Researchers Say Happiness Costs $75K 772
SpuriousLogic writes "Does happiness rise with income? In one of the more scientific attempts to answer that question, researchers from Princeton have put a price on happiness. It's about $75,000 in income a year. They found that not having enough money definitely causes emotional pain and unhappiness. But, after reaching an income of about $75,000 per year, money can't buy happiness. More money can, however, help people view their lives as successful or better. The study found that people's evaluations of their lives improved steadily with annual income. But the quality of their everyday experiences — their feelings — did not improve above an income of $75,000 a year. As income decreased from $75,000, people reported decreasing happiness and increasing sadness, as well as stress. The study found that being divorced, being sick and other painful experiences have worse effects on a poor person than on a wealthier one."
This is painfully obvious. (Score:5, Interesting)
1. Money cannot buy happiness, it can buy security.
2. When your loved ones are secure you are less stressed.
3. When you are less stressed you can focus more on being happy.
How much money you need is actually determined by how many people you have to care for. If you don't have any children, or a spouse, $75,000 is about right. If you have children, a wife, and a big family, $75,000 is a drop in the bucket and you'd probably need twice that much to provide for children and take care of parents or grand parents into old age.
I don't know about you but thats my formula. The amount is determined by the amount of people I have to provide security for and the overall security expense, along with whatever the expense is for my personal wellbeing. It's ultimately about people, unless you're a greedy anti-social.
Re:cheap shot (Score:3, Interesting)
Impossible. Happiness is something you should have the liberty to pursue. It's not something which should be given to people by the government. The government should provide ample opportunity and resources for people to have the option to fight or compete for happiness.
The reality we have today is that for a majority of people unless you are born to make $75k no amount of hard work or effort will allow you to reach that goal unless you break the law. It should not be so difficult for ordinary people to make $75k. The fact that so few make this much should show us not that more people need to make it, but that more people should have the ability to try to make it and be given the opportunity to do so if they have skills, talent, ambition.
Enough already (Score:3, Interesting)
$75,000 per year may buy a lot of happiness, if that is possible, in a place where the cost of living is really low, but in LA , NYC or Frisco? Forget about it - $75,000 is chicken feed - you can barely pay your rent on that salary. Guess most people living in LA, NYC and San Fran are really unhappy if this is the case.
Oh wait, I make more than that, but my wife does not work, so for the two of us we make less and we live in one of the aforementioned expensive cities. Guess we should be unhappy - dang it I hate it when I am not deemed normal!
happiness isn't everything in life (Score:1, Interesting)
Re:Too much money also means no trust. (Score:2, Interesting)
Have you ever talked to people who have money? They don't seem to surround themselves with people they can trust. And even if you don't know anyone like that personally just look at the typical celebrities like Paris Hilton, Britney Spears, Lindsey Lohan, or anybody who has hundreds of millions of dollars.
Or look at some of the elites who go to Ivy League schools and who have elite friends and all of them have money and none of them can trust each other. How are you going to have people you can trust when all of your people are rich elites like you? And if you have people who aren't rich elites around you then you can't trust them because they could be bribed.
You think I'm wrong? Show the flaw in my logic. Show me where trust and money correlate because I believe the correlation is increased money equals decreased trust.
Re:This is painfully obvious. (Score:1, Interesting)
Agree and that's basically what Maslow taught us.
I would add that money you set aside not only buys security, it also buys some freedom - the freedom to say "go to hell" to employers you don't like for example, or the freedom to travel, buy books, go on vacation where and when you want etc.
Security AND Freedom. Weren't these enshrined in the US Constitution ?
Re:This is painfully obvious. (Score:2, Interesting)
Happiness is far more inexpensive than $75K.
My experience with the $75,000 mark (Score:5, Interesting)
I recently left a job where I was making under $75,000 and took a job where I am now making over $75,000. In the first case I was slightly below, and in the latter I am slightly above. In my previous job I had a lot of slack. I took the train to work. I worked pretty much whatever hours I felt like. I did not have very many responsibilities. In my current job I have less slack, I am working longer hours and I have significantly more responsibility.
In the previous job, my debt was not shrinking as quickly as I wanted it to. None the less I wasn't scratching out a subsistance living while trying to pare it down. I was going out to eat with my girlfriend a lot and making random purchases when I wanted things (PS3, HDTV, etc.) I was driving a beater car, but since I was taking the train, it didn't matter so much. In my new job, my debt is falling quickly and I'm driving a much newer car. I am still going out to eat a lot, but having obtained most of the crap that I wanted, I have extra money to pay down debt.
