How Money Changes People and Affects Behavior
Discover how wealth transforms personality, behavior, and social interactions in surprising ways.
Money is often viewed as a neutral tool for purchasing goods and services, but decades of psychological research suggest something far more profound: wealth fundamentally alters how we think, feel, and behave toward others. The relationship between money and personality is complex and multifaceted, revealing uncomfortable truths about human nature and social inequality. Whether we like it or not, financial status appears to be one of the most powerful shapers of our character and conduct.
The Dark Side of Wealth: How Money Makes Us Less Empathetic
One of the most striking findings from recent psychological research is that as people accumulate wealth, their capacity for empathy and compassion appears to diminish. Paul Piff, an assistant professor of psychology and social behavior at the University of California, Irvine, has conducted extensive research into this phenomenon and found compelling evidence that wealth correlates with reduced concern for others.
According to Piff’s research, as a person’s wealth increases, their feelings of compassion and empathy go down, while their feelings of entitlement and deservingness increase. Wealthy individuals become less willing to take the perspective of another person and show decreased concern about another’s well-being. This isn’t a subtle effect—Piff describes the phenomenon bluntly: “Money makes you more likely to exhibit the characteristics of being a jerk.”
The psychological mechanism behind this shift appears to involve a fundamental change in how wealthy people view themselves and their place in society. Money creates a sense of self-sufficiency and superiority, leading individuals to believe they are more deserving of their success and less needful of others. This creates a dangerous feedback loop where wealth breeds isolation from the human experiences of those with less money.
The Monopoly Effect: How Success Warps Our Perception of Reality
One of the most revealing studies conducted by Piff involved a seemingly simple game: Monopoly. In this experiment, over 100 pairs of strangers were paired together to play the classic board game. However, the game was deliberately rigged to create artificial inequality.
One player in each pair was randomly assigned to be the “rich” player through a coin flip. This privileged player received twice as much starting money, collected twice the salary when passing go, and rolled both dice instead of one, allowing them to move significantly farther around the board. Hidden cameras observed these pairs play for 15 minutes.
The results were striking and illuminating. The wealthy players in the game began to exhibit increasingly arrogant behavior. They moved their game pieces more loudly and dramatically, banging them on the board with enthusiasm similar to a football player celebrating a touchdown. They consumed more pretzels from a communal bowl and became noticeably ruder to their opponents as the game progressed.
Most remarkably, when the game ended and players were asked about their success, the wealthy players’ understanding of what had transpired was completely warped. Despite the game being obviously rigged in their favor, they attributed their victory to their own superior skill and decision-making. They talked about how they had “earned” their success, apparently oblivious to the artificial advantages that had been granted to them through chance.
This phenomenon provides crucial insight into how the mind makes sense of advantage. When we benefit from circumstances beyond our control, our brains tend to rationalize our success as deserved, creating a distorted narrative that attributes good fortune to personal merit rather than systemic advantage.
Generosity Decreases With Wealth
Perhaps one of the most counterintuitive findings in money psychology is that poorer individuals tend to be more generous than wealthy ones, at least proportionally. Piff conducted several studies examining how people of different income levels share resources when given the opportunity.
Small-Scale Generosity
In one study, Piff brought both wealthy and poor community members into his laboratory and gave each participant the equivalent of $10. They were told they could keep the money for themselves or share a portion with an anonymous stranger.
The results were striking: participants who earned under $25,000 annually—and sometimes even those making as little as $15,000—gave away 44% more money to the stranger than those earning between $150,000 and $200,000 per year. This demonstrates that financial scarcity somehow cultivates a greater willingness to share, while abundance breeds hoarding behavior.
Large-Scale Generosity
When examining charitable giving on a larger scale, similar patterns emerge. Wealthy individuals tend to give less generously relative to their income, and their giving is often motivated by tax benefits or social status rather than genuine concern for others. Lower-income individuals, despite having fewer resources to spare, demonstrate greater proportional generosity and more altruistic motivations.
The Ethics Problem: Wealth and Moral Compromise
Beyond reduced empathy and generosity, research shows that wealthy individuals are more likely to compromise their ethics when financial incentives are present. Piff’s research has found that wealthier individuals are more likely to moralize greed and self-interest as favorable traits. They are less likely to be prosocial and more likely to cheat and break laws if doing so serves their financial interests.
This suggests that wealth doesn’t just reduce empathy—it actively restructures moral reasoning. Wealthy people increasingly view selfish behavior not as a character flaw but as a rational and justified response to the world. Success in financial markets, which often rewards ruthless self-interest, reinforces these moral frameworks.
Driving Behavior Reveals Character
One striking area where wealth manifests in observable behavior is driving. Piff’s research found that wealthy drivers are significantly more likely to cut off other vehicles and violate traffic laws. This seemingly mundane finding is actually revealing—driving behavior provides a window into how money affects our willingness to prioritize our own convenience over others’ safety.
The relative anonymity of driving combined with the power dynamics of controlling a larger vehicle appears to amplify the entitlement that wealth creates. Wealthy drivers treat traffic laws as mere suggestions rather than rules that apply equally to everyone, viewing themselves as above the constraints that bind ordinary citizens.
How Poverty Affects the Mind
While wealth appears to reduce empathy and promote self-interest, poverty creates an entirely different psychological challenge: it impairs cognitive function. Research by Sendhil Mullainathan, Eldar Shafir, and colleagues examined how financial stress affects mental performance.
