Money and happiness just how correlated are they...

[Totoro]

75k seems so arbitrary.

Wouldn't that number actually represent the level at which you significantly outearn (say 50%) your typical neighbor?

i.e. if you are them Joneses that others want to keep up with, happiness ensues ..

So in Nepal (just throw out an example) it would probably be 10k or so ..

 

[Gumby]

75k seems so arbitrary.

Wouldn't that number actually represent the level at which you significantly outearn (say 50%) your typical neighbor?

i.e. if you are them Joneses that others want to keep up with, happiness ensues ..

So in Nepal (just throw out an example) it would probably be 10k or so ..

You just need to make one dollar more than your sister-in-law's husband.

 

[2017ish]

Makes sense to me. Basically we live off of the "happiness requirement" in CA (+ a small amount, call it the SoCal tax I guess) and save the rest. Makes moving to [some part of Tennessee other than] Nashville sound appealing!

We love it here, but the housing cost increases in the past 5 years likely make the "happiness requirement" higher than most of the state. I doubt we'd remain "happy" here in retirement on 75K, esp. if budgeting 2K a month on health costs.... (Then again, that would be substantially less than our planned retirement spending and cutting from the baseline makes happiness harder, as alluded to by many above!)

 

[Danmar]

Well, if I had multiple houses or traveled to 50 different countries while flying first or business class on vacation, I suppose I could boast about those accomplishments. But, unfortunately, I don't, and having a 2003 Jetta with 300K on the odometer is a show of my accomplishment in frugality.

And, by the way, it is still in very respectable condition as I keep the maintenance up. But, it's not the *usual* frugal car as it has a turbocharged diesel engine, 5 speed manual transmission and larger fuel injector nozzles.

If you were suggesting that I have boasted in this way (sounds like it), I think you are wrong. I certainly didn't hijack the thread if I did. This thread is about happiness not mileage. Your comment was uncalled for.

 

[Danmar]

Having enjoyed a wide range of incomes over the years (from poverty level to top 1%), I can say from experience that more money has always made me happier.

That being said, for us, there was definitely an inflection point where the utility of more income started to diminish greatly. Even when our income was high enough to remove virtually all constraints on spending, our spending settled naturally in the upper 5-figure range when we lived in the South and at the bottom of the six figure range when we lived in the Bay Area.

Also, happiness is the sum of many more factors than just money. While happiness might increase with more money, the stress of a high-paying job might affect happiness negatively by taking a toll on relationships, health, job satisfaction, etc... By retiring early, my wife and I have accepted a much lower income, which affects our happiness negatively, I have no doubt, but the lower stress level and greater freedom more than make up for it.

Well said and on thread topic. Thanks.

 

[nash031]

We love it here, but the housing cost increases in the past 5 years likely make the "happiness requirement" higher than most of the state. I doubt we'd remain "happy" here in retirement on 75K, esp. if budgeting 2K a month on health costs.... (Then again, that would be substantially less than our planned retirement spending and cutting from the baseline makes happiness harder, as alluded to by many above!)

True, Nashville isn't equivalent to the rest of the state, but that said, it's not equivalent to SoCal either in terms of cost of living! There are some attractive things about that area (heck, they named the city after my internet handle!) and we've got our eye on it for a prospective move in 3.5 years when I change jobs (or retire altogether).

 

[Sarah in SC]

I'd like to brag about my 1992 Thomas school bus that has 250,000 plus miles on it. In it, we have visited 16 countries! But not exactly first class...

Happiness is hard enough to quantify, let alone attach a dollar figure to it.

 

[NW-Bound]

75k seems so arbitrary.

Wouldn't that number actually represent the level at which you significantly outearn (say 50%) your typical neighbor?

i.e. if you are them Joneses that others want to keep up with, happiness ensues ..

So in Nepal (just throw out an example) it would probably be 10k or so ..

You just need to make one dollar more than your sister-in-law's husband.

Yes, I think there's a lot of truth in that.

Even the most basic car nowadays lets you get from point A to point B reliably and in comfort. A basic car for around $20K gives you a lot of comfort and conveniences compared to a model T of yesteryear. And not everyone could get a model T back then. So why are people drooling over these fancy-schmancy cars, if not because their neighbors have it? One feels pretty good driving a Tesla, but will he feel the same when his neighbors start jetting around in their personal Jetson flying saucers?

