These days, it seems like the uber-wealthy billionaires of the world never seem to be happy. Even as their wealth accumulation and disparity from others pushes record numbers, we rarely see stories of altruism and charitable wealth distribution, but we do often see attempts at every turn to continue to build what many would call absurd wealth. Today’s column is not an indictment on billionaires, but instead a closer look at the psychology behind wealth-building, and how for many super-wealthy people there never seems to be enough money in the world for them to be happy. Why do some people who make average earnings feel comfortable with what they have, while others with so much money that they could never spend it in a lifetime still on the lookout to gain even more money? What does psychology tell us about this mindset and related behaviors?
Psychology theories
A popular psychology theory relating to human development and motivation is Maslow’s hierarchy of needs. While Maslow’s theory might not fully explain the specifics why some people never seem to feel as though they have enough money, it does provide insight into the factors that influence human motivation.
According to Maslow, there are five sets of basic needs: physiological, safety, love, esteem and self-actualization. These needs are related to each other in a hierarchy, with the physiological needs (i.e. food, water) the most important needs to meet each day. Once physiological needs are met, safety needs (i.e. job security) become the next important need according to Maslow, and then human needs turn to love, self-esteem, and eventually self-actualization.
Maslow’s theory may not be perfect, but it is still a widely accepted theory in psychology that helps us better understand basic human behavior. Where Maslow’s theory falls short is helping us analyze why wealth accumulation, for some, never seems to satisfy the higher life needs (self-esteem and self-actualization). In other words, even with massive wealth — enough that, in theory, would decrease ongoing wealth pursuit — we seem to witness only more efforts to gain more wealth. To be clear, this observation is not a judgement in the sense that a super-wealthy person is “wrong” to continually pursue more wealth, but instead a curiosity why having such money still never seems to satisfy some people? This is where the Hedonic Treadmill theory might help.
The Hedonic Treadmill, also known as Hedonic Adaptation, suggests that people quickly adapt to increases in wealth and eventually return to a baseline level of happiness. For example, winning the lottery may bring short-term joy, but over time, people adjust to their new lifestyle and things, and their happiness levels stabilize. This may, at least in part, explain why billionaires continue to seek more wealth, despite already having a massive amount of wealth already.
Logic and emotion are different human experiences; when we are logical with our thinking, we tamp down emotional urges to do risky things. Similarly, when we are emotional, we don’t usually slow down and analyze things closely. When it comes to hyper-wealthy people never seeming to be satisfied with their wealth, it is likely they are operating primarily from an emotion-driven mindset. The Hedonic Treadmill theory helps us better understand that while logically one might have more than enough money, if the person feels as though his or her wealth doesn’t provide the same emotional comfort then it’s back to the drawing board to make more money.
Final thoughts
It is interesting to watch some people experience happiness and flourish in life with average means, while others with extraordinary wealth constantly stress trying to make even more wealth. Psychology theories help us make better sense of these differences witnessed in people, and reveal that the ways in which we subjectively experience the world around us plays a big part in our level of happiness with the things (wealth!) we have in life. While logic might tell us one thing, our emotional experience may take us in an entirely different direction, and the interaction between logic and emotions directly impact the decisions we make each day — including our efforts to accumulate wealth.
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