r/personalfinance • u/WunDumGuy • Feb 28 '18
An update to the $75k number after which more money doesn't buy happiness Employment
There was a study in 2010 that said $75k is the magic number after which if you make more money, it doesn't necessarily buy more happiness. According to this study, that number is $105k now for North American households. What do you think?
https://qz.com/1211957/how-much-money-do-people-need-to-be-happy/
8.5k
u/shimposter Feb 28 '18
This number seems silly because of the massive cost of living spread
$75k in SF might not be much, but $75k in rural Arkansas and you'll live like a fucking king. In fact, you might even be able to become king, I'll have to look into it
1.8k
Feb 28 '18 edited Jun 22 '19
[removed] — view removed comment
952
u/MulderD Feb 28 '18
The fun part of having a bigger and bigger house is you just have to buy more and more garbage to fill it up. And then you die.
310
u/mmmmm_pancakes Feb 28 '18
Not if you allocate increasingly large space to your VR setup! Then extra stuff just gets in the way.
You still die though.
15
u/yogtheterrible Mar 01 '18
That's where EA comes in to fill that virtual space with dlcs, season passes, and loot box stuff. We'll call it Sims VR.
→ More replies18
78
u/HabeusCuppus Feb 28 '18
My parents recently retired. They own six couches and four TV's with the fancy entertainment cabinets.
I could not fit six couches in my place if I tried. Let alone all the other furniture.
→ More replies→ More replies8
Mar 01 '18
I just have empty rooms in my house. I always think about renting them out but that would cut in to my alone time.
And then I die alone.
132
→ More replies204
Feb 28 '18
[deleted]
114
Feb 28 '18
[deleted]
→ More replies105
u/penny_eater Feb 28 '18
two words, friend: storage ottoman. just get about 10 of those fuckers and you can keep everything neatly stored away AND play "the floor is lava" like a fucking b o s s
→ More replies16
459
Feb 28 '18
This is the case before you have kids. Kids stuff takes up a ton of space. Seriously, as a parent, if you buy my kid a fisher price basketball net, know that, deep in my core, I hate everything about you.
187
u/deepsouthsloth Feb 28 '18
My God why isn't this higher.
we got him an indoor workshop/tool set playhouse that takes up a 7.5'x6' footprint, isn't it great!
Die.
20
→ More replies10
u/ProbablyMyRealName Mar 01 '18
They never even play with that shit. At least my kids didn't. No toy has held their attention more than 5 minutes since they were like 3.
→ More replies45
→ More replies22
Feb 28 '18
I feel you. We may or may not have mysteriously lost some giant room overtaking toys. Don't worry we're still overtaken by toys.
→ More replies105
u/MazeRed Feb 28 '18
I like to separate my computer from my bedroom/tv area. It helps me sleep better.
I also don’t really like having my gaming station in my living room. Maybe it’s because I grew up with a lot of space it’s what I’m used to. If I can make it happen I would prefer a room for each task(?), so that just being in the “study” would prime me to do work
95
u/martinsss123 Feb 28 '18
It's real science that separating the locations where you do specific tasks can help you to keep focused on them. You growing up in a bigger house probably means that you subconsciously know that you're more productive that way as well as that you're less used to having distractions while you work or sleep or whatever.
→ More replies19
→ More replies27
u/Redemptionxi Feb 28 '18
At 30 I just started doing this except more simplified. Keep my gaming/entertainment in my living room, and move to my bed room when it's time to sleep.
I've found myself going to sleep on time and getting a wayyy better nights sleep. All too often I'd find myself staying up until 2am and perpetually over sleeping before that.
1.4k
Feb 28 '18
[removed] — view removed comment
420
→ More replies46
132
u/cosmicosmo4 Feb 28 '18
The range of Cost of Living Index in the U.S. is roughly 60–100, so if we call it 105k * (COLI/80), then that's $131k in NYC, $128k in SF, and $83k in Huntsville, Alabama.
→ More replies61
116
Feb 28 '18
[removed] — view removed comment
→ More replies180
115
Feb 28 '18
The red neck king in Arkansas is a millionaire actually, he owns some sort of nick nack company. If anybody has ever been on the spring river and seen a guy in a speedo and cowboy hat on a huge raft with speakers that’s him
→ More replies17
u/WoopigWTF Mar 01 '18
I saw him last time I floated the Spring River and that visual is forever etched into my memory. Dude does not need to be out there in a Speedo. At all. If, however, you are the type who likes seeing chubby, trashy chicks exposing themselves, his entourage is the place to be.
