Why Aren't Rich People Happy With The Money They Have? - The Atlantic

Why Aren’t Rich People Happy With the Money They Have?
- The Atlantic 16/11/20, 2:03 am
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FAMILY
The Reason Many Ultrarich People
Aren’t Satisfied With Their Wealth
At a certain point, another million dollars doesn’t make anything
newly affordable. That’s when other motivations take over.
JOE PINSKER DECEMBER 5, 2018
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https://www.theatlantic.com/family/archive/2018/12/rich-people-happy-money/577231/ Page 1 of 10
Why Aren’t Rich People Happy With the Money They Have? - The Atlantic 16/11/20, 2:03 am
going to suddenly
revolutionize their lifestyle.
What drives people, once
they’ve reached that point, to
keep pursuing more?
There are some good

explanations, I found, after
talking to a few people who’ve
spent significant amounts of
time in the presence of and/or
researching the really, really
rich. Michael Norton, a
Harvard Business School
professor who has studied the
connections between
happiness and wealth, had a
particularly elegant model for
understanding this pattern of
behavior.
Norton says that research

regularly points to two central
questions that people ask
themselves when determining
whether they’re satisfied with
something in their life: Am I
doing better than I was before?
and Am I doing better than
other people? This applies to
wealth, but also to
attractiveness, height, and
other things that people fret
about.
“But the problem is,” Norton

says, “a lot of the things that
really matter in life are hard to
measure. So if you wanted to
be a good parent, it’s a little
hard to know if you’re being a
better parent now than you
were a year ago, and it’s also
hard to know if you’re a better
parent than the neighbors.”
So people turn to dimensions

of comparison that can be
quantified. “Money is a terrific
one,” Norton says. “If I need
to know if I’m doing better
than I was, the easy thing to
ask is, Am I making more
money? or Does my house have
more square feet? or Do I have
more houses than I used to?”
[Read: The 9.9 percent is the

new American aristocracy.]
This instinct to measure and

compare doesn’t disappear
once people have an obscene
amount of money. “The
problem is, Am I doing better
than I was? is only [moving
people in] one direction,
which is up,” Norton says.

And if a family amasses, say,
$50 million but upgrades to a
neighborhood where everyone
has that much money (or
more), they feel a lot less rich
than if they had stuck to the
peer comparisons they were
making tens of millions of
dollars ago. Hence the ever-
shifting goalposts of wealth
and satisfaction.
The research Norton has

conducted illustrating this
phenomenon is dispiriting. In
a paper published earlier this
year, he and his collaborators
asked more than 2,000 people
who have a net worth of at
least $1 million (including
many whose wealth far
exceeded that threshold) how
happy they were on a scale of
one to 10, and then how
much more money they
would need to get to 10. “All
the way up the income-wealth
spectrum,” Norton told me,
“basically everyone says [they’d
need] two or three times as
much” to be perfectly happy.
Where did Norton find his

rich people? For that
particular study, an investment
bank connected him with
some of its high-net-worth
clients. But Norton also told
me that he had previously
consulted with a pool of
Dutch millionaires willing to
respond to researchers’
questions, making themselves
marginally richer in the
process: For one study, Norton
and his collaborator paid each
respondent about 46 euros for
every completed
questionnaire. “You can run a
survey on regular people for
like a dollar,” he says.
Jeffrey Winters, a professor of

political science at
Northwestern University and
the author of Oligarchy, said
that in addition to social
comparison, really rich people
are often motivated to acquire
more money by the thrill that
comes with multiplying one’s
fortune by making
investments, buying up
businesses, and so forth. “For
those of us who make wages
and have expenditures that we

are trying to meet—a
mortgage, pay our health
insurance, food, whatever
happens to be our kid’s tuition
—we link the making of
money to our expenses,” he
says. Meanwhile, many ultra-
wealthy people “use their
money to make money,” he
says—an exciting, status-
enhancing process.
Those two ways of putting

money to use—as a way of
covering expenses or as a way
of building a bigger fortune—
come with two different
points of diminishing returns.
“Say you wanted to have a
mega-yacht plus six mansions
in six different locations
around the world,” Winters
says. “You could probably do
all of that fairly comfortably
with a few hundred million
dollars.” It’s different if the
goal is to keep accumulating,
in which case “there’s no
number at which you have
enough,” Winters says. He
adds, “Every billionaire I’ve
spoken to, and I’ve spoken to
quite a number of them, is

extremely excited by each
additional increment of
money they make.”
Another expert I consulted,

