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

-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.

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.

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?

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.

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!

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.

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.

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).

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.”)

In short… Income does not equal consumption. (It’s consumption + saving). The graphs are measuring different things.

Anyway great article SB

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.

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.”

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).

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.

“He who knows he has enough is truly rich.”

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.

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.

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.