→ More replies163
u/Sacpromoz Feb 28 '18
In SF 75k still means your broke, I lived in Mountain View making 84k after taxes and still was not super comfortable. Shit!!! rent for a 2bd apartment was close to 4k a month.
→ More replies75
u/mike54076 Feb 28 '18
Yep. Currently live in Mountain View and it's something like 3.5k for a one bedroom apt. If my company didn't pay my rent for me (on a temporary assignment) there's no effing way I could afford this.
→ More replies78
u/Dvanpat Feb 28 '18
I'm originally from Arkansas, so I wonder why you chose that as your example. However, I could be a millionaire and I'd be absolutely miserable in rural parts of Arkansas. I love Little Rock, Hot Springs and Northwest Arkansas though.
16
u/indianasloth Feb 28 '18
As a mid 20s male, I hated Little Rock for the 2 years I was there. It may be a big city compared to the rest of AR but thats it. It didnt have much of the big city amenities, just the drawbacks (crime, terrible highway system and infrastructure, etc). NWA is by faaar the best place in Arkansas imo.
→ More replies→ More replies82
u/Iboughtcheeseonce Feb 28 '18
National lender here. Your taxes are SUPER low. You can also get a 2,000 sq ft home for 103k. That would cost something like 405k on the west coast. D:
32
u/areyoumycushion Feb 28 '18
My 1800 sq ft townhouse is 550k in northern virginia - I'm not even in the city or in the nice part of the suburb 😭😭
→ More replies11
u/iSubnetDrunk Mar 01 '18
If we’re talking the NoVa area (Alexandria, Arlington, etc.), you are in the nice suburb. Come on over to South East and we’ll show you some not so nice suburbs. Over here, we consider all of NoVa to be rich.
→ More replies→ More replies58
u/FIaltf4 Feb 28 '18
From my experience, here in the LA area, 600k will hardly get you a cardboard box on 1000 sqft, I don't even want to know what 2000sqft would cost :(
→ More replies43
u/r4bbl3d4bbl3 Feb 28 '18
Just looked at some houses around Pasadena/Highland Park area, $900k+ for 2 bedrooms around 1000 sq/ft. Who the fuck is buying houses at these prices to sustain this market?
→ More replies→ More replies92
3.7k
u/secretWolfMan Feb 28 '18
Sounds about right.
Most places in the US, if your family makes the minimum "six figures", you'll have to budget for savings and luxury items, but you'll never wonder if you can pay basic bills.
1.2k
u/CrossCheckPanda Feb 28 '18
It seems worth noting that cost of living and buying power in the USA are not constant, so an average may not apply to everyone. In the California bay area or NYC people making 105k$ could likely still have some real budgeting concerns. In the Midwest or rural south, people making 75k$ can probably live and save with relative comfort.
Neither number is "magic".
536
u/katarh Feb 28 '18
Right. We're at around $105K for a household of two people, and that is a fairly comfortable existence in Georgia outside of Atlanta or Savannah. Money arguments are about home improvements and travel, not about "how are we going to eat this month."
→ More replies261
u/salezman12 Feb 28 '18
I also live in rural Georgia. Granted, I'm single, and prefer compact living (i WANT to live in a 500sqft apartment) but I make right around the 100K mark and there is very little, outside of lavish ridiculousness, that I could ever want but cant afford.
→ More replies72
→ More replies208
u/lg224 Feb 28 '18
This is correct. I made $130k in 2017. We live in NYC, wife is a student and we have a 3.5 year old. Sometimes I wish we lived somewhere else because my $130k would go a long, long way.
Certainly not a complaint. We're not broke and payoff all our bills monthly, but we're not saving as much as we could be thanks to NYC.
→ More replies184
Feb 28 '18 edited Dec 31 '21
[removed] — view removed comment
→ More replies81
u/TheVermonster Feb 28 '18
Right, but it can perhaps persuade the new company to offer more to lure you away. My wife applied for jobs where the average salary was about 80k. She makes 90k now, but the cost of living here is a good 50% higher than the lower paying jobs. They know people will move for them because 80k will feel like 120k compared to their current situation.
