Matthew A. Killingsworth of the University of Pennsylvania has made it his mission to uncover the answer to the age-old question: Can money buy happiness?
In short: yes. Moreover, he claims more money might make you happier — even if you’re already rich.
His latest research builds on his 2023 study, which produced the opposite result of a well-known 2010 survey that claimed people’s happiness levels peaked at a surprisingly low income level: about $75,000 per year (well over $100,000 based on the cost of living today).
Killingsworth found that the ultra-wealthy are, indeed, quite happy — and that money plays a large role in their satisfaction.
Using data from a survey of 33,269 employed Americans between the ages of 18 and 65, including some millionaires with assets between $3 million and $7.9 million, Killingsworth found that the tonier group had higher life satisfaction than those with six-figure incomes.
"The money-happiness curve continues rising well beyond $500,000 a year," Killingsworth told CBS MoneyWatch. "I think a big part of what’s happening is that when people have more money, they have more control over their lives."
Challenging the happiness-money connection
While those in the study earning $30,000 or less gave themselves an average score of four out of seven for life satisfaction, those in the $500,000 range had a median answer of five. However, multimillionaires had an average rating of six — by far the highest score.
Unsurprisingly, people who make six figures and multimillionaires have the highest satisfaction scores. And if you want to one day get to that point, you’ll need to manage your finances. With Arta Finance, accredited investors can build their own portfolio with stocks, bonds, ETFs, and alternative investments — all through one comprehensive platform.
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Killingsworth admits that his research doesn’t consider any additional factors besides wealth in his studies of happiness. However, Thomas Gilovich, a psychology professor at Cornell University, does.
Gilovich conducted four studies over a period of decades in an attempt to pinpoint the money-happiness connection. The major conclusion he reached: investing in experiences — like travel, the arts, and quality time — ultimately makes people happier than material things do.
So, how can you afford to buy these enriching experiences on your current budget? Acorns makes it possible to set aside funds while you do your routine shopping.
Each time you shop with your linked debit or credit card, Acorns automatically rounds up the price of your purchase to the nearest dollar and deposits the difference into a smart investment portfolio for you.
By signing up and linking your bank account, you can grow your savings without even thinking about it.
There are other ways to make your daily spending more fun, too. Swagbucks is a rewards program that gives you free gift cards and cash for shopping online at your favorite stores. Simply sign up and earn points while you shop, or play games and answer surveys to boost your points balance.
How to boost your income
Want to test the theory that greater wealth equals greater happiness? The stock market might be your best bet.
For example, based on more than a decade of market activity, $3,000 invested in the S&P 500 at the outset of 2014 could return nearly $11,000 by the end of 2024. This is a return on investment of 264% (13.22% annually).
Some savvy investors can even beat the performance of the S&P 500. Moby, a stock market advisory service, has beaten the S&P 500 by almost 12% on average in the last four years across almost 400 stock picks.
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For those drawn to a dividend-focused strategy, platforms like Public make it easy to invest in dividend stocks and exchange-traded funds (ETFs). Public not only offers commission-free trading, it also provides a high-yield account where you can park your cash between investments.
Public also has social features, enabling users to follow and learn from other investors, share ideas, and stay updated on market trends with real-time insights.
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
