The Reason Many Ultrarich People Aren’t Satisfied With Their Wealth

As the number of millionaires and billionaires in the world climbs ever higher, there are a growing number of people who possess more money than they could ever reasonably spend on even the lushest goods.

But at a certain level of wealth, the next million isn’t going to suddenly revolutionize their lifestyle. What drives people, once they’ve reached that point, to keep pursuing more?

There are some good explanations, I found, after talking to a few people who’ve spent significant amounts of time in the presence of and/or researching the really, really rich. Michael Norton, a Harvard Business School professor who has studied the connections between happiness and wealth, had a particularly elegant model for understanding this pattern of behavior.

Norton says that research regularly points to two central questions that people ask themselves when determining whether they’re satisfied with something in their life: Am I doing better than I was before? and Am I doing better than other people? This applies to wealth, but also to attractiveness, height, and other things that people fret about.

“But the problem is,” Norton says, “a lot of the things that really matter in life are hard to measure. So if you wanted to be a good parent, it’s a little hard to know if you’re being a better parent now than you were a year ago, and it’s also hard to know if you’re a better parent than the neighbors.”

So people turn to dimensions of comparison that can be quantified. “Money is a terrific one,” Norton says. “If I need to know if I’m doing better than I was, the easy thing to ask is, Am I making more money? or Does my house have more square feet? or Do I have more houses than I used to?”

[Read: The 9.9 percent is the new American aristocracy.]

This instinct to measure and compare doesn’t disappear once people have an obscene amount of money. “The problem is, Am I doing better than I was? is only [moving people in] one direction, which is up,” Norton says. And if a family amasses, say, $50 million but upgrades to a neighborhood where everyone has that much money (or more), they feel a lot less rich than if they had stuck to the peer comparisons they were making tens of millions of dollars ago. Hence the ever-shifting goalposts of wealth and satisfaction.

The research Norton has conducted illustrating this phenomenon is dispiriting. In a paper published earlier this year, he and his collaborators asked more than 2,000 people who have a net worth of at least $1 million (including many whose wealth far exceeded that threshold) how happy they were on a scale of one to 10, and then how much more money they would need to get to 10. “All the way up the income-wealth spectrum,” Norton told me, “basically everyone says [they’d need] two or three times as much” to be perfectly happy.

Where did Norton find his rich people? For that particular study, an investment bank connected him with some of its high-net-worth clients. But Norton also told me that he had previously consulted with a pool of Dutch millionaires willing to respond to researchers’ questions, making themselves marginally richer in the process: For one study, Norton and his collaborator paid each respondent about 46 euros for every completed questionnaire. “You can run a survey on regular people for like a dollar,” he says.

Jeffrey Winters, a professor of political science at Northwestern University and the author of Oligarchy, said that in addition to social comparison, really rich people are often motivated to acquire more money by the thrill that comes with multiplying one’s fortune by making investments, buying up businesses, and so forth. “For those of us who make wages and have expenditures that we are trying to meet—a mortgage, pay our health insurance, food, whatever happens to be our kid’s tuition—we link the making of money to our expenses,” he says. Meanwhile, many ultra-wealthy people “use their money to make money,” he says—an exciting, status-enhancing process.

Those two ways of putting money to use—as a way of covering expenses or as a way of building a bigger fortune—come with two different points of diminishing returns. “Say you wanted to have a mega-yacht plus six mansions in six different locations around the world,” Winters says. “You could probably do all of that fairly comfortably with a few hundred million dollars.” It’s different if the goal is to keep accumulating, in which case “there’s no number at which you have enough,” Winters says. He adds, “Every billionaire I’ve spoken to, and I’ve spoken to quite a number of them, is extremely excited by each additional increment of money they make.”

Another expert I consulted, Brooke Harrington, a professor at the Copenhagen Business School who has studied and written about the financial practices of the super-wealthy, says that the question many rich people ask themselves about their money is not Do I have enough to buy this expensive thing I want? but rather Do I have as much or more than these people I’m comparing myself with?

“The sensation of ‘being well-off,’” she wrote to me in an email, “is not about fulfilling a childhood dream of buying a sailboat or something; feeling wealthy is about comparison with others in your reference group. So the question is not what individuals want to buy, but what they feel they must buy in order to keep up their status.”

The novelist Gary Shteyngart also has firsthand experience seeing how rich people think about their wealth. The protagonist of his recent novel, Lake Success, published a few months ago, is a New York financier, and in the course of researching the book, Shteyngart cultivated friendships with more than a dozen highly wealthy, mostly male hedge funders, the sorts of people who say they’re allergic to flying commercial and who hire chief financial officers to manage their family’s abundant wealth. “They’ve reached the point where you have all the money you ever really need for anything, and the things that they can buy are not that expensive compared to what they have,” he told me. “The gull-wing Tesla, the latest Tesla, I don’t know what it [costs], but it’s not that much if you have $100 million.”

One thing Shteyngart noticed after spending time with this crowd was how competitive they were. “They’d compete against one another on their Bloomberg terminals all day and then at the end of the day they would play competitive poker with each other,” he says; this spirit of one-upmanship pervaded even the donations they made to charities. Shteyngart speculates that underneath this competitiveness is a need to seem smarter and more capable than their peers: Managers of hedge funds can sometimes get rich from making one or two bets that had more to do with luck than anything else, which might make them feel like their intelligence is in question even if their money stands as evidence of their professional success.

Shteyngart also witnessed the hedge funders making the sort of social comparisons that Norton and Harrington described, treating money as a “scorecard.” He remembers one of them saying something along the lines of “We don’t have best-seller lists and book awards. What we have is this—the number at the end of the day.”

The whole experience did not leave Shteyngart feeling good. Here were people who could purchase anything they could ever want and whose wealth was widely envied, and even they weren’t content—just as these researchers studying happiness and wealth might have predicted. “At the end of the day,” Shteyngart told me, “I was just happy to end this research, because it was quite depressing.”