→ More replies66
Feb 28 '18 edited Jan 01 '22
[removed] — view removed comment
55
u/DodgersIslanders Feb 28 '18
This is very true. It's one of the reasons I'm in NYC. Exit opportunities are a real thing, and everyone I know who has left the city has had an above-avg salary wherever they went.
Ex: avg pay in Atlanta for X position is $60K, friend made $90K doing it in NY. When moving to Atlanta, friend got $82K and was able to say that it was honestly a paycut.
All of my friends who went NYC -> elsewhere had cases like this.
→ More replies424
u/WunDumGuy Feb 28 '18
One of the things that bugs me about this study is it never mentions household income. So when you said "family" just now, I'm not sure if it means household income needs to be 105k.
→ More replies1.0k
Feb 28 '18
[removed] — view removed comment
449
Feb 28 '18 edited Mar 08 '21
[removed] — view removed comment
→ More replies210
u/ritchie70 Feb 28 '18
That actually makes a lot more sense, and the numbers feel right.
Our household income is about $120K a year. It was around $200K a year when we were both working. If annual income were up another $60K I'd be a lot happier because all the money concerns would no longer be concerns. We could...
- easily afford newer cars
- not scrimp on vacations
- make substantially higher retirement contributions
and although those things perhaps shouldn't impact happiness, guess what, they do.
→ More replies179
u/landspeed Feb 28 '18
ooo i luv me sum scrimp
→ More replies56
u/DeusMexMachina Feb 28 '18
Vacay scrimp so gooood
77
Feb 28 '18
There's uh, scrimp-kabobs, scrimp creole, scrimp gumbo. Pan fried, deep fried, stir-fried. There's pineapple scrimp, lemon scrimp, coconut scrimp, pepper scrimp, scrimp soup, scrimp stew, scrimp salad, scrimp and potatoes, scrimp burger, scrimp sandwich.
→ More replies248
u/billthecatt Feb 28 '18
This is a pretty critical point that people miss. I wish I could upvote it 100x
→ More replies91
u/elswizyland Feb 28 '18
aka make the kids bring in an income
100
u/SwampDenizen Feb 28 '18
These coal mines aren't gonna work themselves, Timmy
→ More replies19
u/NorwegianPearl Feb 28 '18
There's no reason for the kids to not get back in the mines. It's clean coal now. We've got beautiful clean coal just ripe for the pickin
112
47
u/jableshables Feb 28 '18
105k * sqrt(2) = 148k
So if you were happy under the previous rule and married another happy person, you're both still happy under the new rule, but only if you don't have kids.
This checks out.
→ More replies37
194
u/TexasArcher Feb 28 '18
Can confirm... Currently make 55k as a bachelor, still buying the cheap ramen and not the fancy ramen.
→ More replies176
u/Kahluabomb Feb 28 '18
but you can afford to put an egg in the ramen now! and some sriracha!
→ More replies76
u/the_glory_of_panau Feb 28 '18
That's certainly a step up from college when I used to put a Kraft single in ramen. Those were dark times.
178
u/ratherbealurker Feb 28 '18
There has to be 50 other things just as cheap to put in that’s better than a kraft single.
That’s a deeper issue
→ More replies32
29
→ More replies26
u/Keith_Creeper Feb 28 '18
Look at Richie Rich over here with his Kraft singles. Buy a jar of spaghetti sauce like the rest of us paupers.
20
u/Funkymonk86 Feb 28 '18
That depends on how much of your income is dedicated to student loans. My wife and I make well north of this (we each work two jobs), but we pay over 2k in student loan bills each month. If we didn't have the second jobs, and thus were right around the 105k mark, even basic bills would be a struggle.
→ More replies→ More replies62
u/pm_me_sad_feelings Feb 28 '18
Can confirm, household income is right about exactly this (two people so 148.5k between us--I think we're slightly under but we also work in a low cost area) and we're basically just spending freely and budgeting for big purchases.
We've automated savings because we're both terrible at it now apparently and credit cards sometimes get left unpaid for a pay cycle or two if we don't pay attention (interest rates are relatively low so we take the interest rate hit rather than allow ourselves to dig into savings to pay them off), but overall it's pretty luxurious and I am enjoying this temporary stage of life.
