How Much is Enough? On Average, About $75,000 Per Year
Published on - September 16th, 2010 (by Sierra Black) This post is from staff writer Sierra Black. Sierra writes about frugality, sustainable living, and getting her kids to eat kale at Childwild.com.
A few weeks ago I wrote about how money really can buy happiness — if you spend it right. A big-screen TV isn’t a ticket to happiness, but a vacation might be. Giving your money away can boost your well-being, and so can investing it in time with your family.
A new study from Princeton hangs a price tag on that happiness: $75,000 [PDF summary]. That’s the annual household income that gives you the most joy for your buck. People with incomes below that magic number report less happiness, overall, than those at or above it.
The effect levels off after $75,000, though. As your income increases, your cheerfulness also increases, but the good cheer plateaus around $75,000. Another $25,000 a year — or even another $100,000 a year — will make you richer, but it won’t make you much happier.
The magic number?
It’s not that $75,000 is enough money to let you buy anything you want. Anyone supporting a family on that salary knows you still have plenty of careful budgeting to do. Rather, it’s that Stuff doesn’t make you happy. A bigger income buys you more Stuff, but the emotional satisfaction of having it wears off quickly.
Why $75,000? Because that’s the magic number at which most Americans can pay their basic living expenses and have a little something left over for the good things they want in life. Or, as the Nobel-prize winning research team who ran the study put it:
More money does not necessarily buy more happiness, but less money is associated with emotional pain. Perhaps 75,000 dollars is a threshold beyond which further increase in income no longer improve individuals’ ability to do what matters most to their emotional well-being, such as spending time with people they like, avoiding pain and disease, and enjoying leisure.
They’re talking about the sense of day to day joy that comes into your life when you have Enough. If you’ve read Your Money or Your Life, you surely recall their graph of how money affects our moods. From poverty up through plenty, they chart a curve. At the peak, you have Enough: your living expenses are covered, your future is secure, and you have some fun money to spend on the things you enjoy.
Beyond Enough, the curve dives downward into clutter, stress, competition and an array of other sorry outcomes.
Note: This is J.D.’s representation of the Fulfillment Curve from Your Money or Your Life.
This new study’s findings would seem to contradict this curve.
Sadly for us frugal types, the researchers didn’t find that to be true. Accruing more money won’t make you happier on a day-to-day basis, but the super-rich do score higher than the middle class on another axis of happiness.
Life assessment
The technical term for this one is “life assessment”, and it simply means how satisfied with your life you are overall. The wealthy see themselves as more successful than the middle class do even though their wealth doesn’t bring them joy.
Partly that’s because wealth allows them to achieve more of their dreams. I’d bet that part of it, too, is simply the high value our culture places on being rich. If everyone around you is striving to die with the biggest bank account, and you have it, you feel like a winner.
You don’t have to be super-rich to achieve your dreams and be satisfied with your life, though. Many people do that even on a fraction of the $75,000 it takes to get most of us to the Enough place.
They do it by knowing what they want, being disciplined with what they have, and celebrating their achievements. They’ve stepped far enough out of the cycle of consumption to stop wanting More More More all the time. They have Enough, at whatever salary they’re earning.
How do you find your own personal money Enough?
How much is Enough?
Knowing where you are is, as Your Money Or Your Life makes clear, essential. You need to know how much you earn, how much you have in assets and liabilities, and how much you’re likely to make during your career. You need to know this because without it, you can’t get clarity about what you want.
Knowing your net worth doesn’t automatically get you that clarity, though. You need to set an intention. For me, that process started with a brainstorming session with my partner. We laid out three categories of financial priorities:
- Laying a foundation. These are the essentials of good financial hygiene: being out of debt, providing for our future, covering all our basic living expenses.
- Quality of life. This category included things we value but don’t need to survive, like a good education for our children. We’d be unhappy if we couldn’t pay for our Quality of Life priorities, but not in danger of homelessness.
