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The Relationship Between Money and Happiness

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Charting the Relationship Between Money and Happiness

Charting the Relationship Between Money and Happiness

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Can money buy you happiness?

It’s a longstanding question that has many different answers, depending on who you ask.

Today’s chart approaches this fundamental question from a data-driven perspective, and it provides one potential solution: money does buy some happiness, but only to a limited extent.

Money and Happiness

First, a thinking exercise.

Let’s say you have two hypothetical people: one of them is named Beff Jezos and he’s a billionaire, and the other is named Jill Smith and she has a more average net worth. Who do you think would be happiest if their wealth was instantly doubled?

Beff might be happy that he’s got more in the bank, but materially his life is unlikely to change much – after all, he’s a billionaire. On the flipside, Jill also has more in the bank and is likely able to use those additional resources to provide better opportunities for her family, get out of debt, or improve her work-life balance.

These resources translate to real changes for Jill, potentially increasing her level of satisfaction with life.

Just like these hypotheticals, the data tells a similar story when we look at countries.

The Data-Driven Approach

Today’s chart looks at the relationship between GDP per capita (PPP) and the self-reported levels of happiness of each country. Sources for data are the World Bank and the World Happiness Report 2017.

According to the numbers, the relationship between money and happiness is strong early on for countries. Then later, when material elements of Maslow’s hierarchy are met, the relationship gets harder to predict.

In general, this means that as a country’s wealth increases from $10k to $20k per person, it will likely slide up the happiness scale as well. For a double from $30k to $60k, the relationship still holds – but it tends to have far more variance. This variance is where things get interesting.

Outlier Regions

Some of the most obvious outliers can be found in Latin America and the Middle East:

Latin America vs. Middle East

In Latin America, people self-report that they are more satisfied than the trend between money and happiness would predict.

Costa Rica stands out in particular here, with a GDP per capita of $15,400 and a 7.14 rating on the Cantril Ladder (which is a measure of happiness). Whether it’s the country’s rugged coastlines or the local culture that does the trick, Costa Rica has higher happiness ratings than the U.S., Belgium, or Germany – all countries with far higher levels of wealth.

In the Middle East, the situation is mostly reversed. Countries like Saudi Arabia, Qatar, Iran, Iraq, Yemen, Turkey, and the U.A.E. are all on the other side of the trend line.

Outlier Countries

Within regions, there is even plenty of variance.

We just mentioned the Middle East as a place where the wealth-happiness continuum doesn’t seem to hold up as well as it does in other places in the world.

Interestingly, in Qatar, which is actually the wealthiest country in the world on a per capita basis ($127k), things are even more out of whack. Qatar only scores a 6.37 on the Cantril Ladder, making it a big exception even within the context of the already-outlying Middle East.

Nearby Saudi Arabia, U.A.E., and Oman are all poorer than Qatar per capita, yet they are happier places. Oman rates a 6.85 on the satisfaction scale, with less than one-third the wealth per capita of Qatar.

There are other outlier jurisdictions on the list as well: Thailand, Uzbekistan, and Pakistan are all significantly happier than the trend line (or their regional location) would project. Meanwhile, places like Hong Kong, Ireland, Singapore, and Luxembourg are less happy than wealth would predict.

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Mapped: The Top 10 Billionaire Cities

Where do the most billionaires live? For years, NYC has topped the list of billionaire cities, but 2020 marked a monumental shift.

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Mapped: The Top 10 Billionaire Cities in 2020

In 2020, the world gained 493 new billionaires—that’s one every 17 hours.

For the last seven years, New York City has been home to more billionaires than any other city in the world. However, last year marked a monumental shift in the status quo.

Beijing has unseated the Big Apple, and is now home to 100 billionaires. That’s one more billionaire than the 99 living in New York City.

Today’s map uses data from Forbes to display the top 10 cities that house the most billionaires.

Where do the Most Billionaires Live?

The richest of the rich are quite concentrated in cities, but some cities seem to best suit the billionaire lifestyle. Here’s a breakdown of the top 10 billionaire capitals and the collective net worth of all the ultra wealthy that live there.

