Does Money Make You Happy? Maybe Not

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Secrets of the Wealthy

Secrets of the Wealthy

Many people think, “If I had more money, I’d be happier.” Or, “If I was rich, I wouldn’t have to worry about money anymore.” While it’s true that to some extent, having more money does make you happier, this effect wears off after a certain point, according to a study from Princeton University. Once you’re earning $75,000 a year, additional money does not “buy” additional happiness.

As for the rich, most people might be surprised to learn that some of America’s wealthiest people are not necessarily happy or entirely comfortable, despite their wealth. There are approximately 115,000 American households with a net worth of $25 million or more. But even with all that money, many of them still have the same problems as the rest of us – in fact, being extremely wealthy often creates new problems that most people might not expect.

A recent study by the Boston College Center on Wealth and Philanthropy, which was discussed in an article in the Atlantic, included interviews with 165 super-wealthy heads of household (with fortunes of $25 million or more). They invited these wealthy Americans to speak openly and frankly about their lives, their hopes and fears. Here are some of the surprising findings from the study, and the lessons for the rest of us:

Many wealthy people don’t “feel” rich.

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Even if you have $25 million in the bank, that doesn’t mean you’ll feel financially secure. Most of the wealthy people in the survey said that they would feel financially secure with 25 percent more wealth; one respondent said he would want to have $1 billion in the bank before he truly felt “rich.”

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Lesson for the non-rich: True financial freedom means freedom from fear. If you’re a millionaire, but your income doesn’t keep up with your expenses, you’re not truly rich and can never truly relax. Many “rich” people are barely staying ahead of their monthly payments, living a lifestyle they can barely afford. Don’t let it happen to you.

For many wealthy people, money is often a source of emotional problems.

Being rich can be socially isolating. Many of the survey respondents said that they have a hard time making friends or being open about their wealth; they feel that other people are unsympathetic to their concerns or that they have no right to complain about anything. One wealthy man said that he tries to hide his wealth from his friends and acquaintances, so that their relationships won’t change. Some people might want to ask him for money, others might resent him; either way, it’s hard to maintain a regular friendship and a “normal” life.

Lesson for the non-rich: Money doesn’t make us happy as much as our relationships make us happy. People with modest incomes and a rich network of social connections will always be happier than lonely people with billions of dollars in the bank.

Many wealthy people fear for their children’s future.

Most wealthy people are afraid of the effects of their family’s wealth on their children. They don’t want their kids to grow up to be spoiled “trust fund brats,” but at the same time, they also don’t want their kids to resent them for giving away their inheritances to charity. Extreme wealth can be a source of conflict within families. Some children who inherit wealth go on to struggle with depression, aimlessness, or even addiction. Not having to work can be a curse as well as a blessing, since work is how so many people find their sense of identity and self-worth.

Lesson for the non-rich: Be careful what you wish for. In the end, money is not enough to make us happy. Getting better at managing our money and feeling more in control of our money can help us feel happier, but perhaps people need to re-think the old game of “I want to be rich.” Getting rich doesn’t always mean you’re going to feel more fulfilled with your life. You will still have problems and struggles and frustrations in life. No matter how much money you have, it’s your personal relationships and your internal sense of self-worth that really make life worth living.

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No matter how wealthy you are today, Quizzle.com offers helpful tools and resources to improve your personal finances. With Quizzle, you can improve your credit, save money on your home loan, and make better-informed financial choices for a more prosperous financial future.

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