- Beyond the basics. This was the daydream category. It includes things like travel and giving to charity. All the things I love to do, but often can’t because I’m putting my dollars into those first two layers of financial life.
Once we’d created this blueprint for managing our money, we got real specific. We want to fund our retirement. Great. How much do we need to retire on? What resources do we have to create that nest egg? We want our kids to have a great education. Great. What kind of education? How much will that cost?
By being specific about what we wanted, we were able to put a price tag on each of our goals. An overall picture emerged of what Enough would mean for us. In the parlance of this research I’ve been discussing, we were able to see what it would cost to buy our vision of happiness.
About $80,000 a year. Since we live in a fairly high cost-of-living city, so this number is well within range of the $75,000 Princeton’s scientists came up with when looking at the whole country.
The number is beside the point, though. What matters is the exercise of understanding your priorities, and knowing what your dreams cost. Whether you do this and discover that your personal Enough is $30,000 or $300,000, you’ll be better off for having a clear sense of what you’re striving for, financially.
I distilled all that complex brainstorming and math into a single index card. I keep it on my desk. It says, “My money Enough” at the top, and then lists the goals I’m working towards. It’s an inspiration when I’m tempted to slack off on my saving or my career.
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It’d be interesting if they took into account racial/ethnic disparities. $75,000 might cut it for a Caucasian American family in the midwest, but for some people of certain ethnicities on the coast, that’s not going to cut it.
I’m Korean and growing up my parents – who usually cleared $400k in a year – were looked at as the low earners in their social group. I’m sure there are people who will say that this is purely anecdotal, but I’m just going off of what I know.
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That has to be one of the most simplistic graphs I’ve ever seen. No inherent data points, a flubbed and opinionated curve after $75,000 to infinity. Does making $90,000 mean you’re miserable? Making $200,000 suicidal?
Might as well put two eyes to make it a frown face, hah!
Now this makes a little more sense.
http://tinyurl.com/23jdtq2
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My wife and I have definitely traded off money for time and happiness. My wife took a 75% paycut to work a much lower paying but more enjoyable and flexible job and I could probably make about double what I make now in the private sector (I work at a university instead, though there is a pension which compensates somewhat for the lower salary). Together we earn about $130K, instead of the $350K+ we could earn. We both have advanced degrees in useful professions from prestigious universities (law and engineering).
We certainly don’t think earning $350K in the jobs we would need to have to earn that much would make us happier, in fact, it would make us much less happy. Living in the high cost SF Bay Area, $130K is enough.
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I think that’s a decent number, but it really does depend on the people and the lifestyle. Combined, my boyfriend and I make a little over $60,000 and we’re quite happy. We have comfortable bill payments and we’re able to enjoy luxuries like cable/internet, going out to eat, buying things we want, etc. $75,000 would definitely be able to buy us more “things” but we still have enough money to save and we’re very happy. I see the graph like marginal utility; there’s a peak at which you’re satisfied with the money you’re making/spending, and it eventually decreases. I just think it’s harder to set it at $75,000
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Hm. I’m confused as to why so much attention is being paid to the graph. I added it to the article to illustrate the Fulfillment Curve because I don’t think it’s an obvious concept. I think Sierra’s post is very clear that this curve is counter to the report’s findings. Where is this confusing?
In order to provide a bit of clarity, I’m going to make a couple of edits. I hope that’ll help. The graph is meant to illustrate a secondary point, and certainly not to be the center-point of discussion.
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Some people really don’t get it. Comments like “well, that depends on if you want to send your kids to private school.” I see this as no different than saying “well, that depends on if you want a new ipod every year.” What the article is saying is that the new ipod won’t make you happier… neither will sending your kids to private school.
Also, please stop playing the cost of living fallacy. I live in a very high cost of living area, so don’t chalk this up to bias. The point is that expensive areas are expensive because they are desirable. But you don’t need to live in Manhattan to be happy. Thus, you don’t need to adjust the 75,000 for a higher COL. You need to consider living in a cheaper location.
