Why Earning More Money Doesn't Always Make You Feel Wealthier

The relationship between income and happiness has been studied for decades, yet it continues to produce headlines that often simplify findings which are considerably more interesting.

One of the most widely discussed studies was published in 2010 by psychologist Daniel Kahneman and economist Angus Deaton.

Using more than 450,000 responses from the Gallup-Healthways Well-Being Index in the United States, they examined the relationship between income and two different aspects of wellbeing.

The first was how people evaluated their lives when asked to consider them overall.

The second was how they experienced their everyday emotions, including enjoyment, sadness, worry and stress.

The distinction matters because believing your life is going well and feeling good as you move through it are not quite the same thing.

The researchers found that people's evaluations of their lives continued to improve with higher income, but their measures of everyday emotional wellbeing appeared to stop rising beyond approximately $75,000 in annual household income.

The finding attracted enormous attention.

It was frequently interpreted as evidence that money stopped making people happier beyond a particular amount.

But the research did not establish a universal income at which happiness becomes impossible to improve, and $75,000 was a figure derived from American data collected in a particular economic period.

Money, living costs, personal circumstances and the way happiness is measured all influence the picture.

More than a decade later, the story became even more interesting.

In 2021, Matthew Killingsworth published research based on more than 1.7 million real-time wellbeing reports from 33,391 employed adults in the United States.

Rather than asking participants to remember how they had felt the previous day, he used smartphone prompts to capture how people were feeling at different moments.

His findings challenged the idea of a universal happiness plateau.

On average, both everyday emotional wellbeing and overall life satisfaction continued to rise with income, including above the previously discussed $75,000 threshold.

Then, in 2023, Killingsworth, Kahneman and Barbara Mellers collaborated to examine why the studies appeared to disagree.

Their analysis revealed something important.

For most people in the dataset, higher income was associated with greater happiness, including at higher income levels. But among approximately the least happy 20% of participants, the relationship flattened at higher incomes, around $100,000 annually.

Among the happiest participants, the association between income and happiness was stronger at higher incomes.

What fascinated me most about this research was not the financial threshold.

It was the recognition that people do not experience additional income in exactly the same way.

Money matters. It can improve people's lives, reduce hardship, increase choice and make many experiences possible.

But it does not operate independently of the emotional and psychological circumstances in which people are living.

The researchers were describing associations, not proving that increasing a person's salary will produce a particular emotional result.

Which raises a more personal question.

If having more money increases the opportunities available to us, what determines whether we actually feel the benefit of those opportunities?

Think about something you once considered expensive.

Perhaps it was staying in a particular hotel, travelling somewhere you had always wanted to visit or buying something you had imagined owning for years.

At one stage, the idea may have felt exciting simply because it was unfamiliar.

Then your circumstances changed, and the experience became possible.

The first time might have felt extraordinary.

After several occasions, however, it may have started to feel normal.

This process is related to what psychologists describe as hedonic adaptation, the tendency for people to adjust, at least to some degree, to changes in their circumstances.

Adaptation does not mean we become incapable of appreciating good things. Nor does it mean that improving our circumstances has no lasting value.

It means that the emotional impact of a change may diminish as the new circumstances become familiar.

And that has an interesting implication for wealth.

The lifestyle that once represented an extraordinary aspiration can eventually become the lifestyle against which everything else is measured.

Our reference point moves.

A purchase that once felt extravagant becomes routine. A level of income that once suggested financial freedom becomes the minimum we expect to maintain.

We may begin comparing ourselves with people whose lives are more expensive, whose achievements are more visible or whose financial circumstances appear further ahead.

Without consciously choosing to do so, we can continually move the definition of enough.

Researchers Andrew Jebb, Louis Tay, Ed Diener and Shigehiro Oishi examined income and wellbeing using data from more than 1.7 million people worldwide.

Their 2018 study, published in Nature Human Behaviour, identified average income levels at which wellbeing appeared to reach a point of satiation.