RankCityRegionNumber of BillionairesNet Worth of the City's Billionaires
#1Beijing🇨🇳 Asia100$484.3B
#2New York City 🇺🇸 North America99$560.5B
#3Hong Kong🇨🇳 Asia80$448.4B
#4Moscow🇷🇺 Europe79$420.6B
#5Shenzhen🇨🇳 Asia68$415.3B
#6Shanghai 🇨🇳 Asia64$259.6B
#7London 🇬🇧 Europe63$316.1B
#8Mumbai🇮🇳 Asia48$265.0B
#9San Fransisco🇺🇸 North America48$190.0B
#10Hangzhou🇨🇳 Asia47$269.2B

Some cities have some obvious billionaires that come to mind. New York’s richest person and former mayor, Michael Bloomberg, is worth $59 billion. Beijing’s richest billionaire is the founder of TikTok (among other things), Zhang Yiming with a net worth of $35.6 billion.

In terms of the locations themselves, London, New York, and San Francisco are the only Western cities to make the list. Though New York was ousted from the top position last year, altogether the city’s billionaires are still worth more than Beijing’s.

One new city to make the top 10 list of billionaire cities was Hangzhou, the home of Jack Ma. It booted out Singapore from the 10th spot.

East Meets West

More than half of the top 10 cities are located in Asia, providing evidence of the shift eastwards when it comes to seats of wealth. Five of the six Asian cities listed are all in China.

What’s helped lead to this?

The country has seen an e-commerce boom, not in the least thanks to the pandemic. Additionally, the efficient handling of COVID-19 has allowed the economy to get back on track much more quickly than other countries. According to the BBC, 50% of China’s new billionaires have made their wealth either through tech or manufacturing.

Four of the Chinese cities on the list also had the biggest billionaire growth in 2020. Each of them gained more than 10 net new billionaires:

  • 🇨🇳 Hangzhou: 21
  • 🇨🇳 Shanghai: 18
  • 🇨🇳 Shenzhen: 24
  • 🇨🇳 Beijing: 33

The only other city to gain more than 10 new billionaires in 2020 was San Francisco with 11.

Now sitting at 698 billionaires, China is coming up on the 724 held by the United States. Beijing overtaking NYC could be the beginning of a larger tipping point.

Shifting Tides

Asia-Pacific’s collective 1,149 billionaires are worth $4.7 trillion, while U.S. billionaires are worth $4.4 trillion in total wealth.

Overall, it looks like the wealth tides may be turning as China continues to progress economically and more billionaires become based in the East over the West.

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Money

Visualized: The Richest Families in America

The net worth of the 50 richest families in America combines for $1.2 trillion. Here’s how multi-generational family wealth stacks up in the country.

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Visualizing the Richest Families in America

When we think about the richest people in America, individual names often come to mind like Elon Musk, Jeff Bezos, and Bill Gates. But often, it’s the richest families in America that hold a deeper legacy, and sometimes, even deeper pockets.

The country’s 50 richest families hold a collective wealth of $1.2 trillion. This ranking goes beyond nuclear family units and self-made fortunes, and it instead measures the wealth of multi-generational or extended families.

Our visualization, which leverages the latest data from Forbes, reveals the wealthiest families in America and the enterprises that helped them earn their billions.

Editor’s note on methodology: in this ranking, Forbes leaves out self-made entrepreneurs that appear with their nuclear families on the billionaires list. For example, Jeff Bezos founded Amazon and Rupert Murdoch founded News Corp, but these successes did not come from family wealth that was passed down to them.

Family Matters

Say the name Rockefeller or Vanderbilt, and everyone knows who you’re talking about—but how do these household names hold up in the modern rankings?

Below are the 50 richest families in America, based on net worth:

RankFamilyNet WorthOrigin of Wealth 
#1Walton Family$247.0BWalmart
#2Koch Family$100.0BKoch Industries 
#3Mars Family$94.0BMars Inc. 
#4Cargill-MacMillan Family$47.0BCargill Inc. 
#5Lauder Family$40.0BEstee Lauder 
#6S.C. Johnson Family$37.0BSC Johnson
#7Edward Johnson Family$36.0BFidelity
#8Cox Family$34.5BCox Enterprises
#9Pritzker Family$32.5BHyatt Hotels
#10Newhouse Family$30.0BCondé Nast
#11Duncan Family$22.0BEnterprise Products Partners L.P. 
#12Hearst Family$21.0BHearst Corporation
#13Brown Family$20.4BBrown–Forman
#14Marshall Family$18.5BKoch Industries (6% stake)
#15Butt Family$17.8BH-E-B
#16Busch Family$17.6BAnheuser-Busch
#17Du Pont Family$16.0BDuPont
#18Hunt Family$15.5BHunt Oil and Petro-Hunt
#19Dorrance Family$15.0BCampbell Soup Co. 
#20Ziff Family$15.0BZiff-Davis
#21Cathy Family$14.2BChick-fil-A
#22Stryker Family$14.0BStryker
#23Goldman Family$13.2BReal Estate
#24Rollins Family$13.1BOrkin Pest control
#25Gallo Family$12.4BE&J Gallo Winery
#26Reyes Family$12.0BReyes Holdings
#27Kohler Family$11.7BKohler Co.
#28Mellon Family$11.5BBanking
#29Smith Family$11.3BIllinois Tool Works, Northern Trust
#30Bass Family$10.8BOil 
#31Sackler Family$10.8BPurdue Pharma
#32Johnson Family$10.7BJohnson & Johnson
#33Marriott Family$10.4BMarriott International 
#34Crown Family$10.2BInvestments
#35Hughes Family$10.2B Public Storage Inc.
#36Pigott Family$10.1BPaccar
#37Shoen Family$9.0BU-Haul
#38Fisher Family$8.9BGap Inc. 
#39Jenkins Family$8.8BPublix Super Markets 
#40Chao Family$8.6BWestlake Chemical Corp.
#41(Charles & Rupert) Johnson Family$8.6BFranklin Resources Inc. 
#42Phipps Family$8.6BCarnegie Steel, Bessemer Trust
#43Rockefeller Family$8.4BStandard Oil
#44E.W. Scripps Family$8.4BScripps Network Interactive
#45Bechtel Family$8.3BBechtel
#46Gore Family$8.2BGore-Tex
#47Durst Family$8.1BReal Estate
#48Taylor Family$7.8BEnterprise Rent-A-Car
#49Simplot Family$7.7BSimplot
#50Barbey Family$7.3BVF Corp

The richest family in the U.S. is the Waltons, founders of Walmart. Their net worth adds to an approximate $247 billion, making them also the richest family in the world. Over the last year, they’ve grown their family fortune by $25 billion, equal to nearly $3 million per hour.

Interestingly, the Vanderbilts—the railroad tycoons that were once the richest family in the country in the late 19th century—have been ousted from the rankings entirely. Other notable American families, like Ford and Astor, have lost their place on the list as well.

On the other hand, the Rockefellers still hold their status today, ranked at number 43 with a net worth of $8.4 billion. John D. Rockefeller became America’s first billionaire back in 1916, despite the breaking up of Standard Oil for antitrust reasons.

Building Wealth

Over the last five years, nearly every family on this list has seen wealth increase. Many of the behemoth companies on which these families built their fortunes are staples in America, like Campbell’s Soup, Cargill, Dixie Cups, Estee Lauder, and M&Ms and Snickers.

For example, the South’s beloved fast food chain, Chick-fil-A, was founded by the Cathy family and generated $12.67 billion in sales as of the latest annual data, making it the third most popular chain restaurant in the country.

Some of the newer families to make the list also owe it to the success of their enterprises:

  • The Kohler family: Kohler Co. (manufacturers of kitchenware, plumbing products, furniture, etc.)
  • The Taylor family: Enterprise Rent-A-Car (car rental services)

However, a few families have experienced significant losses since the last Forbes ranking. Here’s a look at some notable net worth decreases:

FamilyCompanyChange in Net Worth from 2015-2020
HearstHearst Corporation$-7.0B
RockefellerStandard Oil $-2.6B
SacklerPurdu Pharma$-2.2B
FisherGap Inc.Negative growth (exact $ amount unknown)
Johnson (Charles and Rupert)Mutual FundsNegative growth (exact $ amount unknown)

Purdue Pharma recently filed for bankruptcy. The Sackler family’s plan is to reformulate the company into a new venture whose profits would go towards the opioid crisis, for which they are largely blamed. It would also cost the family around $4.3 billion directly.

Keeping it in the Family

While some families may have experienced decreases in their wealth, for many this is just a small bump in the road.

Overall, the richest families in America are the keepers of immense wealth that has accumulated over generations. For some, their names are now cultural landmarks across the U.S. and their brands have become synonymous with life in America.

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