The Link Between Money and Behavior

This post may contain affiliate links. FinanceSuperhero only recommends products which help Restore Order to the World of Finance.

The suggestion that money and behavior are forever linked is likely to elicit some very strong opinions on both sides of the debate. A majority of people base their position upon personal experience, as is the case with many debates.

Many people argue that wealthy people lack compassion and therefore do not behave charitably. Others protest that wealthy people make the vast majority of charitable contributions. The trouble is that both arguments are equally valid depending upon one’s perspective and specific circumstances.

Is there a link between money and behavior? The answer may surprise you.

Money Augments Existing Character

In 1940, during the early stages of WWII, a businessman acquired a company nicknamed “Emalia.” The company produced enamel cookware for the nation’s military. This businessman initially sought the cheapest labor available in an effort to maximize his profit margins. An already wealthy man appeared to grow even wealthier in the process.

When the violence and destruction of war threatened the well-being of his operation, the businessman sought government support to move his factory to another location. Many of his cheap laborers were rerouted to alternate locations, which caused the businessman to endure great financial loss to regain his labor force.

Following the factory relocation, Emalia ceased production of enamelware and began producing artillery shells to support the war effort. When the military questioned the factory’s low output of useful artillery, the businessman began purchasing finished inventory on the black market and reselling it as his own.

When government appointees caught on to this businessman’s deception, he sought their silence and secrecy through bribery. By the end of the war, this businessman had spent his entire fortune – reportedly in excess of $1 million – on relocation, bribes, maintaining his “cheap” workforce, and the purchase of black market goods.

Who was this man?

Oskar Schindler.

Schindler exemplified a positive connection between money and behavior.
Oskar Schindler (Credit: )

To Nazi sympathizers, Schindler was a traitor and war criminal who used his wealth to defy his political party and commit despicable acts of cowardice. To the rest of the world, he was a noble hero who, despite his flaws, used his position of wealth to save the lives of an estimated 1,200 persecuted Jews.

Despite living a life of drunkenness and adultery, Oskar Schindler’s vast wealth amplified his character and led him to risk his entire fortune, even his life, to save the lives of Jews. In his case, we may observe that money changes behavior for the better by bringing out a person’s true colors. After all, Schindler did what he was best at – lying, swindling, cheating, and bribing – while nobly sacrificing his wealth to save lives.


In the end, neither Oskar Schindler’s money nor behavior alone would have been enough. It was his money and behavior which saved the lives of Jews.

Admittedly, this is perhaps an extreme example, yet it provides a memorable illustration of an important truth: money augments existing character.

Money Does Not Change Everyone

For many people, money and behavior are linked, and often with negative consequences. However, money does not change everyone. Most of us learned this lesson at a very young age through literature and film. I learned it through a reading of Roald Dahl’s timeless book Charlie and the Chocolate Factory and the 1971 Gene Wilder film Willy Wonka and The Chocolate Factory.

As you may recall, the film version takes liberty with the character of Arthur Slugworth, a candy-making rival of Wonka. Slugworth attempts to bribe all of the children who find Golden Tickets into providing him an Everlasting Gobstopper so he can uncover the secret formula and ruin Wonka forever. When Slugworth encounters our protagonist, Charlie Bucket, in a dark alley, he provides Charlie’s first test of character.

“Now listen very carefully because I’m going to make you very rich indeed… So all I want you to do is get a hold of one Everlasting Gobstopper. . . Think it over, will you? A new house for your family. Good food and comfort for the rest of their lives.”

Charlie and Grandpa Joe enjoy a fanciful visit to Wonka’s chocolate factory, and at the end, Willy Wonka probes Charlie for a link between money and behavior. After being informed that Charlie has lost his right to a lifetime supply of chocolate due to stealing fizzy lifting drinks, an incredulous Grandpa Joe shows his true colors.


“How could you do something like this, build up a little boy’s hopes and then smash all his dreams to pieces? You’re an inhuman monster. . . Come on, Charlie. Let’s get out of here. I’ll get even with him if it’s the last thing I ever do. If Slugworth wants a Gobstopper, he’ll get one.”

In a shining moment in film, Charlie Bucket displays an uncommon display of youthful character and returns the Gobstopper. Willy Wonka drops his act and whispers, “So shines a good deed in a weary world.” After apologizing to Charlie for putting him through a trying ordeal, Wonka reveals that “Slugworth” is really Mr. Wilkinson, a Wonka employee.

Yes, perhaps I have gone to the opposite extreme now in pulling an example from film, but Charlie Bucket’s example reveals that money and behavior are not linked in all people.

Three Steps to Build Positive Connections Between Money and Behavior

In light of the previous analyses, it appears to be reasonable to conclude that people should strive to maximize the positive connections between money and behavior while minimizing or eliminating altogether the negative connections.  Of course, this requires tremendous personal discipline, but I believe it can be done by actively seeking to apply the following three action steps to build positive connections between money and behavior:

1. Do not withhold money from those in need

While I won’t advocate that you give away your entire nest egg a la Oskar Schindler, I will challenge you to increase your charitable giving right away. Furthermore, when your income increases, increase your giving in corresponding fashion. For example, if you currently contribute 2% of your annual earnings to charity, be sure that you continue to contribute that same percentage after receiving a raise.