Basically what it boils down to is that some things simply don’t make us happier in the long run, no matter how much we THINK they will. If you want to argue the truth of that assertion, then your comment will be germane. Otherwise, saying you live in an expensive area and need to send your kids to private school is not really related to the point the article is making.
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@Al Czervik – I am with you on this one. Why is it that just about any article I read about happiness and income mentions the big screen TV, and always in a negative light?
Shawn here, reporting from the deep trenches and middle class yuppiedom: We bought a gigantic Samsung plasma TV at the beginning of the year and I can not begin to tell you the amount of joy that this thing brings us on a daily basis. Screw your “experience spending” I’m staying home and playing Halo.
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“Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.”
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Sierra, I find it impressive that you could actually put a price tag on your goals and come up with 80k/year — I’d love to see those numbers if you’d be willing to share. I can’t quite figure that out. Right now I’m just trying to eradicate debt.
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+1 on big screen TVs. I love my 42 inch Samsung LCD.
What *I* would classify as overspending is, e.g., a luxury-car lease.
Having done the auto lease thing myself (once, never again) I suspect it’s nearly always a matter of paying too much, for the wrong reasons. I see ads for $300, $400, $500 monthly lease offers and I think, WTF? But it’s really *none of my business* how anyone else spends their money, as long as they’re not begging for any of MINE.
Others, of course, will think car leases are a bargain and that something else is overspending. This is why studies of the type described in Sierra’s post are not intended to DEFINE appropriate or desireable spending. And also why it’s utterly pointless to say “the study is bogus.”
The study contains information but it isn’t fact, and therefore cannot be proven true or false. The authors asked a bunch of people a bunch of questions and put together some conclusions based on the answers.
The conclusion that $75K represents a sort of equilibrium point of contentment isn’t a judgement. It doesn’t imply that you can’t (or shouldn’t) be happy with less – or more.
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Some people really don’t get it. Comments like “well, that depends on if you want to send your kids to private school.” I see this as no different than saying “well, that depends on if you want a new ipod every year.”
I completely disagree with that statement.
You’re ipod addiction isn’t going to help your child to be a (potentially) more intelligent, educated, productive, or contributing member to society, which a private education has a much higher chance of success to give then a poor public education. This in turn will give them a better quality of life and better change of success which in turn will give you MUCH more happiness.
Would you rather have your child go to South Central with metal detectors and locker inspections or a private education in the country?
“The point is that expensive areas are expensive because they are desirable. But you don’t need to live in Manhattan to be happy. Thus, you don’t need to adjust the 75,000 for a higher COL. You need to consider living in a cheaper location.”
In my profession, the only opportunities to get a job in my field, let alone a decent paying one, is in a major city. It’s not a “desirable” location. I have to be here and that’s the way it is. You have to adjust for higher COL in that instance.
I mean, I could be a plumber, or a school superintendent, or a nurse’s asst. and move anywhere in the country. I might be making that kind of money but then I would be miserable in a job I hate.
Anyway, $75,000 is amazing salary in my home town in the Midwest. You could buy a house completely with that chuck of change and have some left over..but who honestly can make that money there? Very, very, few..
If my profession were to move more to he Midwest I would take 1/2 salary off to do that…but then I would be selfish because if I wanted my future kids to have a great education there would be no way that would happen there in a 100 mile radius.
“Basically what it boils down to is that some things simply don’t make us happier in the long run, no matter how much we THINK they will.”
A kid’s education? I think that will. Better medical services, more healthy options for nutrition, better employment opportunities, more varied ethic groups and less monoculture, better weather. All of those are going to make people happier. I honestly think it’s not just opinion.
“Otherwise, saying you live in an expensive area and need to send your kids to private school is not really related to the point the article is making.”
The point is that any money over $75,000 is not going to make you much happier to the individual. I would like to see the numbers on what people would say if they had over $75,000 and a good chuck went to their children’s education. I think down the road the happiness of the family would be different. IMO, better..but I don’t know.
