Money isn’t the key to happiness, but having very little can make life pretty miserable. Studies have shown that money can make people happier, but only up to a certain point. After that, it stops having an effect.
A study from Penn State found that money makes people happier until they reach around $100,000 a year. People who are generally happy get even happier as their income increases. However, if you’re unhappy in general, the increase doesn’t help much.
How much money does the average person want to win in the lottery?
If you won the lottery tomorrow and could choose the amount, how much would it be? At first glance, you’d think most people would say an infinite amount or to make them the richest person on Earth. However, that’s not true. A recent study from Cambridge University found that most people assume that there is an amount of money that’s too stressful to own.
A study in the U.K. asked 1.504 people: “Which amount (in GBP) would you prefer to win?” The median answer, in pounds, was £10 million ($13,498,000). More than 75% chose between £100,000 ($134,975) and £100 million ($134,975,000).
The overall feeling was a U-shaped curve: people thought more money would bring them happiness up until around £10 million ($13,498,000). As the number got higher, they found it unappealing and took a “too much of a good thing” approach to their winnings. Interestingly, those in the study who thought “more is better” and wanted sums as high as the sky ranked higher on greed and entitlement and lower on concern for others.
“Across our studies, and in line with our expectations, we consistently found that the cluster of participants for whom there is no satiation effect [the ‘more is better’ group] is generally more proself and less prosocially oriented than the other two clusters [the ‘too much of a good thing’ crowd]…” the study’s authors wrote.
Why is $13,498,000 the lottery sweet spot?
If the average middle-class person in America won $13,498,000 in the lottery, they could buy a very nice house, put their kids through college, give a substantial amount to charity, and bank the rest to live comfortably off interest for the rest of their lives. However, if the prize was larger, the winner may become stressed about what to do with all the money.
When people have an incredible amount of money, they can become burdened by choices. Things can get complicated when you can start any business, travel to any location, and choose which charity to care about. Having an incredibly high net worth has also been found to result in isolation, identity issues, family conflict, public scrutiny, and fear surrounding wealth preservation.
Things get even more complicated if you won the lottery after making a modest living and have zero idea about how to handle a massive fortune. This often leads to financial disaster.
An interesting takeaway from the study is that the average person doesn’t want to be the next Jeff Bezos or Elon Musk. They’d like to be very comfortable without the troubles that come with building and maintaining an empire.
