How Happy Are Millionaires?
The surprising science of what makes millionaires happy.
Posted March 28, 2022 | Reviewed by Devon Frye
- Millionaires tend to be happy, but not extremely happy.
- At very high levels ($10M+), multimillionaires tend to be slightly happier than millionaires.
- Self-made millionaires are happier than those who inherited their millions.
As a society, we are fascinated by millionaires and billionaires. Financial tycoons like Warren Buffett, Jeff Bezos, and Elon Musk are practically A-list celebrities, with the media following their every step with a keen sense of curiosity about their lifestyles.
But just how happy is the average millionaire? This has been a hard question to study for academic researchers because, shockingly, millionaires are typically not willing to complete standard surveys that we administer for $5-$10 per hour.
Researchers sought to investigate how happy millionaires are, examining questions such as whether multimillionaires are happier than millionaires and whether going from rags to riches makes people happier than inheriting a million-dollar trust fund. Widely held ideas about money might lead one to believe that there is unbounded happiness associated with having millions, and every millionaire would be a 10 out of 10 on the happiness scale. However, this isn't quite what the researchers found.
Researchers partnered with a financial investment institution, surveying a database of around 4,000 millionaires to ask them a variety of questions including how happy they are and whether their fortunes were earned or inherited. The findings revealed three key insights.
1. Millionaires are happy, but not extremely happy.
The first, and perhaps most surprising, insight from the data found that millionaires are happy but not extremely happy. It might seem ludicrous to hear that anyone from this pool of millionaires responded as lower than a “10 out of 10” on happiness. But the results showed that millionaires were around an 8 out of 10 on their self-reported happiness. The table below shows the average happiness (out of 10) for millionaires based on their wealth bracket. The interpretation here is that there is more to life than riches, and a million dollars (or even more than $10 million!) won’t automatically bring us to a “10 out of 10” on happiness.
2. The super-rich are slightly happier than the rich.
The second insight from this research finds that multimillionaires are slightly happier than millionaires, but only at very high levels of wealth exceeding $10M. In other words, the super-rich are slightly happier at extreme levels of wealth.
The $1-$2 millionaires reported a 7.8 out of 10 happiness whereas the $10+ multimillionaires came in just above an 8.0 out of 10. Although this difference was statistically significant due to the large sample size of respondents, a 0.2 difference on a 10-point scale seems trivial compared to the ~$10M dollar difference in wealth between these groups.
3. Those who earn their millions are the happiest.
The third and final insight from this paper finds that the source of wealth had a substantial impact on well-being. The biggest difference in happiness between respondents in the data was how the participants got their fortune. The self-made millionaires who "picked themselves up by their bootstraps" and earned their millions by working for it were significantly happier than those who inherited their millions.
What Does This All Mean?
Having abundant financial resources may contribute to our happiness, but the big picture finding is that millionaires (even multimillionaires) are not perfectly happy with their lives. One of the main reasons millionaires may be happy is because money allows them to have more autonomy with how they choose to spend time, which we can all strive to do by carving out time for what matters most to us in life even if we are not uber-rich.
Working hard and going from rags to riches was the key factor associated with the happiness of the wealthy. Money can buy financial security, but it can’t buy loving families, great friends, or enriching hobbies or activities that bring us true joy in life.
Next time you see a millionaire on the news, realize they may not be as happy as you think. You can steal a secret from the wealthy and live a bit happier by spending time on the things and people in your life who bring you delight.
Donnelly, Grant E., Tianyi Zheng, Emily Haisley, and Michael I. Norton. 2018. “The Amount and Source of Millionaires’ Wealth (Moderately) Predict Their Happiness.” Personality and Social Psychology Bulletin 44 (5) (January 11): 684–699. doi:10.1177/0146167217744766.