All in all, I'm not sure that I am any happer >$75,000 than I was at $75,000. I do know that I have less time to practice tai chi and kung fu and that irks me. I have a lot more responsibility, but I saw that coming. I'm now the guy we all read about with his Blackberry going off at all hours of the night. In life we have the opportunity to trade our time for someone else's money. They have things that need to be done, and they get to the point where their own time is so valuable that they can pay other people to do it for them. The more money that you make, the more of yourself and your time that you have to give up for it.
Based on my experience, $75,000 seems to be a good number (in Southern California) at least. A part of me thinks it is a little high. Someone who can content themselves with a simplistic life (as I wish I could, and I do half heartedly strive for), it is more than enough. Too far below it and you start having to make some sacrifices like living in not so great neighborhoods, driving older / less unreliable cars, not being able to go out whenever the mood strikes you. Yet once you get above it, you start giving up yourself. You enter that realm of responsibility where you are the go to person when things need to get done. You lose the ability to tell others, "I will deal with it tomorrow" in all but the most extreme cases. In Southern California the $75,000 mark seems to be the bottom of the "You can really do what you say you can do" pay scale. It only goes up from there as you continue to prove yourself, but you get more money at the expense of your free time.
Personally, I think I reached a little too far. I would have rather stayed below $75,000 and enjoyed the slack.
Re:Double what you are earning (Score:2, Interesting)
Re:This is painfully obvious. (Score:3, Interesting)
But lets say 20 years from now you find out you have X disease that costs Y amount to treat it with an experimental drug insurance doesnt' cover.
Not an issue if you live in Canada (or basically anywhere other than the US)
Re:This is painfully obvious. (Score:4, Interesting)
I would add the number of people you accept to care for can go up with increased income. When I passed an amount I felt secure with I accepted increased responsibility for helping parents and siblings. That extra load seems to be a wash emotionally: there is some extra worry balanced by increased happiness at being able to help.
Count among your blessings the fact that you had a choice in the matter. Taking on a big responsibility is easier when done voluntarily, as I'm sure you've seen. So much serious stuff gives us little say. My in-laws recently had to evacuate a seriously -- and possibly terminally -- ill expatriate grandfather, an operation that has saddled grandpa's children with considerable debt. It really wasn't a viable option for them to leave their dad to die in his newly adopted tropical home. And the non-insured medical expenses are not going to make things better, either. Right now I'm hoping that my wife and I don't get touched to help out. Seeing that in print looks heartless, but the man moved voluntarily, aware of his worsening health.
Re:Money does not buy happiness, but ... (Score:5, Interesting)
Money can't buy you happiness, but poverty can't buy you shit.
Re:Double what you are earning (Score:5, Interesting)
Man, if $75k is poverty in NYC then 2/3 of NYC lives in poverty! Is it really the case that only the top third of New Yorkers can be said to be non-poor?
If you were given a tour of some of the $1000-$1500 a month apartments in the Lower East Side and didn't know their cost, you'd certainly describe them as "impoverished" living conditions. The next level of rent in NYC ($1500-$2200) doesn't generally get you space past 800 square feet in the city (New Yorkers call Manhattan "The City," not the boroughs, FYI). There is also a fee system in NYC for renting any apartment via a realtor - which is one of the only ways of getting a good place. The fee is usually a full-months rent that you pay to the realtor and never get back. So...if you're going to rent an $1000-a-month apartment here that you found via a realtor you pay the first months rent ($1000) last months rent ($1000) the fee ($1000) and a security deposit ($1000) making you're bill before moving expenses $4000. With all combined moving expenses you can easily pay $8000 to move a half-mile to a place that's the same price as the one you're living in now. All of this doesn't even factor in all the shenanigans you'll encounter while trying to beat 20 other people on signing the lease.
My wife and I live in NYC and we've estimated that for a husband and wife to live comfortably here (including going out to dinner once a week, belonging to a gym, being able to leave the city every other weekend, etc) you have to make around a combined income of $300k.
People in NYC tend to be so used to sacrificing basics to live here that they've forgotten what poverty means to the rest of the country (this includes people who make 75K here.) NYC's super-wealthy on the other-hand are these maladjusted weirdos who have nothing to do besides be paranoid about who's trying to take their money and contribute little or nothing to society. Most students here could also easily be deemed as impoverished. I've known some who go on sugar packet raids at bodegas and Starbucks as a way to save money.
I just heard a quote the other day (can't remember where) about NYC. "It's heaven and hell." That about sums it up.
Re:cheap shot (Score:3, Interesting)
It is not stealing to take back stolen property. The rich have bought themselves laws that transferred wealth to them, well, we can vote ourselves laws that transfer it back to us.
Re:This is painfully obvious. (Score:2, Interesting)
Been there done that.
I first got cancer when I was seven.
If you've ever had cancer you would know you don't really get to "enjoy" life. My symptoms were bleeding, no energy, joint pain and fatigue.
I had acute lymphoblastic leukemia, did the chemo thing for four years.