The likelihood of this staying as is for many more years is low, but for now it's awesome and outside of marrying an alcoholic sociopath accidentally my life is pretty sweet.
102
u/np20412 Feb 28 '18
interest rates are relatively low so we take the interest rate hit rather than allow ourselves to dig into savings to pay them off
TBH this is a pretty terrible strategy when you can just pay them off, avoid the interest hit, and use the next month to replenish the savings.
→ More replies35
u/NearlyRemarkable Feb 28 '18
Yeah, you dig into your savings when you make the purchase, not when you pay the bill. Taking the interest rate hit is just digging further into your savings.
118
u/Agent_Smith_24 Feb 28 '18
outside of marrying an alcoholic sociopath accidentally my life is pretty sweet
You ok?
→ More replies25
u/Milton_Wadams Feb 28 '18
Set up auto-pay on those credit cards and forget about them, other than periodically checking for fraudulent purchases.
→ More replies→ More replies29
u/SheliaTakeABow Feb 28 '18
I married one of those. If you think the marriage is bad - I can tell you the divorce will be even worse.
→ More replies
1.6k
Feb 28 '18
I think there's a bit of a misunderstanding going on for a lot of posters in this thread. That $105K (or $75K, whatever) number doesn't mean you need that amount to be happy. What that number means is that once you've made that amount of money, the return on happiness for more money dissipates.
You can, in fact, be happy making less than $105K a year. Lots of us do.
→ More replies648
u/sdb986 Feb 28 '18
I can attest to this. Two years ago, received a promotion. Income steadily grew. House hold income was about $142,000. However, I was SO burnt out. I was working 13 hour days, six days a week. I was fighting with my wife near constantly. Never saw my kids. Never got to relax. Never enjoyed life. Was always exhausted and had no joy in my life. Two weeks ago, I took another management position that cut my household income back to about $117,000. Short term, I'm going to have to be careful, as our budget was set on the higher amount. However, I can already feel myself decompressing, and can feel happiness creeping back in to my life.
172
u/smokeymcgee63 Feb 28 '18
That's awesome. The cash you'll miss will suck, but the memories your kids will have from being able to spend time with you is priceless. One day you'd be 90 and loaded, and sit around with all your free time lamenting you didnt enjoy your life when you had the chance.
→ More replies107
u/birdiebonanza Mar 01 '18
Yes yes yes. I just took a $95k pay cut and some friends said that that fact makes them absolutely sick. But I LOVE my new company. I feel nurtured and whole and affirmed. I have no commute and my breaks involve petting my dogs. My marriage is quietly harmonious 89 out of 90 days. Do I miss the old paycheck SOME days? Sure - but the net is overwhelmingly positive, and I miss the old paycheck for mostly ridiculous reasons like “I wish it were smart for me to buy a Tesla S”. Thank you for affirming with your story.
→ More replies19
72
36
u/Ekrause13 Feb 28 '18
Dont forget being home more may save you money or cost you more depending on how you handled it before the change. Be extra careful if you're tight on budget to keep in mind the little things like that. Utilities bills going up for you home more, grocery bills increasing, but take out decreasing maybe? You may be less tight than you think. :) you got this friend, just remember the end result will be a much less stressful life once your budget gets back to your new income level. :D
→ More replies69
→ More replies17
u/fuckswithboats Mar 01 '18
I think there is a certain amount of money needed to get by and then everything else becomes extra shit or paying people to do things instead of doing them yourself, saving money, etc.
So the difference between $50-$80k is WAY bigger than the difference between $115-145k in my opinion.
The difference between $15k-$45k is like worlds apart.
2.5k
u/dualpegasus Feb 28 '18
I've always said that money doesn't buy happiness, but it sure staves off a lot of unhappiness.
217
879
u/aagusgus Feb 28 '18
Money fixes a lot of problems that cause people and families stress. Car breaks down, emergency room visit, dishwasher stops working...money fixes most of those things.
395
Feb 28 '18
[deleted]
205
u/DJsilentMoonMan Feb 28 '18
By your grandfather's definition of a problem, not having money to throw at a problem is not a problem because it could be fixed by throwing money at it
→ More replies35
212
u/mrdog23 Feb 28 '18
For a while I had a job that paid pretty well. It was an amazing feeling not having to worry about unexpected costs so much. Money won't solve your personal problems, but for everything else, there's Mastercard.
