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.
Once you hit an annual household income of $75,000 (£62,000), earning more money didn't make you any happier. In 2021, the happiness researcher Matthew Killingsworth released a dissenting study, showing that happiness increased with income and there wasn't evidence of a plateau.
The research between salary and happiness suggests similar insights. Even those on the Forbes 100 wealthiest were only slightly happier than the average Americans, according to a study by Ed Diener of the University of Illinois.
Indeed, some wealthy individuals are even said to suffer from “affluenza,” a social condition among those who are excessively focused on material possessions and consumerism, to the point where their personal values and behaviors are negatively impacted.
Money contributes to happiness when it helps us make basic needs but the research tells us that above a certain level more money doesn't actually yield more happiness. Not only did earning more money make participants happier, but it also protected them from things which might make them unhappier.
Money won't make you feel fulfilled.
No matter how much money you make, it won't necessarily lead to true fulfillment in your life. Fulfillment comes from reaching goals that fulfill the purpose of your existence – and these are things that cannot be bought or sold for any price on this Earth.
Their findings indicated that, on average, those with higher incomes spent more time alone and less time interacting with others. Those with greater incomes also spent less time with their families and more time with friends when they did socialize.
You can have depression regardless of how much money you have or make. Although money makes some aspects of life easier, there are other factors that play into mental health and well-being. The wealthy can get depressed the same way people living in poverty can experience depression.
People born into higher social classes are more overconfident and have "an exaggerated belief" that they will perform better at certain tasks than others, a perception not shared by their lower-class counterparts, a new study published Monday in the prestigious Journal of Personality and Social Psychology found.
Researchers have pooled data on the relationship between money and emotions from more than 1.6 million people across 162 countries and found that wealthier people feel more positive “self-regard emotions” such as confidence, pride and determination.
View gallery. Rich people are more likely to be mean, similar to the character of Ebenezer Scrooge in Charles Dickens' A Christmas Carol, according to a new study, that found those from poorer backgrounds are more likely to be kind, like Tiny Tim and his family.
Giving by income level
Middle-class Americans donate a little less. But the lower-income population surprises by giving more than the middle—and in some measures even more than the top. (As a percentage of available income, that is. In absolute dollars, those in higher income groups give much, much more money.)
In Why It's OK to Want to Be Rich, Jason Brennan shows that the moralizers have it backwards. He argues that, in general, the more money you make, the more you already do for others, and that even an average wage earner is productively “giving back” to society just by doing her job.
The Boston studies have consistently found respondents to be a generally dissatisfied lot, whose vast fortunes have contributed to deep anxieties involving love, work, and family. They are often even dissatisfied with the size of their fortunes.
In fact, most Americans are unlikely to ever become a millionaire. Estimates vary, but they range from about 12 million to 24 million millionaires in America. While that sounds like a lot, even the upper limit of that range is less than 10% of the approximately 332 million people in the U.S.
There's also the perception — and sometimes reality — of constant competition and failure doesn't seem to be an option. Grueling hours, constant criticism from others, including strangers, and a loss of the identity you once possessed can open the door to mental health conditions such as depression.
The impact of wealth on mental health
Behind many wealthy lifestyles lies suffering, pain, childhood trauma, addiction, and depressive states. Riches may provide for a privileged education and upbringing, but children in vastly wealthy families often grow up feeling isolated and unloved.
These are some common ways money can affect your mental health: Certain situations might trigger feelings of anxiety and panic, like opening envelopes or attending a benefits assessment. Worrying about money can lead to sleep problems. You might not be able to afford the things you need to stay well.
Why is it Lonely at the top? Almost every leader, at some point in their career, has made a similar observation to Einstein. The higher you climb on a corporate ladder, the more sparse the trusted relationships. Sometimes loneliness is the result of responsibility weighing on your shoulders.
Becoming suddenly wealthy can cause people to make decisions they might not have otherwise made. Sudden wealth syndrome symptoms include feeling isolated from former friends, feeling guilty about their good fortune, and extreme fear of losing their money.
Living alone is referred to as a dream, even a luxury. A mark of distinction rather than a social failure, it no longer suggests an isolated or less-social life. It's actually sought-after.
Psychologists have long agreed more money can equate to more happiness — to a certain extent. Since a notable study published in 2010 by Princeton University's Daniel Kahneman and Angus Deaton, many have agreed that after about $75,000 a year, your happiness somewhat plateaus, even if your income increases.
The 2010 study found that money could only boost happiness up to a point — about $75,000 in annual earnings. Beyond that figure, the researchers concluded, money had little impact.
Besides close relationships, there are two other things that predict happiness in people: having a job or hobby that they love and that challenges them and helping others through volunteer work, random acts of kindness or another type of prosocial behavior. All three of these things make sense.