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I’d consider moving “Charity” into your “Quality of Life” category. EVERY financial book tells you that actively donating to charity somehow improves your financial life and probably your overall well-being.
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The conclusion of the study isn’t “You need $75K or you won’t be happy.” The conclusion is that up until $75K per person–which would be $150K for the typical married couple as Sean (#18) pointed out–the gains in stated happiness in relation to income increases are at a much greater rate than they are above the $75/$150K threshold.
To put it another way, all things being equal in terms of social connections, friendships, etc, if you shift from having to sweat out every penny in your budget just to make ends meet to a pay level where you are comfortably able to pay for your necessities and still have money left over for savings/indulgences/experiences/emergencies, that tends to cause a huge jump in overall security and happiness. However once you reach a certain level of financial security, the upward trend slows down (though doesn’t disappear). In other words, if you go from never having a vacation to being able to take a trip to Florida, that’s going to be a much bigger impact on your overall happiness than when you go from vacationing in Florida to vacationing in Tahiti. It’ll still make you happy that you can afford to go so far away, but it just won’t be AS exciting as when you traveled in the first place.
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We can disagree about whether its 75K or 30K or 150K but I think it all comes down to a fortune cookie message I got a few years back:
“He who knows he has enough is truly rich.”
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“The number is beside the point, though. What matters is the exercise of understanding your priorities, and knowing what your dreams cost. Whether you do this and discover that your personal Enough is $30,000 or $300,000, you’ll be better off…”
I love this part of your analysis. The $75,000 is just a number (yes, with some research backing it) but really financial happiness is a sliding scale; in order to know your “number” a whole host of factors come into play: your history with money, where you live, your goals of course, and your drive/ambition.
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Sean (18) says:
“It’s actually $75k PER PERSON”
It appears to be household income, Sean. See the first line of the caption for Figure 1 in the summary (also in the full report).
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I do her taxes, so I know my sister made $138,000 last year.
Now I’m going to convince her to ask her clients to please reduce their billings by $63,000 next year and see how much happier it makes her.
Gene Simmons: “I don’t care if you’re homeless or the Sultan of Brunei. Your answer to ‘Would you like twice as much money?’ is always going to be yes.”
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My take-away from this article is in the last paragraph.
Making a family plan, with goals; living that plan; being reminded of it with an index card – that creates family understanding and happiness, now and in the future.
Regardless of income, that’s a recipe for satisfaction.
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$75k sounds more than enough for me but then again I am single, no kids, and no debt, I do live in Omaha, Nebraska where the cost of living is very affordable so depending on your situation $75k is a lot to many people.
Anyway great article SB
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I find the article extremely flawed in that they do not separate gross income and net income. Is it $75K net income? People will vary a lot more on how much they make after taxes and how that relates to happiness; probably a lot more that other factors such as location, debt, etc.
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JD: It was my understanding that the YMoYL curve was specifically regarding Consumption, not Income. We would never expect to have too much income because we can give it away costlessly (or just leave it in a bank account and forget about it). The same isn’t true of consumption goods. I though the YMoYL section on that was that you can end up with too much Stuff that stresses you out (similarly too much travel etc.) There’s diminishing marginal utility to Income, but we might expect quadratic negative utility from Stuff if you can’t get rid of it effortlessly.
In short… Income does not equal consumption. (It’s consumption + saving). The graphs are measuring different things.
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You’re right. You’re right. You’re absolutely right. Mentioning the graph in the story (and then me adding the graph as an illustration) clouds the issue. I’ll leave things stand for now, but will try to make edits early next week so that googlers who find this don’t suffer similar confusion.
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I think it’s funny that it takes a Princeton study to show that.
As someone who has made at or below poverty level for most of the their working career, I used to say (and still say) that “I’d be happy if I made around $60,000 or so per year, because that’s what it takes to lead a comfortable life and be able to pay mortgage, utilities, etc, with a bit left over to save.”
