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Happiness is earning $60,000/year

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Re: Happiness is earning $60,000/year

#71

Post by ellyagg »

frankus wrote: post #70
rg wrote: post #60

H L Mencken once defined a wealthy man as one who earns $100 a year more than his wife's sister's husband.

Robert Frank has a book (Falling Behind: How Rising Inequality Harms the Middle Class) that makes a convincing case that that effect does in fact exist. He goes on to argue for a progressive consumption tax, which is fairly convincing depending on your politics.

"[D]epending on your politics", indeed. It's not self-evident that everyone should be equally happy. It's not even self-evident that happiness should be the overriding concern of our existence. I've sacrificed my happiness many times in the name of other principles, especially truth. And, it wasn't "sacrifice temporarily for greater happiness later" or any other such rationalization.

Re: Happiness is earning $60,000/year

#72

Post by jseliger »

rg wrote: post #60

H L Mencken once defined a wealthy man as one who earns $100 a year more than his wife's sister's husband.

Upvoted. People interested in this discussion should also read Stumbling on Happiness by Daniel Gilbert, which discusses the surprising vast amount of research on various aspects of happiness, and that research draws on a fairly diverse array of methods (self-reports, random beepers, inferences based on statistics, etc.).

Gilbert puts the dollar amount closer to $40K, rather than $60K, and points out the Mencken quote in action: most people think they need to earn about 20% more than they do, almost regardless of how much they earn. But people seem more satisfied by work they find meaningful, a good sex life, and social connections (not necessarily in that order).

I mentioned Stumbling on Happiness in my list of influential / important books to me: http://jseliger.com/2010/03/22/influential-books-on-me-that-... , though perhaps I should've said more about it.

Re: Happiness is earning $60,000/year

#73

Post by barrkel »

SamAtt wrote: post #38

I've never agreed with this theory. He seems to frame things in terms of irresponsible living and under that criteria I agree. If the difference between 60k and 90k is just "a little more “entertainment” and maybe some bigger stuff" to you than his theory works out. But to the person who invests that extra 30k a year and gets to retire at 50 instead of 70 I think the happiness difference is pretty significant. I'd be…

I think you may be overestimating the benefits of retirement in practice. Many retired people feel directionless and purposeless, and die sooner. By your argument, unemployed people living off the dole ought to be very happy, but it's actually depressing.

Re: Happiness is earning $60,000/year

#74

Post by rokhayakebe »

Perceval wrote: post #19
derefr wrote: post #15

Another interpretation is that it currently requires $60,000/year for a US citizen to not be lacking the means to fulfill one or another step on Maslow's hierarchy: http://en.wikipedia.org/wiki/Maslows_hierarchy_of_needs Given that the [2008] US GDP is $14.4 trillion/year, and there are ~300 million US citizens, it turns out we're each, on average, creating $48,000/year in value. So, on average, each citizen is $12,0…

Because income is heavily skewed by outliers (e.g. Bill Gates), it makes more sense to look at the median income alongside the average income. Median household income with 1.35 earners and 2.57 household members is $44,389. That's less than the per capita average of $48,000, and it's spread over 2.5 people. Turns out that about 70% of the households in the United States are going to be below $60,000. Divided by the n…

Then again at $60k for one person it may include the ability to afford a decent home + car etc...hence by the time the second or third person rolls in the extra cost to achieve that happiness is not $60k per person. It could be even lower than $30k.

Re: Happiness is earning $60,000/year

#75

Post by rokhayakebe »

sosuke wrote: post #40

So if I'm single $60k is fine, throw in some dependents and that changes very fast. I think I'd be happier at $180k a year and $60k more for each new dependent that comes along. That takes care of health, house, education and plenty extra to stash away.

It's not linear. One person = $60k. Two = definitely less than $120k.

