Why more money doesn’t always mean more happiness

Many people spend their lives chasing wealth, believing it to be the ultimate measure of success. Yet, despite amassing fortunes, they find themselves unfulfilled. Is money really the key to happiness, or is there something more?

Money as a measure of success

In today’s world, success is often equated with wealth and material possessions. While it is true that money plays a crucial role in fulfilling goals and aspirations, for many, the pursuit of wealth becomes the primary focus of life.

This obsession with accumulating money, acquiring property, and chasing financial milestones often stems from a belief that wealth defines success and even life’s purpose.

However, this relentless pursuit can create more problems than it solves.

A singular focus on wealth accumulation leads individuals to take excessive risks—investing aggressively, leveraging loans to acquire assets, and constantly seeking the next big financial opportunity. They become fixated on their portfolios, checking performance obsessively, worrying over market fluctuations, and making impulsive decisions to chase trends or maximise short-term gains.

Also read: Delayed gratification: The formula for wealth creation and happiness

Ironically, this approach often backfires. The constant shuffling of investments disrupts long-term growth, incurs unnecessary costs, and results in a chaotic, poorly planned portfolio. Some individuals become so consumed by the need to grow their wealth that they neglect to enjoy it, sacrificing peace of mind in the process.

Ultimately, wealth should be a means to an end—not the end itself. Without a clear understanding of what money is meant to serve, the pursuit of financial success can become an endless, unfulfilling cycle.

Money & happiness

While financial stability is essential, accumulating more and more money does not necessarily lead to greater happiness.

Beyond a certain level of income, additional wealth contributes little to overall well-being—this is the law of diminishing returns in action, known as the Easterlin Paradox.

Named after economist Richard Easterlin, this concept, proposed in 1970, suggests that while increased wealth does correlate with higher reported happiness levels up to a point, the effect weakens and eventually flattens as wealth continues to grow.

Also read: Navigating – and optimising – the three phases of wealth creation

Once basic needs are met and a comfortable standard of living is achieved, additional financial gains offer diminishing emotional returns.

At this stage, true fulfillment and contentment come from other aspects of life—relationships, health, personal growth, and meaningful pursuits—rather than the relentless pursuit of wealth.

Beyond wealth

For many, the challenge lies in the lack of clarity about their deeper purpose.

Without a well-defined goal, people often get swept along by societal expectations, equating success with wealth accumulation rather than personal fulfilment.

When the why of life is unclear, financial pursuits become an end in themselves, leading to an endless chase with no real satisfaction.

But when individuals take the time to reflect on what truly matters, wealth can be used as a means to enhance happiness, relationships, and personal aspirations—rather than allowing it to define their entire existence.

Understanding the Easterlin Paradox is crucial—it challenges the long-held belief that accumulating more money will automatically lead to greater happiness. Recognising that wealth alone cannot guarantee contentment allows individuals to redirect their financial success toward meaningful goals.

Also read: The wealth effect: How perceived prosperity drives spending—and how to stay in control

For some, this might mean indulging in travel and adventure. Others may prioritise strengthening relationships with family and friends or giving back to society through time and philanthropy. Whatever their inclination, the focus shifts from merely growing wealth to creating a life that is fulfilling and inspiring.

By redefining success beyond financial metrics, people can move from obsessing over returns on investments to truly enjoying the returns from life itself.

Suresh Sadagopan is MD and principal officer at Ladder7 Wealth Planners and the author of the book “If God Was Your Financial Planner”.