When I was 33 I had the opportunity to have a stroke, trigeminal neuralgia and a tumor in my neck, all at the same time. None of those things allow for enjoying life.
So let me know what life ending illness you think allows for "enjoying your last few years".
Key To Happiness (Score:2, Interesting)
Is to want what you have rather than trying to have what you want.
If you earn $40k / year, don't spend money like you make $80k. Debt is stress. Debt is unhappiness. Avoid it.
People of all various income levels can be happy or not. It depends on how they choose to live their lives. People who over-spend because they think having those nicer things will make them more happy end up being owned by their things. And in debt. Both of which lead to unhappiness and stress.
I am quite happy. Why is that? My home mortgage is less than half of what I could afford. I drive an 8 year old car which I paid off 5 years ago. Therefore, I have some enough money each month for entertainment and also enough to save for the future.
No stress and I get to have fun. Stop trying to keep up with the proverbial Joneses. It will inevitably lead you toward stress and unhappiness.
Re:Mathmatics of dissatisfaction (Score:4, Interesting)
The ABA and the law schools pretty much lie to prospective students. I don't mean mislead, or present incomplete information, I mean they will knowingly lie about employment prospects. I didn't want to rely on sort of "everyone knows" information like the supposed oversupply of lawyers, so I researched and tracked down statistics for my law school, without knowing that those statistics are intentionally twisted. Hadn't expected that; my undergrad school published their own statistics even when they made them look bad, so I thought law schools would do the same. Several schools have been caught lying, and blame "inadvertent" clerical errors, but for some reason the error is always in the same direction. I was also personally caught in another lie, that the JD degree is useful outside the law; it was sold as a more rigorous version of a degree in public policy/administration/government, though it in actuality pretty much forecloses you from being hired in any other field. This last thing is the most annoying, I actually make a good living as a lawyer, but if I had realized that the JD would make that the sole thing I would be able to get a job in, I wouldn't have gone.
Re:cheap shot (Score:3, Interesting)
So? We just close the loopholes. Don't allow people to invest in tax havens. Why should we continue to allow people to screw over society?
You know what removes the incentive to invest? Lack of demand. If you have all the money in the world and everyone else has none, why would you invest in jobs creation? No one has any money to spend on your products. That is what we are seeing now, there is plenty of capital to invest in new jobs, there is just no demand.
Re:Divorce... (Score:1, Interesting)
Writing up my own divorce papers right now and it is amazing how much butt I have to kiss to keep my soon-to-be-ex from going ballistic and hiring an attorney to fight it out. Yeah, you get screwed as a man, especially if you are looked upon as moderately successful and she is not. Nevermind that you may have paid for her to get multiple degrees in whatever hobby-career interested her or allowed her to stay at home with your children and make the vast majority of purchasing decisions with the income. I call what many wives get "the good job", but society doesn't. She was your slave, raised your children (I hear this term constantly, hey, they were her children too, and women statistically make the reproductive choices in marriage), cooked and cleaned for you (whether she did a very good job of it or not), and now she is behind the eight-ball career-wise because she wants to leave you. What a filthy dirt bag you must be...
Yeah, divorce is not only slanted against men, the system is set up to very adversarial. You sue for divorce, there's no way to get one without suing. It's a freaking lawsuit! Yeah that doesn't set you up for mortal combat right there.
Btw, if anyone finds themselves in my boat you owe it to yourself to go to http://divorceinfo.com/ [divorceinfo.com] you may be able to get her to read a few pages too that might make you decide to become more civil and just get through this horrible time in your lives. Read http://www.divorceinfo.com/letterfromlawyer.htm [divorceinfo.com] especially, gladiator combat to the death with lawyers usually benefits no one unless you are both very wealthy.
War = 12 M of unhappy people (Score:1, Interesting)
According to http://usliberals.about.com/od/homelandsecurit1/a/IraqNumbers.htm , the taxpayers spend us$ 900 Billon.....so...900 B / 75 k = 12 M of unhappy people...but..some VERY happy contractors, senators and friends of G.W.!!!
Re:cheap shot (Score:2, Interesting)
If everyone had the ability to make $75k a year, $75k a year would not be "worth" as much. Obvious inflation is obvious.
Image everyone gets a free superpower - useful but not game-breaking (like changing reality with a thought). I can fly, Ted can phase through walls, Jenny can see electrical fields. So we all go to work with our cool powers. I'm the fastest man at my delivery service, Ted saves dozens of people daily as a firefighter and Jenny makes the electrical grid more efficient. We all make at least $75K. In fact, everyone does because everyone's powers are useful.
Guess what? We're not all poor. We're all richer than before. We have fast deliveries, people who would have died are alive, and our power grid is better and therefore cheaper - not to mention whatever everyone else is doing. Just because everyone gets paid more doesn't mean it's inflation - it's not as long as they're being paid what they're worth. If they're generating value, we all win even if we pay them what they're worth.