In one particularly illuminating study, farmers’ cognitive function was measured a month before and after their harvests. Before harvest, when cash was tight, the same farmers performed significantly worse on cognitive tests. Their IQ scores were 9-10 points lower before harvest than after, a cognitive decline equivalent to an entire night without sleep.
In another component of the research, poor and wealthy participants were asked to think about their finances before taking cognitive tests. Poor participants’ performance declined measurably when thinking about money, while wealthy participants showed no such effect. This suggests that the cognitive load of financial worry consumes mental resources that could otherwise be directed toward problem-solving and decision-making.
The Emotional Intelligence Gap
Interestingly, while wealth reduces empathy, poverty appears to enhance emotional intelligence. Studies have found that lower-class participants are better able to read faces and detect emotional expressions in others. They demonstrate superior ability to understand what others are feeling—a core component of emotional intelligence.
The survival advantage of this skill is evident: those with fewer material resources must rely more heavily on social bonds and the ability to navigate complex relationships. Reading others’ emotions becomes a practical necessity rather than a luxury. However, there is hope for wealthy individuals: when upper-class participants were asked to imagine themselves in the position of lower-class people, their ability to detect others’ emotions improved significantly, suggesting that perspective-taking can counteract the emotional blindness that wealth creates.
Understanding Money Psychology and Personal Development
The psychological impact of money extends beyond how we treat others. Our personal relationship with money is shaped by early experiences, family influences, and societal expectations. Financial habits and attitudes are learned, not inherent, and understanding these patterns is essential for building a solid financial foundation.
How Money Habits Develop
Our relationship with money typically begins in childhood, influenced by the financial environment we grew up in. Children who experience financial struggle may develop fear around money or a tendency to hold tightly to resources. Conversely, those raised in wealthy environments that emphasize financial success as a measure of personal worth may develop different spending and saving patterns.
These early lessons create the foundation for our financial mindset and continue influencing our decisions throughout adulthood. Understanding the “why” behind our financial behaviors is the first step toward making lasting changes.
Changing Negative Money Habits
The good news is that negative financial habits can be changed once awareness develops. Many people operate on autopilot, unaware of the emotions driving their financial decisions, whether overspending during stress or avoiding saving because it feels uncomfortable.
Creating change requires small, consistent actions focused on manageable habits that align with genuine financial goals. Building awareness and practicing intentional decision-making around money can gradually shift both mindset and behavior. Some practical steps include:
- Reflecting on your money history and understanding where your habits originated
- Recognizing emotional spending triggers and practicing mindfulness to avoid impulse decisions
- Setting financial goals based on personal values rather than societal pressure
- Aligning financial actions with personal priorities and continuously learning and improving
The Silver Lining: Small Nudges Can Restore Empathy
While the research on wealth and behavior might seem discouraging, there is an important finding that offers hope. According to Piff, it doesn’t take much to counteract the psychological effects of wealth. Small nudges in certain directions can restore levels of egalitarianism and empathy.
Simply reminding wealthy individuals of the benefits of cooperation or community can prompt them to act just as egalitarian as poor people. This suggests that the effects of money on behavior are not permanent or immutable—they can be consciously counteracted through intentional effort and perspective-shifting exercises.
The Broader Implications for Society
The research on money and behavior has profound implications for understanding social inequality. As wealth increases, self-interest perpetuates, potentially widening the gap between rich and poor. Wealthy individuals, feeling more deserving and less needful of others, may be less inclined to support policies that redistribute wealth or strengthen social safety nets.
This creates a troubling cycle: those with the most resources and political influence are psychologically predisposed toward self-interest and away from concerns about collective welfare. Understanding this dynamic is crucial for anyone interested in addressing inequality and building more cohesive societies.
Frequently Asked Questions
Q: Does all wealth lead to negative behavioral changes?
A: While research shows correlations between wealth and reduced empathy, not all wealthy individuals exhibit these traits. Individual values, upbringing, and conscious effort can counteract these tendencies. The research describes statistical patterns, not inevitable outcomes.
Q: Can wealthy people recover their empathy?
A: Yes. Research shows that simple interventions like reminders about community benefits or perspective-taking exercises can restore empathy and egalitarian thinking in wealthy individuals.
Q: Is poverty responsible for poor decision-making?
A: Poverty creates cognitive load through financial worry, which can temporarily impair decision-making. However, this is not a permanent condition—when financial stress is relieved, cognitive function typically returns to normal levels.
Q: How can I avoid negative money behaviors?
A: Maintain awareness of your money habits and their origins, set values-based financial goals, practice perspective-taking, and intentionally cultivate empathy and community connection regardless of your financial status.
Q: Does this research mean wealthy people are inherently bad?
A: No. The research describes psychological effects of money on behavior, not fixed character traits. All humans struggle with competing motivations between self-interest and concern for others—money simply shifts this balance.
References
- Wealth Affects Driving and Other Behaviors, Research Says — University of California, Irvine, Department of Psychology and Social Ecology. May 19, 2017. https://ps.soceco.uci.edu/news/wealth-affects-driving-and-other-behaviors-research-says
- 6 Studies on How Money Affects the Mind — TED Blog. https://blog.ted.com/6-studies-of-money-and-the-mind/
- Money Psychology: Understanding Your Relationship with Money — Cape Cod Five. https://www.capecodfive.com/resources/money-psychology
- The Psychology of Wealth, Empathy, and Entitlement — American Psychological Association. https://www.apa.org/news/podcasts/speaking-of-psychology/wealth-empathy
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