The popular belief that money doesn’t make you happy is not true, says new research which revealed that the richer the person, the happier they are.
The findings were published by Brookings Institution, a US-based independent research organisation, and set straight popular misconceptions surrounding wealth and satisfaction.
For many years people have believed in the notion that money cannot buy happiness, based on the theory by economics professor Richard Easterlin.
He argued that once people earn more money than they need, the extra cash did not make them feel any better.
Now a report by Justin Wolfers and Betsey Stevenson from Michigan University says that the link between wealth and well-being does not diminish as person’s income increases.
Wealthy and wise
The duo looked at data on happiness and income for rich and poor people across several countries and found no evidence to support the Easterlin theory.
“While it is appealing that income earned above a critical level no longer has an impact on well-being there is no data to prove it,” said Wolfers.
However, many people will still believe the theory and another survey earlier this year revealed that even many of America’s richest people denied more cash made them feel happier.
That survey was carried out by wealth research firm Spectrem’s Millionaire Corner which found that only 20% of millionaires in the US believe that greater wealth brought more happiness.
The same survey found that rich people are significantly more satisfied in every aspect of their life compared with less well-off Americans.
President of Millionaire Corner, Catherine McBreen, said: “Many Americans, including some of the wealthiest people in the country, say they are uncomfortable with the idea that happiness is linked to wealth.
“They do for though acknowledge that with financial security comes a sense of wellbeing.”
She added that it’s this awareness which leads to people making the first steps towards planning for their future.
This is underlined by research which shows that the investors most likely to achieve their investing and saving goals are those who stick to household budgets and financial plans.
When asked if they were to rate themselves as being ‘very happy’, less than 25% of investors who have assets of less than £64,000 agreed.
That figure compares to 44% of millionaires, described as having investable assets of between £3.2 million and £16 million, who said that they consider themselves ‘very happy’.
One of the most important happiness factors for rich people is to have a good marriage. More than 70% of millionaires saying they were ‘very satisfied’ with their relationship, compared to 45% of those who had less than £64,000 of investable asset.