The estimated global figures were approximately $95,000 for life evaluation and $60,000–$75,000 for emotional wellbeing, with substantial differences between regions.

These figures were estimates from data analysed in that study, not timeless income targets or reliable thresholds for any individual today. Later research using different methods has challenged the idea of a universal plateau.

But the wider question of adaptation remains relevant.

At what point does something you once wanted become something you feel you must maintain?

And how often do we notice that transition?

There is another element of wealth psychology that I find particularly revealing.

We rarely judge our financial circumstances in complete isolation.

We compare.

Sometimes the comparison is deliberate. We look at somebody's career, property, income or lifestyle and wonder how our own circumstances measure up.

More often, it happens almost automatically.

We become accustomed to the people and environments around us, and what initially seemed exceptional gradually becomes our understanding of normal.

Economist Erzo Luttmer explored this relationship in a study published in The Quarterly Journal of Economics in 2005.

He examined whether people's happiness was associated with the income of others living around them.

After accounting for respondents' own incomes and other factors, he found that higher earnings among neighbours were associated with lower reported happiness.

The study cannot establish that neighbours earning more directly caused somebody to become unhappy, but it provides evidence that relative economic position can matter alongside absolute income.

This is especially relevant in a world where comparison is no longer limited to the people who live nearby.

We can see extraordinary lifestyles, businesses, properties, experiences and displays of wealth from people across the world, every day.

And very little of what we see tells us how those people actually feel.

A beautiful home does not tell us whether somebody feels secure.

An expensive holiday does not tell us whether they are content.

A successful career does not tell us whether they have meaningful relationships or enough time to enjoy their achievements.

Yet those visible markers can easily become part of the standard against which we assess our own lives.

In The Billionaire Brain®, one of the nine DREAMLIFE™ principles is Accept Your Unique Timeline, informed by the Japanese concept of Oubaitori.

The idea invites us to consider the limitations of comparing lives that are developing under different circumstances.

I think this is particularly valuable in our relationship with money.

There will always be somebody earning more, owning more or experiencing something that remains outside our present circumstances.

If our sense of wealth depends on remaining ahead of an ever-changing comparison, it becomes difficult to experience satisfaction for very long.

Financial progress is real.

But we can lose sight of that progress when we continually measure it against somebody else's life.

When people talk about wanting more money, they are not always describing a desire for material possessions.

Often, they are describing something they hope money will allow them to feel.

Relief from uncertainty.

Freedom to make choices.

Confidence about the future.

The ability to care for people they love.

The reassurance of knowing that an unexpected problem will not immediately become a financial crisis.

These are meaningful aspirations.

And this is why discussions suggesting that money does not matter for happiness can be misleading.

Financial hardship can be deeply stressful. Having sufficient resources to meet basic needs, manage emergencies and make choices can have an enormous practical effect on somebody's quality of life.

The original Kahneman and Deaton study found that lower income was associated not only with poorer assessments of life but also with greater emotional distress.

It also suggested that financial hardship could intensify the emotional experience of other difficulties, including illness and loneliness.

We should never confuse the psychological experience of wealth with the financial realities people face.

Mindset cannot pay a bill.

And somebody who is struggling to meet essential expenses does not need to be told that happiness is simply a matter of thinking differently.

But once basic financial pressures become more manageable, another question can emerge.

Does the person feel able to experience the greater security their circumstances now provide?

For some people, the answer may be yes.

For others, habits developed during earlier periods of uncertainty can persist.

Somebody who has spent years worrying about money may continue checking accounts repeatedly, anticipating difficulties or feeling uneasy about spending, even after their financial position improves.

That does not necessarily mean they have a psychological disorder or that their nervous system has a scientifically established financial limit.

It may mean that familiar behaviours and expectations have not changed at the same pace as their circumstances.

The distinction is important.

There is a difference between having no financial safety net and continuing to feel insecure despite having built one.

Both experiences deserve to be taken seriously, but they may require different responses.