This whole thing of “Yes, money does buy happiness at a certain point, it’s hard to be happy when you’re constantly afraid of ending up homeless” is something I try to tell people when they say smugly “Money doesn’t buy happiness.”
(Funny thing, everyone who says “money doesn’t buy happiness” or “Money isn’t important” is usually filthy rich. Just today, I attended a speech on finances and career by a Deloitte partner who was making 6 figures, and he kept saying “Money isn’t important”. I felt like standing up and yelling “Then give me your money and your job, if it isn’t important to you.”)
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Just wanted to add imo buying both things and experiences make me both happy, to me its not just one or the other.
I like having a balance of both things and experiences. I like having new clothes (stuff) but I also like being able to go to college (an experience).
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The important thing that most people is missing is not the amount of money it takes to be happy, but that there is a point where money stops giving you the same returns on happiness. Stop fixating on the $75k number, that’s just used to get attention.
For some people, the “magic number” is going to be $30k, for some people it’s going to be $130k. The point is that there IS a magic number, a point where your ROI for money lessens.
What this study teaches us is that we should look at our lives and figure out when we need to start trading back money (which usually you can make more of by spending more and more of your life at work) for time and freedom, as the money won’t bring us enough enjoyment to be worth it.
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I agree with @chickybeth #24 – what happened to $40k being the “magic number?” The Penelope Trunk article came to my mind as well.
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I’ve not known many rich people in my lifetime, and I’m definitely not one of them. There are four people I would consider rich that come to mind that I’ve known. Three of them business owners of the company I worked for and one a relative. Funny thing is, they were four of the most miserable people I have ever met in my life. And their misery was contagious, as if they were only happy if everyone else was miserable. So, whenever anyone tells me they will only be happier when they’re rich, I tell them to be careful what you wish for.
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This article is funny to me because I switched jobs for a 50K/year (the level which supposedly used to bring happiness) to a 75K/year two years ago thinking I could get out of debt so much more quickly, and reduce my stress about being in debt. Job stress has increased, support has decreased on the job, debt has not significantly changed — arrgh!! — I do have two children I support and student loan debt. Lately I am feeling like where is my economic bailout??!!! — I am hopeful however that with good planning staying at my current income will make a difference within two years.
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I like the idea of a magic number for happiness and contentment. It doesn’t mean that one has to stop striving when they get to that number (or that they can’t be happy if they are lower than that number)….but it’s important to know that money can’t buy happiness. Money can buy things that can make you secure and that can create happiness – and you really only need about 75k to fulfill basic needs and some luxuries.
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It’s not clear from the PDF whether this 75k/year thing applies to to individuals, or households – but I actually interpret it as more for individuals, that makes more sense to me. I’m also assuming it’s 75k before tax. 75k would be great as a single, but it probably wouldn’t leave much for extras for a family.
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@DCPortland #42, I couldn’t agree more, I also really enjoyed your take on this.
I was shocked to learn that in the USA, today, we are exposed to more advertising in 1 DAY than we were in an entire year in the 1950s. It’s no accident we have been brainwashed into thinking that happiness = consumption. In fact, it does not. I think it feeds discontent & disconnection from nature, spirit, family and community. The best thing one can do is turn a blind eye to that neverending pressure to consume. Don’t judge your neighbor’s level of happiness by the vehicle in their driveway.
Hubby and I made a deliberate decision to change our lives and go against the grain. A few friends & family teased us, but overall, most were supportive and now, some even confess envy.
We relocated to a small home on several acres outside of the city (I telecommute, he travels for work); we ditched the clutter; we do not buy anything that isn’t necessary and we buy second hand when possible; we sold the oversized vehicle for a small economic one; and most importantly, I am now able to work just 4 days a week instead of 5. I traded the stress of full time work for the pleasure of gardening, hobby farming, and cooking from scratch. Sure we’re earning $12k less a year, but our disconnect from consumerism has been more than enough to compensate!