Same thing about homes. One needs to visit kings' castles and early-20th century billionaires' mansions to see how comfortable the modern home is.

I can go on and on. And we still want more.

 

[RobbieB]

And that's a good thing, else we'd still be living in caves and crapping in the bushes.

 

[FUEGO]

And that's a good thing, else we'd still be living in caves and crapping in the bushes.

There is some appeal to that in certain circles.

 

[RobbieB]

Yes, the much coveted "simple life"

 

[papadad111]

Money is not important... until you do not have any. Then, all you can think about is where and how to get some.

I like to have enough, so that I can clear my mind to think about something else. Like designing and building a DDS/PLL hybrid synthesizer, just for the heck of it. Can't be thinking about travel all the time, ya know?

Great points ... On money ...

Now, What's the DDS synthesizer going to be used in ?

 

[rodi]

DH and I had a discussion about this recently. We don't have much income (since we're retired) but when we were working we tried to live on 1 salary - and we both worked 80% schedules - so it was close to 75-80k/year. We were happy.

On the assets front. Our investments are smaller than a lot of people here (excluding the house). The house isn't fancy - a 2ksf 50 year old tract home... but it's on pricy dirt (soCal, coastal.) We talked about what we'd change if we had another 500k in our investments.... we both said "Business Class!!!!" - but that was really the only thing we'd change.

Our all-in budget is $84k/year for a family of 4... so not that far off from the 75k sited.

Oh - and DH's 21 year old truck has 160k, my 11 year old highlander has 103k.

 

[socca]

Also, happiness is the sum of many more factors than just money.

A definition of human happiness: A human is happy if they are physically, emotionally, intellectually, and financially healthy.

According to this definition, financial good health is necessary for human happiness, but not sufficient.

This definition supports the old adage that 'money can't buy happiness'. It's easy to list scenarios where money can't buy physical good health, emotional good health, intellectual good health, or financial good health.

 

[eytonxav]

A definition of human happiness: A human is happy if they are physically, emotionally, intellectually, and financially healthy.

And those are listed in a good order of importance.

 

[jkern]

Money can buy happiness, but only to a certain extent. It depends on how much you have.

1) Poor. Can money buy happiness: Yes
2) Average middle class. Can money buy happiness: Probably, but not always
3) Upper middle class. Can money buy happiness: Probably not, but sometimes
4) Wealthy. Can money buy happiness: No

 

[Golden sunsets]

I feel that money does make us happy in that, we do not need to worry about our financial future. Being FI is very liberating and if we weren't FI we would be less happy, to a significant degree, given that we are essentially retired as of this year. Even though we have more than we need, I do not find that spending it makes us happy. I think just the opposite, not spending it makes us happier than spending it. We do have to be careful not to take this perverse truth to the extreme.

DS called last night to tell us that he has been wooed to go to work for Amazon at nearly double his current salary. He is a SE and makes a six figure salary at a start up with RSU's and sees a very good career trajectory over the next 3 years, so he said no thanks. I am proud of him for not jumping ship just for the money.

 

[Cassius King]

I personally believe that more money is more happiness. All of us are on this forum because we are all good stewards of money. Think of how much good and happiness would come from helping others with all the extra money you would have.
Yes, you may have enough to live comfortably, and most of you do, but think about the happiness you could provide yourself and others by donating, giving or through random acts of kindness.
Being able to take care of each other would bring immense happiness.

 

[FANOFJESUS]

Garages are a huge waste of money if all you're going to do is store your depreciating cars inside*.

In hindsight, I'm glad I ended up buying a house without one. Opportunity costs of the cash tied up in the initial garage purchase plus the extra costs to maintain, insure, plus the annual taxes more than offset any kind of slight increase in value of the cars garaged within. I say that as someone that just sold our two 16 year old Hondas for above KBB values even though they've been sitting in the sun exposed to the elements for 16 years.

* you could possibly persuade me that some really expensive cars and/or classics would hold value better if garaged, and it might offset the total ownership cost of a garage. But then we have to address whether buying those cars in the first place is "a huge waste of money".

But they start easier in a garage in the winter.

 

[FUEGO]

But they start easier in a garage in the winter.