The first may call for practical financial change.

The second may also benefit from examining the beliefs, habits and experiences through which security is understood.

One of the assumptions we make about greater wealth is that it will improve our lives because it gives us access to more.

More experiences, more possessions, more convenience and more opportunities.

But access and satisfaction are different.

You can have the resources to travel without making time to explore somewhere new.

You can have a beautiful home while spending very little time enjoying it.

You can have money available to support your wellbeing but continue structuring your life around commitments that leave little room for rest.

I am interested in the decisions we make once money is available, because those decisions influence the life we actually experience.

Researchers Ashley Whillans, Elizabeth Dunn and their colleagues investigated whether using money to save time was associated with greater happiness.

Their 2017 research, published in the Proceedings of the National Academy of Sciences, included surveys across several countries and an experiment in which participants used money either to purchase a time-saving service or a material item.

The experimental findings supported the idea that spending money to reduce time pressure could improve mood.

The study does not mean everybody should outsource household tasks or that purchasing convenience will always make somebody happier.

But it illustrates an important point.

The value of money is not limited to what it allows us to own.

Sometimes its value lies in what it allows us to experience, protect or reclaim.

Time with people we love.

Space to recover.

The freedom to pursue something meaningful.

Or simply the ability to move through an ordinary day without feeling constantly rushed.

The same principle appears in research on generosity.

In a 2008 study published in Science, Elizabeth Dunn, Lara Aknin and Michael Norton found evidence that spending money on other people could produce greater happiness than spending it on oneself.

Later research across different countries also found associations between generosity and wellbeing.

The evidence is not perfectly uniform; a 2022 close replication of the original experiment did not find a statistically significant difference using the same analysis.

That scientific nuance matters.

Nevertheless, there is a reasonable basis for exploring whether connection, contribution and the way we use money can influence how rewarding wealth feels.

The most interesting question may not be how much more we could purchase.

It may be what we would choose to do with our resources if we were more deliberate about the experience we wanted to create.

This is an idea I return to throughout my work.

Creating wealth, holding wealth and experiencing wealth are related, but they involve different decisions and behaviours.

Creating wealth involves the ways we develop income, assets, opportunities and economic value.

Holding wealth involves the financial habits, choices and structures that allow resources to be retained over time.

Experiencing wealth involves how we relate to what we have created and how those resources contribute to the life we are actually living.

This is my conceptual framework for understanding different aspects of financial behaviour, rather than three scientifically established psychological categories.

And I think the distinction helps explain why higher earnings do not automatically create greater financial satisfaction.

Somebody may become exceptionally capable at generating income while struggling to retain it.

Another person may build substantial financial reserves but find it difficult to spend money on experiences they genuinely value.

Somebody else may enjoy a beautiful lifestyle but carry financial commitments that undermine their long-term security.

It is possible to excel in one area and neglect another.

The relationship between these capacities is worth exploring because the financial outcomes we see from the outside rarely reveal the whole experience.

Income is not the same as wealth.

Wealth is not the same as financial security.

And neither automatically tells us whether somebody feels content, connected or free.

I believe a richer life requires us to consider all of these dimensions.

That does not mean everybody should pursue the same financial goals.

For one person, wealth might mean owning a home and having enough savings to feel secure.

For another, it might mean the freedom to travel, change careers or spend more time with family.

Some may want to build extraordinary financial resources because they value creating businesses, investing or supporting causes on a larger scale.

There is no universal figure that defines a meaningful life.

But there is value in understanding what money represents to us before assuming that more of it will provide the feeling we are seeking.

Achievement can be deeply rewarding.

There is nothing inherently wrong with wanting more, setting ambitious goals or enjoying the process of improving our circumstances.

The desire to make progress can bring purpose, energy and a sense of possibility.

The difficulty arises when satisfaction is continually postponed.

When we tell ourselves that we will feel successful after the next promotion, relaxed after the next financial milestone or free once we have accumulated a particular amount of money.