I know it’s a subjective issue, but digging deep inside to find your `enough’ point can be incredibly liberating. In this country, even those of us who do earn more than enough have been brainwashed and programmed into thinking that we’ll never have enough.
Conversely, there are too many who do not have enough, not nearly. Those more fortunate among us need to practice generosity and compassion. To me, being able to donate time and money is so much more fulfilling than consuming. It’s much more integral to my emotional well being & happiness.
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@Deb #81 – Thanks for your supportive comments. And, thank you for your personal story. It took nearly 25 years as a psychology hobbiest, and a master’s degree in psychology, for me to truly recognize how irrational people are. It seemed impossible to me that advertising, and the consumer culture it creates, could have such an impact on people at such a deep level. Many of us were brought up to believe that we make our own choices about how we interact with the world – that is the American way. Yet, that turns out to be utterly untrue, as we are much more influenced by advertising and others’ conspicuous consumption, than we think we are. Though it rarely gets into the mainstream media, the scientific evidence for this is overwhelming.
It takes tremendous courage to make the lifestyle change choices that you have in the face of the onslaught of consumerism. I commend you. I’ve done the same (four years now working four days a week or less), so I can attest to how difficult it is at first. As you so eloquently point-out, however, the well-being benefits start to accrue immediately. And you wonder why you were living like you were before you made the change. It seems irrational when you’re on the other side. Indeed!
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I don’t know where this 75K figure comes from, but I don’t think it makes any sense. I am judging from my personal situation – I am a sole provider for the family of three, and I make substantially more than 75K – and it’s only just enough. I am not poor – we have decent housing (which I rent because purchase price for the same house is well out of my reach and I don’t want to spend tons of money and get an inferior house which I’d need to spend tens of thousands fixing), we can afford a week-long vacation once a year and I save some money for the retirement (because I don’t kid myself about getting anything that could sustain us out of the government entitlements when it comes to it and unlike some, I don’t have govenment pension waiting for me). We eat well (dining out 2-3 times a month), occasionally go to a movie or some other entertainment, we don’t count every cent, but we don’t splurge either. That’s basically it. No luxury cars, no yachts, no wall-size TVs, nothing of the overconsumption sorts. Ah, forgot also five-figure debts from the child’s student loans (it’s just starting, I expect those to grow as education continues) which I’m just starting to pay out.
As I said, I make more that 75K. And by the end of the month if I have some hunderds dollars left after paying the bills, the debt payments and retirement contributions – it was a good month. If something unexpected happens I’m in the red – which eats part of what I saved from the good months. So it comes out as roughly even.
And what if I had a small kid? Babysitters, education expenses, general expenses… I probably would have to give up that vacation stuff and entertainment (I guess the kid is entertainment enough anyway) and maybe stop or seriously cut the retirement contributions and hope for a raise eventually, or move into a worse neighborhood and cut on entertainment and dining out and other unnecessary stuff.
Now, please understand – I am not complaining. I am good, I am happy and I consider myself lucky to have enough money for almost everything I and my family needs and even some “wants” added now and then. But if I had income of only 75K, I’d probably be in very serious trouble. I’d probably have to move somewhere much cheaper and substantially restrict my spending, and start counting every penny. Would it make me significantly less happy? You bet! So when I see that 75K is a limit after which overconsumption starts, I think it’s way, way too low.
So money maybe doesn’t buy happiness, but the amount of money where it doesn’t matter anymore is much higher that 75K.
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I’ve earned $13,000-$34,125 every year over the course of my working life, and my monthly expenses are currently about $1000. I often save around 10,000, or 10 months’ expenses, every year. I’m very happy (not least because I can easily see how my way of life can be sustained in the long run.)
There’s a famous quote that goes something like: income twenty pounds, expenditures twenty pounds fifty, result: misery. Income twenty pounds, expenditures nineteen pounds fifty, result: happiness.
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Odd concept.