More recently, I separated from my wife and lost my job in a 6 month span. I was tapped by the former, and caught completely flat-footed by the latter. I've seen both sides of the coin, so to speak. There ain't no stress like money stress.
140
u/2legitportu Feb 28 '18
Completely agree. I finally got a full time job making $30k a year when my husband who made $100k+ was let go and basically blacklisted. We survived with him unemployed for years on less than half our original income (several nice size raises for me but still don’t make near what he did). It almost destroyed our marriage and it’s wrecked my health. He just got a job and starts Monday. It feels like a huge burden is lifted.
→ More replies37
→ More replies22
Mar 01 '18
Welcome to my life. Cheated on, dumped, then laid off. I applied for EI almost 2weeks ago and haven’t heard from them. If they deny me there’s a damn good chance I will be homeless next month. Hell, I was almost homeless today. Landlord was trying to be a dick and I told him to take me to court. So, I have a month to get something figured out. Haha.
Last year I paid off nearly $20,000 of debt. This year, I can barely afford to eat. Amazing how quickly things can turn around.
Good luck man.
→ More replies→ More replies47
u/evilyogurt Feb 28 '18
it's amazing how you can see the stress on ppl's faces who are behind with money. and the contrast to someone who doesn't feel any money stress. it can be night and day
→ More replies270
u/im_in_hiding Feb 28 '18
"He got me invested in some kind of fruit company. And so then I got a call from him saying we don't have to worry about money no more and I said, 'That's good. One less thing'."
→ More replies78
u/ffn Feb 28 '18
Forrest Gump and Lt. Dan ran a successful shrimping company, at its peak owning at least 12 shrimping boats (there could be more boats that don't have the name "Jenny"). Conservatively assuming that they sold the business at a liquidation value of $100,000 per boat and split the proceeds, they both netted $600,000 from the sale of their business (it's obviously way more than that considering they made it to the cover of Fortune magazine).
Forrest Gump came out in 1994. Assuming that Lt. Dan invested their entire net worth into $AAPL in 1994, they would each be worth $120,246,486 today.
tl;dr: Forrest Gump definitely doesn't need to worry about money no more.
→ More replies30
u/potionsmaster Mar 01 '18
I've seen people point this math out before, but the problem is that (if memory serves) the film shows Forrest going to his mailbox and opening a check from aapl, presumable a dividend check. If living off the dividend from aapl was Forrest's only income stream that becomes problematic at the end of 1995 when aapl discontinues its dividend program.
If we assume that Forrest needs approximately 4% of that $600,000 nest egg to live on ($24,000) per year, then Forrest (alas) is going to need to sell off a sizable portion of his shares in order to keep the lights on.
In fact, until Jobs returns to Apple, the stock slightly outpaces inflation from 1994–2003-ish, save for a pretty sizable blip during the dot com era.
Yes, starting in 2003, aapl stock begins its meteoric trajectory to its current valuation, though the dividend doesn't return until 2012, so Forrest is selling his stock all the way up.
If Forrest never sells, he's still got a truckload of money in 2018, but probably closer to $10-20MM, not $120MM.
This, of course, is contingent on Forrest never selling off his share in Apple through the late 90's and early 2000's as it generally underperformed the market. Also contingent that he only needed to live on $24K per year, though I suspect he is/was a man of modest needs.
→ More replies59
137
Feb 28 '18
I've never seen a rich man crying in his Bentley. I have seen a man crying in a Honda Civic.
→ More replies81
u/MaskeyRaid Feb 28 '18
I'm just saying, give me a Bentley and a bunch of money, and I'm sure I can show you something you've never seen before.
→ More replies81
u/Vindictus7 Feb 28 '18
Money can buy happiness, but it doesn't necessarily buy happiness. And it's definitely not the only way to get happiness.
My personal thoughts.
15
u/PM_ME_YOUR_SUNSHINE Feb 28 '18
Its bought me happiness. Going from making $0 and eating debt to make just a little bit of money at a decent internship as a student... it feels great to not fear rent or other bills and not check my balance everytime I feed myself.
Now, a catastrophe could take that away from me. But I'm perfectly content right now.
