Rich People Doesn’t Mean Happy People
With all the recent attention to the divide between the 1% and the 99% I’m sure you’ve all heard (and maybe uttered) “I wish I had the problem of being rich”. Of course this is typically said with sarcasm as the speaker usually feels that wealth could not possibly be a problem. Quite the contrary, aren’t rich people blessed and with millions in the bank your life would be one of luxury and ease. If you asked the wealthy and they answered you honestly and with candor you might find out that wealth does not rid you of problems, it just gives you a different set of them.
I was reading a story on The Atlantic over the weekend discussing a survey done among the wealthy (those with over 25 million dollars net worth) to gauge their level of happiness and overall feelings regarding their wealth. It was quite illuminating to find that among those surveyed (165 respondents), most are still quite insecure about their level of wealth. It seems that rich people also suffer from other issues such as lack of real connections, feelings of inadequacy, a fear of being seen as ungrateful and perhaps most troubling a fear of what their wealth will do to their children.
Among a group with an average net worth of 78 million dollars you probably wouldn’t expect to find many fears or insecurities about money, but the study says this is untrue. Most of the millionaire responadants claim that they do not feel financially secure and would need 25% more wealth to have a sense of financial security. One even claimed he wouldn’t feel secure until he had 1 billion dollars! It is obvious that increased wealth does nothing to stem the feelings of insecurity when it comes to money. What level of wealth do you think is neccessary to feel secure? I can almost guarantee it is less than 1 billion dollars, but if this study is any guide it means that no matter how much money you amass you will always feel as if you need more.
Rich people can also have problems deriving pleasure from consumption. Most of us can at least temporarily get some pleasure through deliberate and excessive consumption. A dream vacation to Europe, a shopping spree, a fancy and expensive dinner or a day long spa treatment are enough for most of us to feel pleasure, at least for a few hours. This is not so for the ultra wealthy, where such things are as commonplace as a cheeseburger is to us. Gradually the pleasure from such activities is eroded, until the luxury of such experiences is no longer a luxury at all and this avenue of pleasure has been closed.
The wealthy have also lost the pleasure of being able to vent many of their frustrations. Even the most optomistic of us has frustrations and complaints from time to time, but for the super wealthy these complaints must often be internalized, lest they feel as if they are being ungrateful. The wealthy know that they are perceived as smarter, luckier, more blessed and even wiser by some and recognize that these beliefs are misplaced. They also know that others perceptions of these things being true colors most interactions with the non-wealthy. And since the non-wealthy often believe that money can solve all problems a common response to any complaints by rich people is “Well if I had your kind of money…” or “Now you see how the poor live” and other responses along the same lines.
Perhaps most troubling for many of the wealthy respondants is how the wealth they have amassed is going to effect their children or heirs. Just like you and I the wealthy do not wish their children to grow up feeling a sense of entitlement. They worry that the kids will become trust fund brats (think Paris Hilton) or if much of the inheritance is given to charity that they will spend the rest of their lives being resentful. Both very real worries, along with a third which is that the children will spend their lives drifting. Because they have all the money they could need they will never have to work, perhaps never have to even challenge themselves. While this may sound appealing at first, a life without fulfillment can be emotionless, boring and even frustrating if the person doesn’t recognize the source of their discontent. Who would want a life like that for their children.
I’ve written previously about why 1 million dollars isn’t enough and now it seems as if even 10 million or 100 million isn’t enough either. While money might buy pleasure, the old adage “Money doesn’t buy happiness” is certainly one that rich people would agree with.
Could you be satisfied with 100 million dollars in the bank or do you think you would still feel insecure? And what additional problems might come up due to a high net worth? I would love to hear your thoughts in the comments below.
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I read a study not long ago that put the “money=happiness” equation right at $75k a year – any more than that and you won’t be markedly happier, any less and you will worry about money. But my dad makes way more than that and is still fraught with financial concerns, echoing your point here exactly.
I’ve heard about that same study. Having made over $75k a year I can assure you it does not get rid of your money worries. I don’t think I made enough over the benchmark to determine if I was markedly happier or not.
Don’t worry, I’ll be satisfied with 5 million dollars :). A lot of these patterns of wealth are mentioned in “The Millionaire Next Door”. I agree that what money can do to your children is the most important concern. I think one of the best ways to deal with it if you do have that level of wealth is delaying inheritances until children are in their 30s. I heard a woman call into Loveline once who was going to receive ~$10 million when she turned 35. She’d lived very simply and very frugally her whole life and she wasn’t even sure she wanted to accept the money. She felt like she didn’t need it, she had a decent salary ($70K), she was married and owned a home. She also didn’t want it to change her husband’s attitude. I was really impressed with how down to earth she was! I doubt she would have had that attitude if she had inherited $10 million at age 21.
Only 5 million? You’re selling yourself short.