Re: Happiness is earning $60,000/year

#76

Post by neilc »

BobbyH wrote: post #27
neilc wrote: post #20

If I made, say, $1 million/year, I think I'd be happier -- for the simple reason that I could afford to only work one day per week (or a few months per year, or work for 5 years and then semi-retire, etc.). That would mean a lot more freedom to choose how to spend my time, to travel, and so on. (Of course, I'd probably end up doing something similar to "work" during a lot of my spare time, but there's an amazing diff…

neilc, I personally agree with your intuition, but Daniel Kahneman's point seems to be that, on average, you would be as happy making $60k as you would be making $1 million a year. This concurs with a lot of other research that suggests that human beings are terrible at estimating what makes them happy. I enjoyed this book on that exact topic: http://www.amazon.com/Stumbling-Happiness-Daniel-Gilbert/dp/...

Sure; my point is that people are perhaps misspending their income anyway. That is, the guy making $1 million per year could just as easily decide to earn $200,000/year and have a lot more freedom.

(In any case, $60k/year is meaningless without some reference to cost of living. $60k/year is an ample relative salary in the Dakotas, but much less so in San Francisco.)

Re: Happiness is earning $60,000/year

#78

Post by neilc »

barrkel wrote: post #73
SamAtt wrote: post #38

I've never agreed with this theory. He seems to frame things in terms of irresponsible living and under that criteria I agree. If the difference between 60k and 90k is just "a little more “entertainment” and maybe some bigger stuff" to you than his theory works out. But to the person who invests that extra 30k a year and gets to retire at 50 instead of 70 I think the happiness difference is pretty significant. I'd be…

I think you may be overestimating the benefits of retirement in practice. Many retired people feel directionless and purposeless, and die sooner. By your argument, unemployed people living off the dole ought to be very happy, but it's actually depressing.

Living off the dole is filled with stress. If you had a reliable, steady income and the health to enjoy it, I think most people would be much happier than they are working a typical job.

Living off the dole is also not something considered socially respectable, whereas early retirement is widely accepted.

Re: Happiness is earning $60,000/year

#79

Post by Nwallins »

mistermann wrote: post #66
kqr2 wrote: post #32

Earlier quoted context omitted.

I think the key to the $60K happiness threshold is that it represents being in the top 20% income bracket. Standard of living may be lower elsewhere, however, an individual's relative wealth (especially with respect to peers) is probably what's really relevant: http://www.telegraph.co.uk/science/science-news/3315638/Rela...

"I think the key to the $60K happiness threshold is that it represents being in the top 20% income bracket." And another caveat (financially), to those who live in regions where the housing bubble has not yet popped, is: did you buy a house before the bubble started? In most of Canada (and Australia and a few other places) where the bubble is still thriving, the #1 most important financial issue for 95+% of people is…

I upvoted by accident. You should invest where you see value. Otherwise you just sound envious and bitter.

Re: Happiness is earning $60,000/year

#80

Post by mikeyur »

I recently spent a few hours figuring out how much I need to be happy. Happy to me is living comfortable with enough extra cash to go out or take periodic trips without going into debt.

I'm currently living at home and paying off some debt (I'm only 19 so it's still socially acceptable to be living with mom and dad :P).

I wrote out the cost of necessities (rent, phone/internet, food, transportation, healthcare/insurance) and then all of the extras. I want to live comfortable so for rent I said $1500 (about what a 1bdrm condo in Vancouver goes for), food $800 (includes going out to eat and regular trips to starbucks), Phone/Internet $150, Transit pass $100, healthcare $100.

The costs are mostly rounded up, if I can save cash without sacrificing happiness I'll cut costs down. On top of the basics I want to save $500 (minimum) each month and have $2k or so in the "misc" category. This includes clothes, household expenses and extras.

I calculated the amount and it was around $5500/mo. I then recalculated and factored taxes in, I believe it was around $6800/month pre-taxes.

In the past month I've been looking at ways to get this income. I could look into a 9-5 job, but that wouldn't make me very happy. I decided to get a couple clients on retainer with $7k/mo. as my goal. I've already locked down a large client who will cover most of my income for about 40hrs/month of work on my end. I'm quite confident I'll find another client to get me to the goal amount.

I'll be able to live well for approximately 3hrs per day, 5 days a week of work. I'm talking to a startup right now about joining on as a cofounder, and if I do I'm glad I'll be able to work on my own company without having to survive on ramen or live in a crack den.

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