Are you happy? According to a Nobel winner...

[LARS]

... having $60,000 per year income is a base line for happiness. Below $60 thou. people get progressively more unhappy, BUT above $60 thou. people do not increase their happiness.

Guess I'm an outlier as my bare bones number for happiness is higher (and that's with a house paid off)...

And you?

Daniel Kahneman, Nobel Prize Winner: Happiness Can Be Bought For About $60,000 Per Year (VIDEO)

 

[mdm85]

For me it's not a set amount I need to make, I need to be getting ahead.

As long as I can put aside money for retirement and continually build my networth over the years, I'm happy.

I think I could do that, although at times it may be a struggle, on 40k.

 

[IndependentlyPoor]

Let's see,
$60K @ 4% SWD => $1.5MM
And there we have it, the 'optimal' retirement nest egg.
Ta Da!

 

[aaronc879]

I would be much happier at $60K/yr than I am at $40-something. I would be even happier above $60K.

 

[Masquernom]

Is that $60 K net, or before taxes?

 

[ziggy29]

I think it's silly to look at a fixed dollar amount. If you have a steady, reliable and secure income stream that can keep up with inflation while meeting the standard of living you are content with, great. Could be $100,000, could be $35,000, could be a million -- all depending on what you owe and what you value in your standard of living.

It's also easier to be "happy" with less when you remember that having "more" would mean w*rking for a few more years, in which case the incremental gain in lifestyle is a pittance compared to the agony of continued wage slavery needed to get there.

 

[Nords]

... having $60,000 per year income is a base line for happiness. Below $60 thou. people get progressively more unhappy, BUT above $60 thou. people do not increase their happiness.
Guess I'm an outlier as my bare bones number for happiness is higher (and that's with a house paid off)...

Having been on both sides of the issue, I think he's hit a sweet spot. Below that level you're having to make (possibly mandatory) reductions in quality of life.

Above that level you find yourself tempted (or even nudged) into taking on spending levels that don't really match your values. And even if you avoid spending it, you find yourself wondering how you're going to be a good steward of it.

Ironically my pension and (these days) our investment/rental income are right around $60K/year, and so is our spending. We'll see how that changes as dividends start to recover... and as our nest empties.

 

[rgarling]

...
It's also easier to be "happy" with less when you remember that having "more" would mean w*rking for a few more years, in which case the incremental gain in lifestyle is a pittance compared to the agony of continued wage slavery needed to get there.

and then there are those that actually like their work...

 

[fritz]

Median U.S. Household income around $50k
Household with net worth (investment assets) over $1M = +/- 7%
Not too many have achieved "happiness" yet........

 

[W2R]

I think it's silly to look at a fixed dollar amount. If you have a steady, reliable and secure income stream that can keep up with inflation while meeting the standard of living you are content with, great. Could be $100,000, could be $35,000, could be a million -- all depending on what you owe and what you value in your standard of living..

+1 Exactly!

So far, I haven't managed to spend even half that much when buying whatever I want. But this is meaningless because:

(1) I'm single and I am sure that a married couple would need more money. Also,
(2) my house is paid off. I would need more if I had to make mortgage payments. And
(3) I live in an area with moderate cost of living.

If I was married, had a $500K mortgage, and lived in Hawaii, NYC, or SF, I guarantee you that my expenditures would need to be higher to attain my present level of bliss.

I do agree with him that once you have a certain level of income, more income really doesn't make any difference in happiness level (unless it is enough that managing it becomes a headache). What that level of income may be, depends on the individual and also depends on the cost of living at their location.

Let's see - - at an SWR of 3% (for a nice long retirement), $60K/year means a nestegg of about $2,000,000.

 

[FIREd]

For us, $60K sounds about right. It's our target retirement income. It would easily covers our fixed costs and give us enough discretionary income to cover some extras that are important to us. Having a higher income would allow us to buy more stuff but, in the past, more stuff didn't translate into more happiness. I think that $60K is the sweet spot for us.

 

[aaronc879]

and then there are those that actually like their work...

I have not yet personally met anyone who would rather be at work than not.

 

[calmloki]

Thought the primary determinate of happiness for a person was comparison to one's peer group. If your neighborhood is all making ~$25k and you are making $35k life is good. If your neighborhood is all making $45k and you are making $35k, not so much. If Fritz' $50k median US income is correct, then that $60k number should be pretty true in most neighborhoods. Lots of different levels, and if you are floating at the top of yours you are happy. Level creep is the joy killer - I was happy with margarine till I had butter.

