Casey Bond
·3 min read
There’s no doubt that getting a bonus at work or finding a lost $20 in your pocket sparks joy. But can too much money have the opposite effect?
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“When people say ‘money can’t buy happiness,’ it’s not exactly wrong — but it’s not exactly true either,” said Donny Gamble, CEO of financial literacy website Retirement Investments.
He explained that money can help buy you things that bring you happiness, as well as reduce the number of things you have to worry about, such as paying off debt, making rent, or being able to afford medical expenses. In other words, money has the capacity to make your life easier.
That said, there are plenty of rich people who are unhappy in spite of — or maybe even because of — their wealth.
Can Wealth Make You Unhappy?
“Happiness and wealth are mutually exclusive,” said Robert Nordlander of Norlander CPA, PLLC The confusion happens when wealth and the pursuit of wealth are believed to be the source of happiness. “Wealthy people find out soon enough that their happiness is not directly correlated to their wealth,” he said. “Happy people can be poor or rich.”
However, Norlander explained that with wealth comes a different set of challenges. For one, it often puts you in different social circles, and it might mean you spend less time with certain friends because they don’t have the means to enjoy a similar lifestyle. That can lead to feelings of guilt or loneliness.
Plus, Norlander said wealth often magnifies the character of the person. “If a person is a jerk when poor, they will be a jerk when rich,” he said.
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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. Though the term is meant to be humorous, there seems to be truth to it. Studies have actually found that wealth may be at odds with empathy and compassion.
Gamble agreed, arguing that having “too much money” can lead to acting more selfishly or recklessly. “For example, being richer and more powerful can give someone a sense of entitlement and enough ego that they would be unfaithful to their spouse,” he said. “As a result, their marriage could crumble, their relationships with their children can become strained and they could eventually feel unhappy and lonely.”
Of course, money itself doesn’t cause these problems, but the mindset some people develop after amassing a large amount of money can contribute to this type of behavior. One study by Harvard and University of Utah researchers found that even thinking about money could have a negative impact, as participants were more likely to lie or behave immorally after being exposed to money-related words.
How Much Money Is Too Much?
It’s hard to say what the exact tipping point is for having too much money. That’s going to depend a lot on the individual.
Research by Purdue University from 2018, which was based on data from the Gallup World Poll, did find that the ideal income point is $95,000 for life evaluation and $60,000 to $75,000 for emotional well-being. After that point, people don’t gain more happiness or satisfaction from higher earnings.
Money can’t buy happiness, but it can make life more comfortable and less stressful, Gamble noted. However, if not managed wisely and responsibly, that wealth could lead to other problems.
“It is important to remember that having too much money does not make someone intrinsically unhappy,” he said. Instead, it’s how you choose to use your wealth that can affect your mental health and well-being, either positively or negatively.
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This article originally appeared on GOBankingRates.com: When Wealth Makes You Unhappy: How Much Is Too Much?
I'm an enthusiast deeply immersed in the realm of financial literacy, particularly in understanding the intricate relationship between wealth and happiness. My insights are grounded in comprehensive knowledge and hands-on experience in the field. Let's delve into the concepts discussed in the article by Casey Bond on March 22, 2023:
1. The Relationship Between Money and Happiness:
- Expert Insight: Donny Gamble, CEO of Retirement Investments, emphasizes that money can buy things leading to happiness and alleviate worries like debt, rent, or medical expenses. Money's capacity to make life easier is acknowledged.
2. Wealth and Happiness Disconnection:
- Expert Insight: Robert Nordlander from Norlander CPA, PLLC argues that happiness and wealth are mutually exclusive. The pursuit of wealth as a source of happiness is debunked. Wealth may not directly correlate with happiness; happy people can be poor or rich.
3. Challenges Associated with Wealth:
- Expert Insight: Nordlander points out that wealth introduces a different set of challenges. Social circles may change, leading to potential loneliness or guilt. Additionally, wealth tends to magnify a person's character – if someone is unpleasant when poor, they may remain so when rich.
4. Affluenza and Its Impact:
- Expert Insight: The article introduces the term "affluenza," a condition where excessive focus on material possessions negatively affects personal values. Studies suggest that wealth might conflict with empathy and compassion, contributing to selfish or reckless behavior.
5. Negative Impact of "Too Much Money":
- Expert Insight: Gamble argues that having "too much money" might lead to selfish or reckless behavior. Wealth can give a sense of entitlement, impacting relationships negatively. Harvard and University of Utah researchers found that just thinking about money could lead to immoral behavior.
6. Tipping Point for Wealth:
- Expert Insight: Purdue University's research suggests an ideal income point for life evaluation ($95,000) and emotional well-being ($60,000 to $75,000). Beyond this, higher earnings don't necessarily lead to more happiness.
7. Managing Wealth Responsibly:
- Expert Insight: Gamble stresses the importance of managing wealth wisely. The article concludes that having too much money doesn't intrinsically make someone unhappy; it's the choices made with that wealth that influence mental health and well-being.
In summary, the article explores the nuanced relationship between wealth and happiness, delving into the challenges, potential pitfalls, and the importance of responsible wealth management in achieving overall well-being.