Sometimes those milestones genuinely make life easier.

But if our attention immediately moves to what remains missing, we can spend years working towards a feeling that never quite becomes available in the present.

This is connected to the difference between achievement and wellbeing.

Achievement is often measured through outcomes.

Wellbeing involves how life is experienced.

The relationship between them is important, but neither can be fully substituted for the other.

Within the DREAMLIFE™ Method, Live in Alignment explores the relationship between our choices, values and the lives we are creating.

I find that this becomes particularly relevant when people begin questioning what success means beyond its visible achievements.

Are you pursuing something because it genuinely matters to you?

Or because you have become accustomed to treating the next milestone as evidence that you are doing well?

Does the life you are building reflect the experiences and relationships you value?

Or has maintaining your existing version of success become so consuming that there is little space to enjoy it?

These are not arguments against ambition.

They are invitations to examine what ambition is meant to serve.

Because it is entirely possible to continue growing, learning and achieving while also allowing yourself to appreciate the life you already have.

I have become increasingly interested in how our repeated patterns influence what we notice.

Not because we can think our way out of every difficulty, or because positive thinking changes financial circumstances on its own.

But because attention, habit and interpretation play a role in our experience.

We become accustomed to noticing particular things.

The gap between where we are and where we want to be.

The unfinished project.

The amount we have not yet saved.

The success somebody else appears to be enjoying.

Those observations may be useful when they guide appropriate action.

But if they become the only way we interpret our circumstances, they can make it difficult to recognise progress.

This is where Conscious Conditioning™, a methodology I explore in The Billionaire Brain®, becomes relevant.

The framework encourages deliberate awareness of repeated patterns, followed by regulation, reconsideration, rehearsal, behavioural reinforcement and reflection.

In the context of money, the starting point might be noticing what happens when you reach a financial goal.

Do you acknowledge it?

Do you allow yourself to experience satisfaction?

Or does your attention immediately move towards the next target?

You might notice how you respond when somebody else appears to have more.

Whether you feel inspired, discouraged, competitive or simply curious.

You might examine the things you spend money on and ask whether they genuinely improve your life.

You might consider whether your financial habits reflect the security you want to create or whether they have become automatic responses that no longer serve you.

These questions do not produce instant transformation.

And Conscious Conditioning™ should not be mistaken for a clinically proven treatment or a substitute for financial planning, psychological support or other appropriate professional advice.

Its purpose is to give people a practical structure for bringing greater awareness and intention to the behaviours they repeat.

In my experience, that awareness can become an important starting point.

Because it is difficult to change a pattern we have never stopped to recognise.

I don't believe the answer is to become less ambitious or pretend that money is unimportant.

Money matters.

Having more of it can create meaningful opportunities. It can help us meet our needs, support people we love, reduce financial vulnerability and make experiences possible that might otherwise remain out of reach.

The research supports a positive relationship between income and wellbeing, even if the strength and shape of that relationship differ between people.

But I also believe there is something valuable in understanding that the ability to earn more and the ability to feel wealthier do not always develop at the same pace.

We can improve our circumstances without immediately changing the expectations through which we judge them.

We can become financially successful while continuing to compare ourselves with somebody else.

And we can accumulate resources without becoming particularly deliberate about how we want to use them.

None of this means we should stop pursuing financial progress.

It means we have an opportunity to become more conscious of what that progress is intended to create.

Perhaps the greatest value of wealth is not simply having more options, but being able to recognise the options we already have and make choices that reflect what matters to us.

Perhaps financial freedom is partly about resources, and partly about knowing what we want those resources to make possible.

And perhaps a richer life begins when we stop assuming that every improvement in how we feel must be preceded by another improvement in what we earn.

That is one of the ideas at the heart of The Billionaire Brain®.

You do not need to become a billionaire to begin examining the way you think about wealth.

You can start by becoming more aware of the relationship you already have with it.

And by asking whether the life you are creating is one you are allowing yourself to experience.