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Old 09-09-2010, 11:50 AM   #21
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Yeah I was going to say I bet people's happiness would peak once they were FI
No lower threshold on annual spending once you're RE? You may disagree that it's $75K/yr, but happiness and FIRE vs working is a separate discussion...
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Old 09-09-2010, 02:06 PM   #22
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Having thought on this a little more, if my salary suddenly doubled I *would* be a lot happier. Not because my current quality of life was any different but because it would enable me to set enough aside to retire several years sooner. The knowledge that the FIRE math was going to work many years sooner would certainly add to my happiness.
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Old 09-09-2010, 02:51 PM   #23
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Having thought on this a little more, if my salary suddenly doubled I *would* be a lot happier. Not because my current quality of life was any different but because it would enable me to set enough aside to retire several years sooner. The knowledge that the FIRE math was going to work many years sooner would certainly add to my happiness.
That's my thought exactly. In my case $75K/yr would be a 37% increase in pay so I would be very happy being able to save so much more and retire sooner.
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Old 09-09-2010, 03:00 PM   #24
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No lower threshold on annual spending once you're RE? You may disagree that it's $75K/yr, but happiness and FIRE vs working is a separate discussion...
My comment was directed towards the working stiffs (seems to be the target audience of the article) hence the FI notation, not FIRE

People can be financially independent & still work but day to day I'm sure it's different knowing you are covered minus getting hit by a bus
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Old 09-10-2010, 10:10 AM   #25
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nisiprius, on the boglehead forums, has this quote in his signature:

Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

I think it sums things up pretty well.

edit: oops GusLevy already mentioned this!

I like johnoh's observation. I never thought how money could lead to a more complicated lifestyle. But, I believe that the money isn't the problem but the lifestyle itself.
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Old 09-10-2010, 10:32 AM   #26
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Sheesh, I must have been miserable all my life. Never made 75K in any year. Since I did not know, I was happy most of the time. OTOH DW made/makes more than that retired.

Money does not buy happiness, but let's you rent it for a while. See Larry King's eight wives. Or is it nine?
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Old 09-10-2010, 11:45 AM   #27
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Sheesh, I must have been miserable all my life. Never made 75K in any year. Since I did not know, I was happy most of the time. OTOH DW made/makes more than that retired.

Money does not buy happiness, but let's you rent it for a while. See Larry King's eight wives. Or is it nine?
Did not read the article, but I would bet they are talking about family income... so you were not miserable all your life (that is if you DW was making enough back then.. if not, nevermind)
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Old 09-10-2010, 12:23 PM   #28
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My total income (full-time work plus nonwage income) first hit the $75k mark back in 1997. That same year my nonwage income exceeded $10k as the stock market was booming following my increasing purchases into stock mutual funds.

I used a lot of my gains in those years to pay down 2/3 of the rest of my mortgage, with the remaining 1/3 of paid off in early 1998. This big reduction in my monthly expenses was a big step towards being able to RE.

However, it was in 1997 when I started to get burnt out at work. I actually worked PT for a few months in 1998 before resuming FT work. I would actually max out at just under $100k in 2000 counting nonwage income, as my level of happiness dropped from being burnt out.

In 2001, I would cut my pay by about 35% to switch to PT and boost my happiness. However, as my income kept rising again in the next 6 years, but only to about $68k (nearly half was nonwage), my level of happiness was dropping again due to further burnout even from PT work.

In 2008, I had enough of the burnout and PT work, so I took a $300k payout from company stock and retired. My income for 2009, all nonwage in my first happy year of being ER, is under $40k, about the same as my total income in 1988, coincidentally another very happy year for me.

So perhaps $75k is a big turning point for me?
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Old 09-10-2010, 05:56 PM   #29
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I think the point is that at that income level, most people can pay their bills, buy a home, own cars, save a couple of bucks and not struggle.... the basic American Dream.
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Old 09-10-2010, 06:07 PM   #30
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Apologies in advance if this question has been answered in the past : when people mention numbers on this website (e.g. $75k/year in this thread), are these figures gross or net by default ? Do you factor whether these figures are for 1, 2 or more people part of the same family unit? Thank you for letting me know.

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My income of my last year of w*rk was ~$75K (2004).
The way it made me happy was that I was saving almost half of it.
It would be nice to have $75K income now, but I'm not sure what I would do with it.
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Old 09-10-2010, 06:15 PM   #31
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Apologies in advance if this question has been answered in the past : when people mention numbers on this website (e.g. $75k/year in this thread), are these figures gross or net by default?
There is no default. It usually depends on what number they are mentioning. For example, if someone quotes income (as did Khan), it is usually gross - if expenses, it is usually net. If you aren't sure, nothing wrong with asking for clarification.

Same goes for the number of people - when in doubt, ask.
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Old 09-10-2010, 06:32 PM   #32
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Apologies in advance if this question has been answered in the past : when people mention numbers on this website (e.g. $75k/year in this thread), are these figures gross or net by default ? Do you factor whether these figures are for 1, 2 or more people part of the same family unit? Thank you for letting me know.
In my case: gross income and one person with varying amounts of cats.
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Old 09-11-2010, 10:00 AM   #33
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I found a Wall Street Journal that adjusts the $75k/year value for various cities in the US based on cost-of-living:

What Salary Buys Happiness in Your City? - Real Time Economics - WSJ

It makes sense that it would depend on where you live, but $124k/year for Honolulu?