→ More replies→ More replies56
u/HelloImRIGHT Feb 28 '18
Money buys the things we need to survive comfortably. Once we have enough money to do that - the rest is up to us. We can buy things that make us feel happy, I don't think that makes us happy though.
Thats how I think of it.
→ More replies57
Feb 28 '18
The most valuable thing money can buy I think is time, opportunities, and freedom to pursue or not pursue interests. But, the key is having enough of it to be able to be in a position where money's biggest asset isn't material goods, but more of something that frees people from the daily obligations they don't really have a choice in not doing.
Most people just get a small taste of that aspect of money, and it's just something that provides some small relief from the daily money worries and lets them maybe work a few hours less.
→ More replies→ More replies17
u/min3rs13 Feb 28 '18
Money doesn't buy happiness but I would rather be rich and happy than poor and happy, just saying!
→ More replies
566
Feb 28 '18
[removed] — view removed comment
→ More replies178
Feb 28 '18
[removed] — view removed comment
171
→ More replies18
53
u/snes_chamers Feb 28 '18
Here's a little rant for people who haven't had that much experience in the work force, especially the types of jobs that require degrees.
I work with interns and lots of newly graduated college students and, unfortunately, there's a skewed idea about the types of work that earn lots of money.
Many dream about the six-figure salary, but few actually experience what it's like to work a job that earns six-figures. I'm sure there are a plenty of lucky people who've found a high-paying, stressful but manageable careers and they will chime in here, that's for sure. But from my experience, very few people in 100k/year jobs have well-rounded lives. Something usually gives. Most importantly, one should know that people in these levels dedicate their lives to their jobs. Work is #1. I can't emphasize that enough. And to get to that level, people make work #1 from the get-go, way before they make 100k/year. It takes a lot of faith and a lot of sacrifice.
One might ask at some point, what really makes you happy? If you're constantly running away from poverty, the idea of six figures is very comforting. I have friend who's owned bad-ass dream cars and paid for apartments for his girlfriends (apartments he would visit when he felt like it). Some people have access to every material possession you can think of and even things you would never imagine. Yet, many of these people grow to depend on these outward things. They can't stop working. They manage their households like they manage their firms. They make playdates for their children with the same aggression and anxiety as they feel when negotiating work schedules. They don't stop working.
→ More replies
331
Feb 28 '18
[deleted]
→ More replies91
u/higherlogic Feb 28 '18
That’s what’s up. You can make $200k/year but if you don’t have at least 6 months of savings to cover your ass IF you get fired to cover rent, utilities, food, insurance, etc., that can be extremely stressful. It’s the difference between an emergency and an inconvenience.
21
u/Duckboy_Flaccidpus Mar 01 '18
Folks just need to live below their means. I work with a kid who is leaving to a better job that pays more. Gripes from time to time about needing more income, well, he's getting it now - but not yet - and already bought a motorcycle and requisite accompaniments. It's just the opposite of financial prudence and outright irresponsible, now I don't know how much it costs but he doesn't get shoddy toys.
→ More replies
441
281
u/thishasntbeeneasy Feb 28 '18
I've been around 75-100k for two people for a while, and would much rather have time instead of more money. The ability to just take a few weeks away totally unconnected from work a few times a year would be golden.
64
u/revival-tnx Feb 28 '18
I feel I should be making about $10k/yr more, but I get 5 weeks PTO right now and my boss lets us work from home if needed. Hard to take a pay raise at another job if I will start with less PTO.
→ More replies17
u/thishasntbeeneasy Feb 28 '18
I left a job with 32 paid days off per year to use for anything holidays/vacation/sick etc. Just wasn't a place I could stick around in but it hurt so hard to leave that behind.
→ More replies48
667
Feb 28 '18
I don’t think one number is a good indicator. 105k where I’m from is different than 105k where I live now.
497
u/cinnapear Feb 28 '18
Shit, if I made 105k where I grew up, my only worry would be getting robbed.
→ More replies66
u/Baxxb Feb 28 '18
It’s like in 2 Guns when Marky Mark says to Denzel “Shit that’s a lot of money. I was trying to steal $3million. $3million you can get away with. This here is the kind of money people will chase you to the end of the earth for. I didn’t want to steal this much money!”
→ More replies96
→ More replies92
u/icanhe Feb 28 '18
Completely agree. I make right around that but live in Brooklyn.
