It is certainly true that money has diminishing returns. Think of it as an asymptotic function approaching a maximum level of happiness as income tends towards infinity.
However, it's also important to take into account the cost of living. That $400K/year figure (accounting for inflation), which marks something like 90% of the way up the asymptotic curve, is an average across the US. But if you're living in very expensive parts of the country, you need a good deal more than that in order to be able to afford a nice house, with separate bedrooms for all of the children that you (would like to) have, with a short commute, and then a bunch more in the way for child care, college tuition, maybe private school, extracurricular activities, and a whole host of others if you have those children.
To give you an anecdote, I know a guy who's making $500K/year and has all of those expenses, except he does not live in the city, and he's barely treading water. He's experiencing significant financial stress that more money would be a solution to. And this is at $500K/year, which is not quite enough to support his lifestyle.
Sorry if you make 500k and have financial problems you are either stupid or you fool others by complaining a lot. A lot of well off people complain about money all the time. I guess that's what motivated them to make more.
This doesn't make sense to me. Cities are the most expensive place to live, no? I would have thought that living in some small town and making 500k would give you even more buying power than it does in the city.
Where does your friend live that $500k does not pay for rent or a mortgage on a nice house, dinner at restaurants on a regular basis, and still money in the savings account?
You are severely underestimating how much it costs to put multiple kids through expensive colleges. Also, they don't live in "some small town", it's just not the city; it's still seriously expensive compared to the national home value.
But I'm not here to debate this other person's life choices, nor could I. The point is that even $500K/year is not enough for a decent number of people, whereas, say, $1M would be.
However, it's also important to take into account the cost of living. That $400K/year figure (accounting for inflation), which marks something like 90% of the way up the asymptotic curve, is an average across the US. But if you're living in very expensive parts of the country, you need a good deal more than that in order to be able to afford a nice house, with separate bedrooms for all of the children that you (would like to) have, with a short commute, and then a bunch more in the way for child care, college tuition, maybe private school, extracurricular activities, and a whole host of others if you have those children.
To give you an anecdote, I know a guy who's making $500K/year and has all of those expenses, except he does not live in the city, and he's barely treading water. He's experiencing significant financial stress that more money would be a solution to. And this is at $500K/year, which is not quite enough to support his lifestyle.