Not long ago an enterprising professor at the Harvard Business School named Mike Norton persuaded a big investment bank to let him survey the bank’s rich clients. (The poor people in the survey were millionaires.) In a forthcoming paper, Norton and his colleagues track the effects of getting money on the happiness of people who already have a lot of it: a rich person getting even richer experiences zero gain in happiness. That’s not all that surprising; it’s what Norton asked next that led to an interesting insight. He asked these rich people how happy they were at any given moment. Then he asked them how much money they would need to be even happier. “All of them said they needed two to three times more than they had to feel happier,” says Norton.
The evidence overwhelmingly suggests that money, above a certain modest sum, does not have the power to buy happiness, and yet even very rich people continue to believe that it does: the happiness will come from the money they don’t yet have. To the general rule that money, above a certain low level, cannot buy happiness there is one exception. “While spending money upon oneself does nothing for one’s happiness,” says Norton, “spending it on others increases happiness.”