How much money it takes to be happy – according to the rich

It's often said that there's one thing that no amount of money can purchase.

A renowned 2009 study directed by psychologist Daniel Kahneman and economist Angus Deaton discovered that happiness rises with earnings until it reaches a plateau at approximately £55,000 (around $75,000) per annum. Beyond that, higher income is not directly linked to increased happiness.

Over the years, a growing number of people have had doubts. Meanwhile, we're working ourselves to the point of exhaustion, but can't seem to save and invest for the future in a way that would give us a sense of long-term satisfaction.

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In his research study, there was no point at which happiness or life satisfaction levels appeared to plateau at £50,000 or any other figure, it seems. Instead, as individuals' income rose, they experienced an increase in positive emotions and a decrease in negative emotions. It's also been found that the gap in happiness between better-off and ordinary workers was actually greater than the gap between ordinary and low-income individuals.

Killingsworth noted in his report: "It appears that the favourable connection between income and happiness persists even at higher income levels."

Do people with more wealth tend to be happier, then?

Charlie Day is. A serial entrepreneur since her 21st birthday, Day's latest business, a sales consultancy she founded in 2021, is forecasted to rake in £1.5m this year. The more successful Day has become, the happier she has been – but this success hasn't given her the happiness she expected.

“Holiday breaks and expensive hobbies aren't the only signs of her comfortable lifestyle,” she clarifies. “It's the everyday support that makes life that much simpler, you see.”

Her £20,000 monthly wage is going towards a support system to help her cope with her hectic lifestyle in London, where both her and her husband work full-time.

She employs a full-time nanny, uses a cleaner, and avails of doorstep laundry services to save time. She also has a personal trainer and can afford private specialists to support her son's needs following his autism diagnosis.

Happiness probably isn't bought with money, but it undoubtedly yields many benefits in that regard.

It appears that having more control over life accounts for roughly 75% of the link between money and happiness, according to my research," said Killingsworth. "Consequently, one of the primary factors at play is that when people have more wealth, they have more autonomy and the freedom to live life as they wish.

Just a few years ago, Day's situation was quite stark. With an annual income of approximately £40,000 - that being a figure just below the ceiling where, according to Deaton and Kahneman, happiness plateaus - she found herself financially unable to secure full-time childcare, presented with the daunting challenge of balancing work on her business with childcare responsibilities for her three-year-old.

“All I wanted," she reminisces, "was to have sufficient funds for a cleaner." Having that someone to assist around the house has opened up her time for more leisure activities, and now that her earnings are comfortably above the minimum required for contentment, she feels even more carefree, as imagined, her satisfaction in life has only risen.

While money can't bring happiness, it can certainly contribute towards having a happier life by broadening your options and possibilities," she says. "There are certainly individuals with significant wealth who I believe are not leading the most fulfilling lives, but that's not my situation.

As Day points out, there's always an exception to every rule. Research by Killingsworth reveals that individuals with low emotional wellbeing see a significant boost to their happiness with increased income up to £75,000, after which any further growth in wealth fails to improve their mood. As he puts it, "if you're wealthy and unhappy, having more money won't make a positive difference."

‘It’s the approach that counts, not the product itself.’

For Andy Harrington, a 55-year-old from Kent, his £21 million IT recruitment firm failed to bring him contentment.

“Honestly, it had lost its sparkle. It was all about the money for me, rather than the passion,” he admits. So he sold the business, giving up financial stability to pursue a life of happiness.

“Although I could have got more for it, I chose to sell it quickly to avoid prolonged negotiations,” he says. He then went on to establish the Professional Speakers Academy, which provides training for entrepreneurs to develop their presentation skills and enhance their sales capabilities.

Harrington has also discovered that having more wealth can lead to additional problems: increased pressure, including higher tax bills, greater burdens and even social disconnection. “When you out-earn your peers, you can’t always discuss your goals or achievements without feeling like you're boasting.”

Harrington suggests it's not so much how much money you earn that affects your happiness, but rather where that money comes from. “I've experienced both wealth and poverty,” he notes. “If you're not content at £60,000 a year, it's unlikely you'll be happy if you earn £600,000.”

‘The one thing we can always relive, but spend a lifetime trying to regain’

When he was youth, Lee Broders, 54 and from Shropshire, pursued wealth. "I considered it a means to shape my way of life," he says. "I sacrificed a lot of time with my family as I was driven by the pursuit of financial gain."

Research published in the academic journal Psychological Science in 2003 discovered that possessing greater wealth is linked to happiness, yet one's drive to accumulate more money diminishes a person's overall sense of contentment and impedes their happiness. Surprisingly, individuals who prioritised financial achievement reported lower satisfaction levels not only at work and in their relationships, but also with their family life.

Broders, after going through a divorce at 35, and feeling exhausted from launching several businesses whilst studying for a law Master's degree, found himself compelled to reassess his attitude towards money.

Generating income of approximately £6,000 a month from his businesses and properties, and up to £10,000 from consultancy work, plus £25,000 from coaching, money allows Broders to reclaim time, rather than necessarily purchasing happiness.

“Time is our most precious resource, something we can't replenish or get back once it's gone. That's why I believe we should prioritise it above all else. I spent my years focused on accumulating wealth, when really I should have been making the most of the time I had and appreciating its true value,” says Broders.

Those who claim you can't buy happiness might just not be spending their money efficiently. Research from 2017 discovered that using money to purchase time will boost one's overall psychological wellbeing.

One way Broders has found joy this summer is by buying a robotic lawnmower for £600. "Now I can go to the gym, feeling reassured that the lawn is being cut," he notes. "It's about identifying the correct equipment and personnel to help gain time," he adds.

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