make you happy unless you have a valid reason to spend it. If you just like making more money because you love the game, then you are a hoarder and your addiction will kill you 20 years too soon.

  • Report this Comment On February 12, 2013, at 2:31 PM, effthat wrote:

    The negative comments on here are invalid because they propose a black or white scenario with absolute disregard for the grey. The Happy Medium is called that because all life on this planet requires balance in order to thrive. We also live in a society dominated by consumers or leeches as opposed to creators. Creators are always happy when they create, because creation is human nature, it's also the nature of everything, to progress forward. Those who do not participate in creation are doomed to less serotonin and dopamine, because they don't earn their money truly, they simply leech it off of the true creators of novelty. But you probably lie to yourselves so heavily you've normalized on lies and only therapy can allow you to admit that you are a leech.

  • Report this Comment On February 12, 2013, at 2:37 PM, effthat wrote:

    An even better way to learn how this works biochemically is to watch the documentary "Happy".

    http://www.thehappymovie.com/

    It's on NFLX, it explains a lot of it.

  • Report this Comment On May 17, 2013, at 10:20 AM, chivywalrus wrote:

    "Call no man happy until he is dead. Oh happy, happy, happy..."

    So let's get down to the important issue. Happiness exists inside our head and is, to an extant, beyond our control- buried deep in our psychiatry. It is a response to our situation and our motivation; what makes one man happy makes another miseravle. If money and materials is what your after, superiority, or to "live like a god" then persue wealth. Just remember, every one has their problems, money can't make that disappear. And if your not wealthy it can be difficult to imagine that.

    The truth is that there will always, for some people. be something they are missing in their life regarless of what they own and will die looking for more. Others will die smiling in their alley. It is in our heads and beyond our controll.

    So, simply ask yourself what it is you want, then see if that is true and ask yourself why. You may not have answer. In this world there will always be suffering simply find that thing that will make you happy, whatever it maybe.

  • Report this Comment On October 14, 2014, at 5:08 PM, bubbunonuthin1 wrote:

    Joshua (erroneously name Jesus) said

    Living a simple life is best...he was NOT a proponent of poverty, and knew that happiness is the high we get when we experience something wanted...but for a brief period...and he also knew this "high" was forming the brain to deplete its energy on the hamster wheel. The more one goes down such a path, the less they can ever get off. And, in the mean time, they wear out the "hippocampus/amygdala" balance in their brain...leads to dementia as the end game.

    He said "eat of all the fruits, leave no stone unturned, spit out the bitter ones." Live your life, but does so with a keen eye on what is happening to your brain as you do.

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