As long as my battery isn't bad, I've never had a problem (even in 16 year old cars). Of course it rarely gets below 15-20 degrees here, so YMMV depending on where you live I guess.

 

[brett]

I think one of the biggest inhibitors to general happiness and to financial well being is the inability or the refusal to discern wants from needs.

It breeds a culture of consumer debt, a constant desire to keep up with others, and establishes an unrealistic link between happiness and material possessions. Some people are never really satisfied or happy with what they have.

 

[Music Lover]

In hindsight, I'm glad I ended up buying a house without one. Opportunity costs of the cash tied up in the initial garage purchase plus the extra costs to maintain, insure, plus the annual taxes more than offset any kind of slight increase in value of the cars garaged within. I say that as someone that just sold our two 16 year old Hondas for above KBB values even though they've been sitting in the sun exposed to the elements for 16 years.

It depends where you live. I live on the Canadian prairies and almost everyone with a house has garage. Only the foolish fill it with junk and park outside in the winter. All it takes is one winter of scraping the ice off the windows and cleaning snow off in -35 to either build a garage or clean the one you have. Around here, houses without a garage are harder to sell and will go for less.

To keep on topic...having enough money to own a house with a garage ensures happiness for me.

 

[NW-Bound]

Why do so many threads devolve into discussions about how many miles you have on your cars? Geez.

It's because the OP started this thread with how happy he was with his considered old car. So, other posters have to chime in to say theirs are even older, and that does not hamper their pursuit of happiness.

Having enjoyed a wide range of incomes over the years (from poverty level to top 1%), I can say from experience that more money has always made me happier...

Or rather, money should not make anything worse, unless one is an idiot and does not know how to manage it.

"I have never been in a situation where having money made it worse." - Clinton Jones

... While happiness might increase with more money, the stress of a high-paying job might affect happiness negatively by taking a toll on relationships, health, job satisfaction, etc... By retiring early, my wife and I have accepted a much lower income, which affects our happiness negatively, I have no doubt, but the lower stress level and greater freedom more than make up for it.

There is always some trade-off. If additional money comes with no hardship attached, who would say no? Or if one enjoyed the work that brings money, who would quit? I do not see any reason for Buffett to retire early, as long as his health holds out.

I enjoyed my work (it paid fairly well too) and would have continued if it weren't for megacorp's hassle. They could have upped the pay, and it would have been OK too. But they thought that I loved the work enough that they did not have to pay me more. They were wrong.

...And we still want more.

And that's a good thing, else we'd still be living in caves and crapping in the bushes.

Well, once we moved out from a cave and have a toilet and running water, why do we need to upgrade from a 1,500-sq.ft. to a 5,000-sq.ft. home?

There is some appeal to that in certain circles.

"I'd like to live as a poor man with lots of money." - Pablo Picasso

I am sure that Picasso still wanted good food and running water in the home. The point is that once basic needs are met, much else is really fluff.

... All it takes is one winter of scraping the ice off the windows and cleaning snow off in -35 to either build a garage or clean the one you have...

To keep on topic...having enough money to own a house with a garage ensures happiness for me.

Yes. But I maintain that it is still relative, because you see your neighbor driving his car out from his garage without having to scrape ice like you do. There are very few absolute things in life. We always measure our situation with that of surrounding people.

Great points ... On money ...

Now, What's the DDS synthesizer going to be used in ?

What will I have to do to you, once I tell you?

It is not important, other than that I have done a few PLL synthesizers, but not yet a low phase-noise DDS-PLL hybrid design. So, it's something I like to attempt now.

Not having to worry about money and having free time to pursue whatever interest one has on the spur of the moment is part of happiness.

 

[RobbieB]

Well, once we moved out from a cave and have a toilet and running water, why do we need to upgrade from a 1,500-sq.ft. to a 5,000-sq.ft. home?

Why to install a custom home theater room and a game room with pinball machines and a pool table and a wet bar with slot machines and a poker table of course.

 

[NW-Bound]

Not for me. TVs have not been turned on for so long, I forgot.

But I've got my son's vacated bedroom turned into a nice electronics work room, with an industrial lab bench installed, 2 o'scopes, 2 spectrum analyzers, 4 signal generators humming...

May be able to fit that in a smaller home, but 2,700-sq.ft. is enough.