I would think I could enjoy the nice weather on a lot less...
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Old 09-12-2010, 02:05 PM   #34
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I think the article completely misses the mark, at least for me:

Last year I was making more than $75K while w*rking.
This year I have retired on less and I am 1000% happier.

For me, the size of my income while w*rking was trivial compared with the freedom of FIRE with a decent income.
For those of us who did not / will not receive an inheritance, the value of a higher than $75k salary was high because it enabled FIRE. If I'd been making $40k or $50k, I'd still be working.........

Making >$75k made me very happy while I was making it because it was my only path to FIRE, and even then it took me until I was 58 yo.
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Old 09-12-2010, 02:27 PM   #35
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For those of us who did not / will not receive an inheritance, the value of a higher than $75k salary was high because it enabled FIRE. If I'd been making $40k or $50k, I'd still be working.........

Making >$75k made me very happy while I was making it because it was my only path to FIRE, and even then it took me until I was 58 yo.
I'm making <$50K/year and i'm still on pace to retire by early 50's. At most i'll receive an inheritance of mid 5-figures so that's pretty much a non-factor. It's possible to retire on under $50K/yr with no pension or inheritance, you just have to want it enough.
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Old 09-12-2010, 04:14 PM   #36
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For those of us who did not / will not receive an inheritance, the value of a higher than $75k salary was high because it enabled FIRE. If I'd been making $40k or $50k, I'd still be working.........

Making >$75k made me very happy while I was making it because it was my only path to FIRE, and even then it took me until I was 58 yo.
Wow, I guess you haven't read my posts much, or just don't know me very well, to make a comment like that. My unexpected inheritance didn't allow me to retire even one day earlier than my original 100% self-funded ER plan, which included no income, house, or possessions from my past marriage. Despite efforts to increase my spending, I haven't really spent any of my inheritance and probably won't.

Making >$75K was a lot better than making $40K (imagine that!). But that had nothing to do with when I could or couldn't retire since I would have adjusted my planning accordingly (like Aaron is apparently doing).

I am still orders of magnitude happier now that I am retired, even though my income is less, because now my time is my own.
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Old 09-12-2010, 07:08 PM   #37
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I'm making <$50K/year and i'm still on pace to retire by early 50's. At most i'll receive an inheritance of mid 5-figures so that's pretty much a non-factor. It's possible to retire on under $50K/yr with no pension or inheritance, you just have to want it enough.
Of course it's possible to retire on under $50k/yr with no pension or inheritance. But it isn't a matter of wanting it enough. It's a matter of chosing to live your life in a style that allows you to accumulate enough to achieve FIRE at that income level. And that's a personal decision. I chose to be responsible for others, raise a family, pay for my son's college, travel and on and on. That's how I wanted to do it. You've mentioned your life style a number of times, very different from what I chose, and I certainly respect that you should live your life as you wish.
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Old 09-12-2010, 07:16 PM   #38
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Of course it's possible to retire on under $50k/yr with no pension or inheritance. But it isn't a matter of wanting it enough. It's a matter of chosing to live your life in a style that allows you to accumulate enough to achieve FIRE at that income level. And that's a personal decision. I chose to be responsible for others, raise a family, pay for my son's college, travel and on and on. That's how I wanted to do it. You've mentioned your life style a number of times, very different from what I chose, and I certainly respect that you should live your life as you wish.
Agreed. There are many different roads to take to FIRE.
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Old 09-12-2010, 07:19 PM   #39
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Wow, I guess you haven't read my posts much, or just don't know me very well, to make a comment like that. My unexpected inheritance didn't allow me to retire even one day earlier than my original 100% self-funded ER plan, which included no income, house, or possessions from my past marriage. Despite efforts to increase my spending, I haven't really spent any of my inheritance and probably won't.

Making >$75K was a lot better than making $40K (imagine that!). But that had nothing to do with when I could or couldn't retire since I would have adjusted my planning accordingly (like Aaron is apparently doing).

I am still orders of magnitude happier now that I am retired, even though my income is less, because now my time is my own.
I'm sorry if I misunderstood what you were trying to say. I was only trying to emphasize that for some of us, only a significant salary during some part of our working years allowed us to deal with the expenses of the life style we chose and still achieve FIRE. So, getting into a position to earn more than the $75k (the figure the author mentioned) during a portion of my career was an extremely happy event for me.

I disagree with the author. My happiness increased as my salary increased above $75k. And nothing/little was spent friviously.

Again, sorry if there was a misunderstanding.
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Old 09-12-2010, 10:37 PM   #40
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No problem.

The article said,
Quote:
It turns out there is a specific dollar number, or income plateau, after which more money has no measurable effect on day-to-day contentment.
The magic income: $75,000 a year.
So anyway my response to that assertion is that although my present income is less than $75K/year, additional income just wouldn't make me any happier. I am buying anything I want and not spending my full income anyway, so more income would not make any difference to me at this point. It would just be on paper, KWIM?

For me happiness is tied more to

(1) being able to control what I choose to do with my time, and
(2) minimizing my wants through introspection and searching out inner peace,

than to spending a lot on cr*p stuff that I have to store and take care of. I enjoy owning my stuff, I admit it, but I try not to let my stuff own me. I am nowhere near 100% successful in that but I try. I find that I am surprisingly happy and content.
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