Most people have heard some version of: “Money buys happiness up to a point, then it doesn’t.”
Research today is more nuanced:
In their 2010 paper, Kahneman and Deaton wrote: “High income buys life satisfaction but not happiness.”
Newer research argues happiness can keep rising with income for most people, but not equally for everyone.
As Wharton researcher Matthew Killingsworth put it: “For most people larger incomes are associated with greater happiness.”
Both can be true at once: money may keep helping, but the extra benefit per extra dollar often shrinks—especially when your basics are already covered.
So yes, diminishing returns exist — but money still matters.
This article was written by a Financial Horse Contributor.
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