2. Do not find your happiness in money

Despite our human instincts which seek to convince us otherwise, there is not a linear relationship between money and happiness. Researchers have not yet established solid proof that money can or cannot buy happiness; in fact, research over the past ten years reveals that behavioral psychologists may be more divided on this issue than ever before.

Perhaps the link between money and happiness does not lie within how much money or how many possessions one possesses, but instead lies in purposefully managing the money  and possessions which pass through his hands.

3. Do not allow yourself to be defined by money

If you allow money to define you, you are constructing a fragile glass house. Instead, live a life of introspection and view any excess money as a means to make a contribution to society.


Ultimately, whether you allow yourself to develop negative links between money and behavior is a personal matter. Wherever you find yourself on the spectrum, from rags to riches or somewhere in between, money will always seek to bring out the best and worst in you. By allowing money to augment but not change your existing character, you will be well on your way toward cultivating the positive connections between money and behavior.

What have your personal experiences taught you regarding the connection between money and behavior? What challenges do you face in cultivating positive connections between money and behavior?


9 thoughts on “The Link Between Money and Behavior

  1. What a fascinating post, I loved it and the great message behind it! I think the key is being cognizant of the risk for money to change behavior. It certainly happens to many people and I’ve heard plenty of stories. I think it’s important to stay true to yourself and like you said, not be defined by money. But I’m aware of the risk and actively trying to ensure money won’t ever change my behavior.

  2. Compelling post, Hero – nice work!

    To your point re money and happiness, there is some research showing that people who give charitably (i.e., spend money on others) tend to derive greater happiness than people who spend the same amount of money on themselves. I think this supports some of the themes here.

    I would also point out, though, that charitable giving represents a decidedly gray area in most economic theory. Sometimes the deadweight losses associated with charitable gifts exceed those gifts’ benefits, leading to worse outcomes for everyone. Sometimes the presence of gifts misaligns incentives and leads to undesirable behaviors on the parts of givers and recipients. Economic study into the results of foreign aid to Africa is illustrative of some of the many pitfalls of charitable giving – and shows how hard it is to overcome them.

    Which is to say I’m not sure that charitable giving is always the best way to use money for societal good. (It can even be troublesome.) Here’s a question: Is it better to give $50 per day to someone free and clear of obligations; or is it better to pay someone $50 per day in exchange for valuable work? What benefits the recipient more, and what benefits society more?

    Regardless, your post is great work – a compelling read and really nicely done. Thanks, Hero!

  3. We face a lot of people asking for money here in our city, and it’s challenging because you want to help people but you know it’s probably hurting them through fueling addiction or other destructive habits. i think it’s important to stay generous but don’t reward bad behavior through giving cash to panhandlers, just a thought

  4. Great post! I feel like money and alcohol are the two most surefire ways to amplify the person that you already are deep down.

    I agree completely on donating money right now. I think it was Tony Robbins in Money: Master the Game that said if you won’t donate ten cents from your dollar, you’re not going to donate $1 million from your $10 million. I had been telling myself that I would donate when I had more, but after reading that I decided to start donating a little bit from each paycheck and build from there.

  5. That was a really nice post! I always try to tip well for good service and give generously to charitable causes (FinancialLibre’s comments notwithstanding). Just because I am trying to be thrifty and work towards FI, I don’t think I should push my problems on other people!

    It’s an interesting paradox I think. You might think that people working towards FI are obsessed with money or tightwads. In my experience, they are generous people who are more interested in living fulfilling lives and not being obsessed by money.

    Tightwads are just tightwads and are not necessarily interested in FI. Anyway, a tangential point to your article, but it got me thinking.

    1. That’s funny Jon because I was thinking the same thing about money, giving and tightwads. I think you can get so focused on your “number” that it would be tempting to limit giving. But as Hero said, if you get an increase in pay – make sure to increase your giving as well. Love the depth of the post too – and you did realize it was #RonaldDahl day yesterday right? Saw that on Twitter for his birthday!

  6. Excellent post! I love the three takeaways at the end and really couldn’t agree more. I just think if I had a big raise but everything else stayed the same would that really make me happier? Doubtful. Instead pursuing things that I know right now make me happy is much a better route.

  7. I got busy and haven’t been able to comment as frequently on other blogs, but gosh have I missed out on yours. Thought-provoking as always.

    As someone who is fascinated in behavioral economics, I’ve spent a lot of time reading about what ‘level’ of wealth makes people happy. A lot of what I’ve read is simply once people get past basic subsistence, they start to face heavy diminishing marginal returns on money, and start to see more utility out of experiences – be it physical or emotional ones.

    Ultimately though it’s just a fascinating field. A field I hope continues to look deeper into the psychology of money.

  8. We have a line in our budget for charitable giving- it reminds us to be generous. Selfishly, we have found we benefit from being generous, because of the feel good factor from giving. Also, we try to make concious decisions about the charities we donate to and what impact our donation could make, and this makes areas of excess in our lives more transparent which leads to wasting less money on “stuff”.

Leave a Reply

Your email address will not be published. Required fields are marked *