I’ve also read about people who received their inheritance at 21 and promptly became estranged from most of their non-wealthy friends. It is also common for them to become unmotivated and lose interest in their studies and careers.
i do think there is something to be said for “not having to worry about money”.
once you hit a point.. maybe somewhere around 200,000 p/year.. then you should be able to buy what you want, travel where you want, and save for the future without concerns..
i would think that this would lead to greater happiness.. at least for me..
but you are right, anything beyond that.. would probably just be gravy.
I think that depends on where you live too. I’m pretty sure that $200k a year in NYC or San Francisco wouldn’t cut it for buying everything you want and saving for the future. Of course that too depends on your level of wants and whether or not you become a victim of lifestyle creep. I’ve read stories of people with $1-5 million a year who are basically living on the edge because their peer group is those with $10+ million per year. They feel compelled to keep up with the spending habits of those others and it nearly drains all their wealth.
It is quite interesting how money seems to always be a concern no matter how much you are making. The super rich have a lot more pressure to maintain an expensive lifestyle and keep up with their rich friends. They also stand to lose a lot more on their investments. I don’t think I need $200k/year or anything crazy like that to be happy. People who claim numbers like that are necessary are sometimes just trying to brag about their own level of income.
I think in some cases you may be right about the bragging. Another fact I found interesting is that the rich stress out over their charity giving. Which I suppose makes sense since some of them are giving tens of millions or dollars.
I’d like to think that with $100 million I would feel secure, but then I think about the people that would start “hitting me up”, telling me tales of woe and how they could use a few bucks. I’d start to question all of my friends and who really is a friend or not.
And then on the flip-side, what about those friends and family members that assume you will pick up the tab because you have so much money. Then when you don’t, they get mad at you.
That was actually one of the things reported in the survey.
In general, I think that most of the confusion is likely around the term “feel secure” used in the article. Feeling secure is usually along the lines of continue my current lifestyle and it’s rate of appreciation forever. If you’ve got 100m in the bank, and you have a 10m income each year, if that went away, would you feel secure knowing you have less than 15 years of your current lifestyle remaining? Granted living on only 1m a year may sound nice, but agai, if you’re used to 10m, that is quite a hit. You’d have to drive your Bentley for a second year before upgrading!
Different problems, but the same problems. But, I’m willing to try and
deal with the problems of the rich, eventually anyway. I think I could deal with
100m. That’s some pretty decent interest on an annual basis.
That’s a very good point you make about feeling secure. I guess if you continued a $100.000 lifestyle even though you have $100 million you would probably feel pretty secure.
It’s an easy cop out for one to say that since he/she has money problems, then someone else who doesn’t have money problems has no problems at all. But that’s simply not true.
A lot of the perceived wealthy are small business owners, and as the daughter of one, I know that life is NOT without late nights tossing and turning over the fate of the business and its employees.
Aside from stress and insecurity, as you mention, there’s also a whole other barrage of problems we can have as human beings. None of us can escape it, no matter how much money we have.
You are completely spot on. Everyone has problems, money just changes the types of problems one has. And sometimes makes them much larger as well. The wealthy tend to give to charity more than others and guess what…it causes stress for them. Just think, if you and I give to charity it is likely no more than a few thousand dollars, but the wealthy are giving sums in the multiple millions. I’m pretty sure I would stress over it if I had to decide what charity should get a 5 million dollar donation.
I would be quite happy at 5 million dollars.
At that point, I probably would start spending a lot more frivolously though.
Warren Buffet is doing pretty well at being wealthy. He will give most of his wealth to charity and his kids are doing very well by themselves. They are getting some money, but they have their own career and lives. They all grew up in a regular home and nothing extravagant.
Bill Gates is doing quite well at giving away his money as well. 5 million huh? I think you are already well on your way there Joe!
I’d like to at least test drive it. Make me rich and I’ll tell you how happy I am.
Nice answer Sandy
I think less debt would make me more happy than more money, but they are probably the same. As long as I can have the freedom to do what I want. I wouldn’t trade my salary for more hours. I’d actually take a pay cut.
Great breakdown
That’s the yardstick I use as well, do I have enough money to do what I want. So far when that is true I am pretty happy.
Always a race of keeping up with the Jones’, there is always someone who has something better than you. So it is really just a matter of perspective when you look at rich people being happy. As a poor person that is a good dilemma to have that you are torn between a mercedes and bmw. As a rich person you are torn between the bentley and rolls. Needless to say someone always has what you cant have. I think money can buy happiness because there is a point where having it your worries disappear.
If you read the study I linked to they claim (based on respondents replies) that there is not a level at which money makes you worries disappear. In many cases it just gives you a different set of worries.
For me money never quated to happiness. But I have to admit that it does equate to my stress levels. I’ve seen rich and happy, I’ve seen rich and miserable.
I think even with money you can have a great deal of stress. Instead of stressing about how to get more money your stress becomes how to keep what you have.
I believe it would all come down to the individual but keep in mind, with money comes power and the ability to make things happen.