Ultra-rich Americans have the highest 'life satisfaction' in the country, Wharton professor finds
Is the road to happiness really paved with dollar signs? It’s an age-old question — and one that many have grappled with for centuries.
Matthew A. Killingsworth, a senior fellow at the Wharton School of the University of Pennsylvania, has made it his mission to uncover the answer.
In short: yes, he claims, money can buy happiness — and there may also be no limits as to the amount.
His latest research actually builds on his 2023 study which — in turn — debunked a popular 2010 survey that claimed people’s happiness levels peaked at a surprisingly low figure: a $75,000 annual income (approximately $110,000 adjusted for inflation).
Killingsworth challenges that low sum, finding that the ultra-wealthy are, indeed, quite happy — and that money plays a large role in life satisfaction levels.
To reach this conclusion, he used data from a survey of 33,269 employed Americans between the ages of 18 and 65 that had a household income of at least $10,000. Some of the millionaires in that group had assets between $3 million and $7.9 million. Killingsworth claims their life satisfaction surpassed those with six-figure incomes.
"The money-happiness curve continues rising well beyond $500,000 a year," Killingsworth told CBS MoneyWatch. "I think a big part of what's happening is that when people have more money, they have more control over their lives."
Challenging the happiness-money connection
As part of his latest research, Killingsworth had participants rate their life satisfaction on a scale from one to seven, with the highest number indicating extreme satisfaction with their lives.
While low-income individuals earning $30,000 or less gave themselves a four (out of seven), those in the $500,000 range had the median answer of five. However, multimillionaires had an average rating of six — an almost perfect score.
"One important point that isn't obvious from this paper by itself is that money is just one of many things that matter for happiness," Killingsworth told CBS MoneyWatch.
He admits that his research doesn’t break down any additional factors behind wealth-related happiness. However, Thomas Gilovich, a psychology professor at Cornell University, does.
Gilovich conducted four studies over a period of decades in an attempt to pinpoint the money-happiness connection. The major conclusion he reached: buying experiences, not things, ultimately makes people happier.
At the root of it, you can enhance social relationships via experiences — which you definitely don’t need a polo club membership or 100-foot yacht to do.
As for Killingsworth, he uses an arguably outdated study for his argument. To be fair, he derives the bulk of his findings from some 33,000 people he surveyed for a 2021 scientific journal. However, one of the two sample groups of wealthy individuals he cites dates back to 1985. (The other is from 2018).
It’s not as though he’s unaware of this. Call old results into question if you'd like — Killingsworth posits that “it is reassuring to see such a consistent pattern between… 1985 and modern, highly-powered research.”
How to boost your income
Want to test the theory that great wealth equals great happiness? If you put stock in Killingsworth’s work, then you could harvest stock of another kind.
The data tells the story: for example, based on more than a decade of market activity, $3,000 invested in the S&P 500 at the outset of 2014 could return nearly $11,000 by the end of 2024. This is a return on investment of 264% (13.22% annually).
Making money in real estate can be a little trickier, but one way is via a buy-and-hold strategy that makes the most of appreciating markets. If you can get renters on the property so much the better, as they can cover some or all of your financing, upkeep, and property taxes.
Not sure where to get started on investing strategies? Try some of these simple steps that will help you make the best decisions for your money.
As for more direct inflows, an individual in the workforce who also has a side hustles can theoretically put all that side gig money into markets or the bank. Some profitable side job ideas include dog walking, freelance writing (or editing), cleaning, being a tour guide at a local museum or art gallery, or selling handcrafted items on Etsy.
Decades of tax cuts, tech-derived wealth, turbo-charged stock markets and deregulation have made many folks rich — and the rich even richer. For them, there’s no telling how bright the road to happiness shines — and how far it stretches.
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.