 

[easysurfer]

All I know is I'm happier now retired and living on a budget than while I was w*rking and not having to pay much attention to a budget. For me, it's a tradeoff, but one I'm happy to take.

 

[haha]

I have not yet personally met anyone who would rather be at work than not.

One of my sons would rather be at work than not, given adequate R&R. For this reason, plus his intellectual and personal qualities, he makes an incredible amount of money.

Ha

 

[Moemg]

I have not yet personally met anyone who would rather be at work than not.

I was happy at work for many years . It was only at the end that I got burned out and that was after forty years .

 

[GoodSense]

DH and I are cheapskates. We spend less than $40K now, and I expect that to remain the same when we ER. Spending more money actually makes me feel uncomfortable. I think I'm just frugal in nature. Even when I go on all-expense-paid work trips, I don't like to spend money.

I think the theory about peers is correct. Most of my peers are 30-year-olds who are either unemployed or paid $15/hour. I feel very well off in comparison.

 

[ziggy29]

and then there are those that actually like their work...

Yes, but I suspect that isn't the audience I'm mostly speaking to, given the title of this forum.

 

[Khan]

Thought the primary determinate of happiness for a person was comparison to one's peer group. If your neighborhood is all making ~$25k and you are making $35k life is good. If your neighborhood is all making $45k and you are making $35k, not so much. If Fritz' $50k median US income is correct, then that $60k number should be pretty true in most neighborhoods. Lots of different levels, and if you are floating at the top of yours you are happy. Level creep is the joy killer - I was happy with margarine till I had butter.

I have lived in a blue-collar neighborhood for more that 30 years. My retirement 'income' is ~$30K. I don't spend all of it. I could spend even less were I not lazy ( I pay folks for house & yard work).

 

[ziggy29]

Thought the primary determinate of happiness for a person was comparison to one's peer group. If your neighborhood is all making ~$25k and you are making $35k life is good. If your neighborhood is all making $45k and you are making $35k, not so much.

I need what I need, and I don't care what the other people around me have as long as it isn't at my expense. I became a lot happier when I stopped worrying about keeping up with the Joneses and decided to ease up and let them win.

 

[LARS]

I became a lot happier when I stopped worrying about keeping up with the Joneses and decided to ease up and let them win.

While it is true a certain degree of happiness is derived from comparisons to others, I realized fairly early in my career I wasn't going to catch Bill Gates, which took a lot of the pressure off and allowed me to retire early.

 

[aaronc879]

My peers are 30 year olds as well(i'm 30). The majority of them would have to get a significant pay raise to be making $15/hour. I make only slightly more in base pay but work weekends at time and a half and double time. If I lost my job i'd be lucky to find a new one making $10/hr so I live as if that's what I make. I spend $15K/yr after taxes and that's with a mortgage. Of course i'd be happier if I made more money. Not because i'd be able to buy more "stuff" but because i'd be able to save more and FIRE sooner.

 

[calmloki]

Lars & Ziggy - sure - I don't care about keeping up and bettering the Joneses either.... even do a fair amount of anti-consumer lifestyle stuff. If you are truly immune that's great, but down deep inside me I think there is some little grade school crowd of emotions giving my happiness some input. I think tv is responsible for much of the unhappiness in the US, as we are shown absurd levels of consumption as if they were the norm. Advertising is big bucks - there are crowds of very intelligent, very well heeled people out there working nonstop to fill us with desires where none existed before - level creep.

 

[ziggy29]

Lars & Ziggy - sure - I don't care about keeping up and bettering the Joneses either.... even do a fair amount of anti-consumer lifestyle stuff. If you are truly immune that's great, but down deep inside me I think there is some little grade school crowd of emotions giving my happiness some input

Sure, there is to some degree. And even if one can't *completely* overcome feeling "unhappy" because everyone around them has more than they do, some people are better at seeing the glass as half-full than others. These are people who are more likely to emphasize what they have than what they don't have. And while human nature probably won't let us completely ignore what we don't have, even if it's not a necessity, many people can and do place a lot more emphasis on the "I have enough" aspect of living than on the "they have more than I do" aspect of it.

Part of letting the Joneses win is the mindset that "I have enough and I'm not going to knock myself out or go deep into debt for more." I think many folks, if they could train themselves to see things this way, might not only shake their consumerist mindset but also find an inner peace, an epiphany not unlike what Thoreau experienced at Walden.

 

[easysurfer]

Yes, advertising such as TV tries to work on our psyche and believe we aren't happy until we get their product. For some things it works, for others it doesn't. For me, just one walk down the laundry detergent isle and noticing all the dizzying brands out there is nearly crazy. I'm happy just to get the value brand.