Brooke Harrington, a
professor at the Copenhagen
Business School who has
studied and written about the
financial practices of the
super-wealthy, says that the
question many rich people ask
themselves about their money
is not Do I have enough to buy
this expensive thing I want? but
rather Do I have as much or
more than these people I’m
comparing myself with?
“The sensation of ‘being well-

off,’” she wrote to me in an
email, “is not about fulfilling a
childhood dream of buying a
sailboat or something; feeling
wealthy is about comparison
with others in your reference
group. So the question is not
what individuals want to buy,
but what they feel they must
buy in order to keep up their
status.”
The novelist Gary Shteyngart

also has firsthand experience
seeing how rich people think
about their wealth. The
protagonist of his recent
novel, Lake Success, published
a few months ago, is a New
York financier, and in the
course of researching the
book, Shteyngart cultivated
friendships with more than a
dozen highly wealthy, mostly
male hedge funders, the sorts
of people who say they’re
allergic to flying commercial
and who hire chief financial
officers to manage their
family’s abundant wealth.
“They’ve reached the point
where you have all the money
you ever really need for
anything, and the things that
they can buy are not that
expensive compared to what
they have,” he told me. “The
gull-wing Tesla, the latest
Tesla, I don’t know what it
[costs], but it’s not that much
if you have $100 million.”
One thing Shteyngart noticed

after spending time with this
crowd was how competitive
they were. “They’d compete

against one another on their
Bloomberg terminals all day
and then at the end of the day
they would play competitive
poker with each other,” he
says; this spirit of one-
upmanship pervaded even the
donations they made to
charities. Shteyngart
speculates that underneath
this competitiveness is a need
to seem smarter and more
capable than their peers:
Managers of hedge funds can
sometimes get rich from
making one or two bets that
had more to do with luck than
anything else, which might
make them feel like their
intelligence is in question even
if their money stands as
evidence of their professional
success.
Shteyngart also witnessed the

hedge funders making the sort
of social comparisons that
Norton and Harrington
described, treating money as a
“scorecard.” He remembers
one of them saying something
along the lines of “We don’t
have best-seller lists and book

awards. What we have is this
—the number at the end of
the day.”
The whole experience did not

leave Shteyngart feeling good.
Here were people who could
purchase anything they could
ever want and whose wealth
was widely envied, and even
they weren’t content—just as
these researchers studying
happiness and wealth might
have predicted. “At the end of
the day,” Shteyngart told me,
“I was just happy to end this
research, because it was quite
depressing.”
JOE PINSKER is a staff

writer at The Atlantic,
where he covers families
and relationships.
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Why Aren’t Rich People Happy With the Money They Have?

- The Atlantic 16/11/20, 2:03 am

Popular Latest Sign In Subscribe

The 9.9 Percent Is the New

As the number of millionaires

But at a certain level of

There are some good

Norton says that research

“But the problem is,” Norton

So people turn to dimensions

[Read: The 9.9 percent is the

This instinct to measure and

which is up,” Norton says.

The research Norton has

Where did Norton find his

Jeffrey Winters, a professor of

and have expenditures that we

Those two ways of putting

quite a number of them, is

Another expert I consulted,

“The sensation of ‘being well-

The novelist Gary Shteyngart

One thing Shteyngart noticed

they were. “They’d compete

Shteyngart also witnessed the

have best-seller lists and book

The whole experience did not

JOE PINSKER is a staff

1 more free article this month Sign in Subscribe Now

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