Sure, I’m comfortable, but I also have a roommate and could certainly use a few more vacations.
→ More replies80
Feb 28 '18
On the flip side, my hometown in Indiana, 75K would be living like a king and taking a vacation at least once a year.
→ More replies169
Feb 28 '18 edited Sep 18 '23
[removed] — view removed comment
→ More replies169
Feb 28 '18 edited Feb 28 '18
Where do you live where living like a king is a low bar? Lol
I guess a better example would be my friend;
Makes about 90K a year. Has a 5 bedroom, 3 bathroom house with an in ground pool and 3 acres of fenced in property. Trades in and drives a new car every 2 years, usually a truck. Owns multiple ATVs. Owns a boat. Has an amazing retirement account.
His one vacation a year is always 3-4 weeks in a different country. Last year was Japan. The year before that was Italy.
Me making over 100K in California lives nowhere near those standards.
→ More replies
62
Feb 28 '18
[deleted]
34
u/Rarvyn Mar 01 '18
The article says for a household of >1 person, multiply by the sqrt of the household #. So your new goal is actually $210k.
It's fine though. Consider it a positive if you enjoy your life now: Your happiness has room to improve, and life can be even better. If you were at the new goal #, it would imply this is the best it could be.
→ More replies15
u/lets_hit_reset Mar 01 '18
I made it to 80+ with like a 40% raise the same month we had a second kid. So, it was pretty much like nothing changed.
→ More replies12
u/NYCtoTX Mar 01 '18
Holy crap do I feel where you're coming from lol. 100k+, 3 kids, sole breadwinner. It disappears so fast..
If I was a single, childless guy I'd be living like a Sultan.
→ More replies12
u/Mlefurr Mar 01 '18
Oh man, am I sympathetic to my husband. Works so hard for it to come in just to see it fly right out. We live in rural Missouri so it's not like our expenses are insane, but he could definitely be having a lot more fun with his money. I just remind myself frequently that we had children young, and we can retire young. I can just cut ties with them at 18, right? That's how that works?
→ More replies
143
u/xxdeathknight72xx Feb 28 '18
I'm pretty happy at 42K honestly
I can pay what bills I have.
I own my mobile home (never wanted anything bigger than 1 story).
Have a good car with good gas mileage
In short, my basic needs are met. Anything that would make me unhappy wouldn't have anything to do with money but would be something with my personal life.
Would it be nice to have no debt - of course
Does it make me unhappy - of course not
→ More replies66
u/thecatgoesmoo Feb 28 '18
I think you've just found a way to be happy in your situation, which is a good thing. The article isn't saying that you can't be happy at less than 105k, its just that your incremental happiness starts to drop off after that point.
Meaning if you went from 42k to 105k you'd feel a noticeable increase in happiness (could travel more, have no debt, save more, invest so you don't have to work for money, etc) but after that the additional income wouldn't add as much to happiness.
→ More replies
18
u/newsjunkee Mar 01 '18
At some point it's not how much you make, it's how much you have accumulated. Making 105 a year and spending 110 means you are broke and in debt. Making 60 and spending 50 means you are eventually rich. That has been my methodology and it has worked quite well.
→ More replies
32
u/gigitygigitygoo Feb 28 '18
I made $106k last year and can agree. The difference between $75k (which I made the year prior) and having $30k more is significant. For reference I'm single, no kids, and live in Florida.
The biggest difference for me is that I no longer check my account balance on a regular basis because I know there are sufficient funds to cover my bills. This was the biggest change and a huge stress reliever.
I was able to pay off some debt which gave me even more money at the end of each month to save.
I don't really cook anymore and have bought myself a few nice things without thinking twice about it.
I used to lose sleep over upcoming bills and literally tracked every single dollar spent. I cannot describe how much of a relief it is to not have to worry about it anymore.
→ More replies
31
98
u/mredding Feb 28 '18
What do you think?
I think it's startling that the satiation point jumped $30k in 8 years.
→ More replies84
u/TheMeiguoren Feb 28 '18
For reference, $75k adjusted for the last 8 years of inflation comes out to about $86k.
→ More replies
16
u/auncyen Feb 28 '18 edited Feb 28 '18
I want to look at the study itself, because I feel like there's a couple things that are interesting/important.