If you establish the link between material goods in terms of your income and your general happiness, then why is it parabolic? I can understand linear, exponential or logarithmic correlations, but the argument “things are nice, until you get more than 75k worth” doesn’t make a lot of sense.
I’m so fortunate, skilled and dedicated that I’ve earned a salary level quite a bit above $75,000, and I would say it has made me quite a bit happier than I was when I was earning around 75k. Not only does it take the salary off the table with a comfortable lifestyle, it takes the salary off the table in a luxurious and accommodating lifestyle.
I’m at a point where my net assets could support me very comfortably for the rest of my life. I could stop working tomorrow and start playing golf. That makes me happy.
Earning significantly more than $75,000 gives you economic freedom, which gives you more time to do what you enjoy doing. How does that make you less happy?
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Okay, once I stopped laughing after reading this, I was able to regain my composure and respond.
This study is total crap. I make exactly $75,000 per year, and live in a high cost of living city. Prior to my $75,000 spoon-fed salary, I owned a business for 14 years (which I recently sold for a nice sum.) I intentionally put all the money from the sale of the business into a retirement account so I couldn’t touch it without a huge penalty because I didn’t want to just sit around; I wanted to be a product member of society.
Because I have a two-year non-compete from the sale of the biz, I decided to take a full-time job until the two years passes.
Having lived on a six-figure income while owning my business was FAR MORE FULFILLING than living on $75,000. I never did buy a lot of luxury items (they don’t float my boat), but the pittance left over after expenses on $75,000 is barely enough to put into savings. I own a modest home (valued at $150,000) and don’t drive an expensive car. (It’s very nice, but not a luxury vehicle.) What makes me unhappy at $75,000 is knowing I would never get ahead on just earning that amount. Thank God I owned a biz and made good money all those years. There’s no way to retire on $75,000/year.
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Late to the party, but I believe that this study does point out that satisfaction continues rising above $75,000. And to me, satisfaction is more important than happiness.
-Knowing that I have lots of money in the retirement account makes me satisfied.
-Knowing that I have the extra money to fly somewhere and celebrate a birthday makes me feel good.
-Knowing that I have extra money to send a kid to summer camp.
-Knowing that I have the mortgage paid off and am truly.
At least for me personally, more important than the satisfaction of a retirement account is the satisfaction from knowing that I’m doing what I’m meant to be doing and serving the need that I’m called to serve.
Warren Buffet recently said something fascinating in TIME, basically, “Just because at home nursing aides or social workers or teachers aren’t paid much does not mean that they don’t play a very valuable role in society. And I wish that we could give them salaries that reflected that”.
Personally, I do wish that those jobs were paid more, even though it would mean inevitably mean more taxes for me. I ultimately think that if teachers, et. al were more accountable and higher paid, the net benefits to society would justify the upfront costs.
Anyways (and I agree with the author of the post), we should focus more on things that bring us true satisfaction: laying a foundation / quality of life / beyond the basics. And, assuming that we can keep a stable head and wise daily spending as income rises, it’s undeniably easier to achieve those three things with a larger income.
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I think something very important hasn’t been mentioned. A flaw of these types of studies is that measuring a one variable (happiness) in relationship to another variable (salary) does not equal causation.
You can’t say that People who make 75,000 a year are happier BECAUSE of the fact that they make that. There are lots of other factors the occur when the average person moves above that salary (life changes, having kids, moving into a bigger house that costs more money for rent or paying a mortgage, etc – which actually can not only lower your net value, but add a whole hell of a lot of stress to your life).
The only thing I get from it is that the more crap going on in your life, the more money you need to make…and all I have to say to that is.. Duh. Moral of the story, stay young, be careful who you marry, don’t have kids. Not: Go get a job that pays $75,000
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Good article. In my opinion, the best things in life are free or at least not very expensive: friendship, love, sex, exercise, reading, nature, music, etc. I have excellent health and energy, pursue my passions every day, and earn enough money to live very comfortably (about $72,000/yr). As long as I have enough money to pay my bills and to invest for the future, I am very happy.
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