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Why do ultra-wealthy people want more money?

Why do billionaires love money so much? Image: Getty

The United Nations says it will cost AU$435 billion (US$300 billion) to pause climate change for 20 years.

This was a point observed in a now-viral tweet from TIME editor-at-large, Anand Giridharadas. 

Giridharadas compared that cost with the $1.7 trillion gained by the wealthiest 500 people in 2019 which pushed their collective net worth to a whopping $7.2 trillion, up 25 per cent from 2018. 

The tweet triggered a storm of replies. Some questioned whether billionaires should exist in modern economies, others argued the case for a wealth tax - as has been proposed by US presidential candidates Elizabeth Warren and Bernie Sanders

Others observed that net worth doesn’t always mean liquid funds. 

But the question stands: as a growing number of people accrue more money than could ever be used, what’s stopping them from spending it? 

And in the face of continued scrutiny of billionaires from the likes of Warren and Sanders, why the relentless quest to continue gaining wealth?

What’s going on? 

Harvard Business School professor Michael Norton has studied the links between wealth and happiness. 

“Research shows that income is positively correlated with happiness, especially as people move from worrying about having enough to meet their basic needs to feeling more financially secure,” he told Yahoo Finance. 

A study from Purdue University found that happiness increases with wealth up until a point: when you reach $108,000 you’ll be at your highest level of emotional wellbeing, and when you reach an income of $137,000 you’re likely at the happiest you’ll be in terms of life satisfaction.

After this point, increases in income tend to come with lower happiness.

And while Norton noted that spending money on charity and gifts also contributes more to happiness than purchasing material goods, that still isn’t always enough to get the rich to lower their wealth profile. 

“One of the key drivers of people’s desire for wealth (and material possessions) is the innate human tendency to compare ourselves to others – and to try to win,” Norton said. 

According to entrepreneur and author of The Unlikely Entrepreneur Alan Manly, ambition is one of the keys to business success. 

“If you're going to work and going to be successful, you'll have to be committed,” Manly said. 

When that ambition is applied to accruing wealth, we begin competing by comparing cars, clothes, houses and private jets, at a certain point, everyone in your peer group has all of those. By this stage, spending is no longer the point of the competition.

As Amazon founder and world’s richest man Jeff Bezos said of the difficulties spending his massive fortune: “You're not going to spend it on a second dinner out.”

The world's richest man and Amazon founder Jeff Bezos. Image: Getty

Business Insider analysis found that for the average billionaire with a fortune of $2.9 billion, $1,964 is to them what $1.45 is to the average American. 

That means that the average billionaire with, a$1,723 dinner for two at renowned restaurant Masa in New York City would cost a comparative $1.30. 

And a $34,792 first class, roundtrip ticket from New York to Sydney on Etihad Airways would cost a relative$25.67 to such a billionaire. 

So when you not only have the best-of-the-best - but the-best-of-the-best in bulk - where do you go from there? 

That’s when you start competing based on the sheer size of your wealth. 

“When people make more income, they also tend to move to places where others make more income, and so the only way to claim ‘victory’ is to keep making more money,” Norton said.

In a feature for the New York Times in 2007, Gary Rivlin described Silicon Valley as “thick with those who might be called working-class millionaires” - many wealthy people simply don’t consider themselves wealthy due to the massive wealth they’re surrounded by. 

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