But of course, there are no super powers in the real world. We have to teach people mentally or physically to make them worth $75K/year. That doesn't mean it's impossible or that it would cause inflation if we did. The economy is not a zero-sum game.
Re:cheap shot (Score:3, Interesting)
Let's go back to the 90% marginal tax rate on the highest earners we had in the 50s. The system worked better for them, they should pay more because they got more from society.
I decided to do some research on that, and found: [yalelawjournal.org]
Brownlee helpfully provides estimates of the historical effective rates for the richest one percent of households as well. He indicates that effective rates during the high marginal rate years of World War I reached 15.8%, and that during the high marginal rate years of World War II they reached an astonishing 58.6% in 1944.9
After the war, while the top marginal rate remained extremely high at 91%, the effective rate for the rich declined to 32.2% in 1952, then 24.6% in 1963, rising to 28.9% when Ronald Reagan took office and declining to 22.1% following the 1986 tax reductions.
The conclusion drawn by Brownlee is that the rich can be taxed at very high effective rates during times of national emergency, but that at other times their political clout ensures that effective rates are much lower than marginal rates.
Re:This is painfully obvious. (Score:3, Interesting)
I don't believe your 73rd percentile stat at all given that the mean and median (so 50th percentile) are roughly $45k.
You can get those stats from irs.gov. Back in 2003 I checked it out: I was making $75K and that was the 80th percentile; at the time $35K was the median. At the top 5% range it gets absolutely ridiculous - see the L Curve [lcurve.org] (biased but still accurate numbers).
That's the major cause of the current recession - the fact that people didn't save and used credit cards to spend way more than they earned (at least you're not doing that).
The problem wasn't people spending - spending is great for the economy. The problem is that the economy simultaneously requires a large middle class to keep spending and a smaller workforce to keep producing. Since the workforce and consumer class are the same people, eventually layoffs must have an effect. For the last 30 years we've been aggressively pursuing greater efficiency (woo!) but have not been able to keep up with demand for new jobs.
Ultimately the problem is structural: we are moving towards an asymptote of one self-healing machine, owned by one person, that creates all of the goods of the world. Think of a single Star Trek replicator operated by one Ferrengi. The IRS has only one W-2 to audit, and the Ferrengi insists that the income tax is drastically unfair as he is the only one paying any of it.
Re:This is painfully obvious. (Score:3, Interesting)
And the only way to control costs is central planning, which is .... socialistic.
I thought the only way to control costs was to ensure healthy competition, freedom of choice and fight inefficiencies. How is central planning efficient?
On one hand you have the ideal of an omniscient and beneficent central planner who acts in the best interests of all involved.
On the other hand, you have the ideal of totally fair and free choice and competition.
If you live in a universe where either of those things actually exists, please raise your hand... I'm waiting... nobody? Thought so.
Somewhere in the middle lies the optimal realistic solution. In other words, the best we can do with what we have.
If we're smart, we (via elected representatives) look at what other people have tried, and compare their results with our own. Then we make adjustments for differences in context. Then we see if there are improvements we can make in what we are doing. Try them, measure the results, and keep adjusting. We'll get asymptotically closer to optimal.
However, at least in the USA, we instead tend to pick a group of loudmouths who tell us what we want to hear, and elect them. Then they do whatever makes the most money for whomever financed their lies. Then they tell more lies to try to stay in power. If they fall out of power (usually because things beyond their actual control made them look bad) they engage in warfare against the enemy (whoever is currently in power) by any means fair or foul. Note that nowhere in there did they do any of the things that might have improved the lot of the people they were elected to represent.
So, health care in the USA will get better (overall) when the current form of government disintegrates and something else replaces it. Maybe. In the meantime, we still have the best care available on Earth, for the rich.
Re:This is painfully obvious. (Score:3, Interesting)
I got the stats from here [wikipedia.org], which in turn cites some U.S. govt sources. In particular, it looks like about 16% of households make $100k+, and another 11% make $75k-$100k, adding up to 27% making $75k+.
Re:Mathmatics of dissatisfaction (Score:2, Interesting)
I work on pension cases, suing on behalf of individuals who got screwed out of portions of their pensions when their plans violated the law.
Re:Mathmatics of dissatisfaction (Score:3, Interesting)
Now a lot of lawyers really are greedy, but it's not an inherent character trait of lawyers; it's an inherent character trait of people who are greedy, who in the past few decades went to law school solely because they thought they could make money. My criticism of law schools for lying to people is not because I think I personally deserve some fantastic salary and I'm not getting it; actually I'm making more than I planned on making when I was in law school. But I'd take a 50% pay cut if I could do what I went to law school to do, and I had been basically lied to that it would be possible, which is what I resent.