One is the writers do distinguish in the article between day-to-day happiness and satisfaction with how one's life is going. 75k was the "happiness" figure. Satisfaction can continue to increase beyond that.
Also 85% of the respondents reported feelings of happiness. Not making the 75k doesn't exactly make people miserable. But the authors note: "More money does not necessarily buy more happiness, but less money is associated with emotional pain. Perhaps $75,000 is a threshold beyond which further increases 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." So yes, there are a ton of non-income factors that would play in here (if you were born into a loving family, it could easily be less expensive for you to spend time with people that you like). More income can help you buy a way out of a problem...but if you don't have many problems to begin with, my guess is your "magic number" might be lower. Another non-income factor that I don't see in the article: what your job duties actually entail. I haven't hit $105k from leaving retail, but I have stopped having to deal with customers every day, and let me tell you what a happiness booster that is. I know high-income jobs can have their own stressors, but I have to wonder how much of the reported stress stems from the respondents' jobs.
...Also, pretty much everyone seems to be stressed out anyway according to the results. Those are some very low numbers in figure 1 for "stress free", even in the high income range.
Bonus: another site did an interesting table ranking states and their purported happiness based on their col and income.
→ More replies
88
u/DarwinisticTendency Feb 28 '18
Last year my wife and I made about 120k combined and lived comfortably but worried about some stuff. I got a raise and now we make 155k and I feel more secure but I’m just as happy with a little less stress.
→ More replies
44
u/S_ctrnsitgloriamundi Feb 28 '18
Give me 200k at my current job and I will be the happiest man alive.
→ More replies
125
u/gdfishquen Feb 28 '18
I feel like any one number to represent North America isn't going to be fully correct since there is such a huge range in basic expenses between regions. For example, it's incredibly difficult to find a starter home in my area for under 200k so you need a higher salary to keep from being financially stressed. If we lived in an area like the south or Midwest where home are much cheaper, we could make less much but still be in the same happy place financially.
28
u/r4mram Feb 28 '18
The number they give is a baseline. Obviously you can use a cost of living adjustment factor to get a more accurate number for your geographic location...
→ More replies→ More replies48
u/Lev_Davidovich Feb 28 '18
I don't know where you live but I would kill for a $200k starter home. Here in Seattle the median home value is $722k and you'd be hard pressed to find anything under $500k.
As such, I think you need more than $105k in Seattle.
→ More replies
44
u/theflyeman63 Feb 28 '18
Hard to pinpoint this. If you made this much in Indiana, and had your savings right. You could afford to save college for yours kids, have luxury items, a nice home, pay all your bills and still have money that you don't know what to do with.
21
Feb 28 '18
Even in Indiana, I think that's stretching it. 105k is certainly a great salary in Indiana and enough, I think, to not have many financial stresses, but I doubt many people at that income "have money that they don't know what to do with."
→ More replies→ More replies39
u/VoltaicShock Feb 28 '18
And if you live in a HCOL area in America, you would not have enough to save for college, have luxury items, a nice home or pay all your bills.
→ More replies8
u/theflyeman63 Feb 28 '18
Yeah I can see that. That is why it's so hard to pinpoint to me. Can live a totally different life with that amount depending where you live.
→ More replies
41
u/Vindetta182 Feb 28 '18
Just as I jumped from 60k to 80k... Thought i finally reached the promise land
→ More replies
19
80
u/iwontbeadick Feb 28 '18
75k is about twice what I make now. I could do so much with that money. I think whoever adjusted that number had some lifestyle creep. I live in an average COL area, not super high or low. With 75k I could pay off my student loans this year, instead of in about 5-6 years. I could save more for retirement than just 10% in my 401k. We wouldn't be overflowing into my credit card every month. We could do something other than a staycation in june. We could put a fence in to make my dogs lives better. The list goes on and on. And my opinion is obviously very subjective, but 105k sounds like a number for a high col area.
→ More replies
9
Feb 28 '18
If I were able to pay bills, pay down/off debt, put away for savings/emergency fund, have a entertainment/buy shiny things budget AND put food on the table? I'd be in that zone no matter the total salary. Right now just bills and barely putting food on the table. I'll upgrade from instant ramen or needing help from family someday.
15.3k
u/[deleted] Feb 28 '18
I was hoping to achieve the 75k and be happily complacent in my life. Now it's 105...always dangling that carrot.