How much money do people need to be happy? (opens in new tab)

Definitely depends heavily on region and your family situation. Using just actual dollar values makes this discussion difficult. A $150k lifestyle in the Bay Area with a spouse and 2 kids is vastly vastly different standard of living than $150k as a single dude in an apartment in a suburb of Atlanta. In the Bay Area for example, you’re not doing ANY of those things you listed making just $150k.

The normal explanation is that the happiness derived per dollar decreases with every dollar.

The idea being that a couple making $200k jointly per year spending $800/mo on a maid gives them far, far less happiness than a homeless person getting their first warm meal and shower this month.

I second the housekeeper. I spent $40K on mine last year, and it was the best thing I have ever spent money on. I've done dishes once in the past year, and I generally come home to a made bed. Imagine getting all of that, but then know that you are providing a near livable wage with flexible schedule. She can be a good mom and make money.

Or just don't spend it. You don't have to spend more just because you make more. If you save (invest) the money, you can retire earlier.

> I live in the Netherlands where 40K is quite a reasonable income. I really dont get why you would need 100k to do the things you need. Perhaps people need to become a bit more frugal?

What I have found is that the majority of "happiness from money" comes from the financial security, not actually spending the money. The reduction in stress going from a chronically broke PhD student to having 5 years of living expenses in savings is huge.

It's the knowledge that you can immediately solve almost every problem that pops up with a bit of money, and figure out the details later. Missed your flight? Book another one. Car trouble? Call assistance and take an uber. Lost your job? Take a short vacation and then hit up your network on LinkedIn.

And in most countries in Europe, you can feel secure with a lot less in income/savings than in the US. You don't need to worry about what your health insurance does not cover, probably don't have any student loan debt - and probably don't need to worry about a college fund for kids, can commute by public transport in cities, have better unemployment protections, and so on.

It's probably important to note the Netherlands has a high degree of decommodification (i.e. a lot of state provisions), with the US having some of the lowest in the developed world.

The result of that is that distributive justice is a lot stronger, and the impact of a regressive tax system is magnified. A median salary in the US might generate unsatisfactory, whereas in the Netherlands even a below-median salary has quite good outcomes because of this.

For example, the median healthcare insurance expenditure in the Netherlands is about $1.5k a year, and healthcare outcomes are quite good. Tuition fees in university for undergrad and graduate degrees are about $2.5k a year across the board, with a tiny fraction of students being the exception like dental or piloting schools. Student loans are currently at 0% and set to go to 1% next year. Tuition-waving subsidies exist for children of poor parents. Childcare is heavily subsidised. Traffic policy and public infrastructure is such that a car is not necessary, and employers tend to reimburse all public transportation costs for most employees. Lastly, it just feels like culturally the Netherlands is slightly more sensible with its consumerism and interest in toys. Most seems to be spent on things with higher lifetime values, meaning the effective value of money seems to do a bit better, but that's just intuition from anecdotes.

In short, when you get your after-tax income, you tend to be able to spend a very large portion of it on things you don't really need, but just enjoy. Nice food, vacations, hobbies. There just isn't an need for a $100k salary for your kids to go to a nice school, have childcare or a good insurance, or a car to get your family places. Nor do you need $100k to cover interest payments + principal on 6% student debt of $100k.

That having been said, your numbers on Asian/Australian vacations definitely cater to a certain tourist. I've done a month in Asia on 1k, but I was 19. Similarly I could do 3k in Australia, but I'd be a certain kind of vacation. You AirBnb and eat some simple Asian takeaway like food and travel by bus. That's not everyones idea of a holiday. It's a different vacation from getting taxis to hotels and eating in restaurants.

It's cultural, I think. In the US, we are very consumer driven. We are bombarded with propaganda constantly telling us that the one thing missing from our lives is whatever that person is selling. Some of those people are selling credit. That wouldn't be so bad, except that Americans are also highly competitive. We hate losing, and someone else having more stuff than us is losing. Our entire measure of the value of a human being is their wealth.

Consequently, many Americans spend nearly everything they make on stuff that ultimately contributes very little, if anything, to their contentment. Since buying those things didn't actually make them happy, they figure they need more money, and more debt, to buy more things. It's a trap we've created for ourselves.

Oh, and our health care system is ridiculously expensive.

I guess that is the whole point? I.e., you stop needing to be frugal and/or don’t have to count € when spending money on basic things like food or transportation. Also, more things become ‘basic’.

Another point that makes a difference is that if you ever want to get a mortgage and buy a house, the maximum the banks will give you is a constant multiplier times your annual salary. In Ireland it’s 3.5x — good luck trying to buy a house on a €140k budget in Dublin.

In my case, my total effective comp increased about 8x in the last 5 years after being corrected for taxes and CPIs of the countries I lived in, and I kind of concur with the OP in that it’s more of a log curve than linear. Things get progressively ‘easier’ but less lifestyle-changing over time.

So, I think a difficult aspect of frugality is that is borders close with cheapness. Cheapness is a problem, and imagine if all your customers became cheaper and you lost a few. Well, you would have to become more frugal which means firing providers of services. It becomes a negative trend.

I live near Seattle where $100K is probably a reasonable income (give or take $30K).

Now, I make more than that by a large margin where my cash target side of the house is roughly $300K not including stocks. I live pretty well, so what do I do with the extra money?

Well, I trickle down. I have four employees for my house and land. When you not only provide for yourself, but you provide for others then I claim that there is extra happiness to be had. My house keeper, for instance, makes $40K with an average of 20 hours of week, flexible timing, and a monthly stipend for benefits.

You can buy happiness, but only if you spend it on people rather than things.

I also live in the Netherlands and feel the same. I make less than 2k a month and already don't know what to do with my money. That being said, it probably helps if you have a reasonable healthcare system. If you get ill in the US, you're basically screwed.

Just a house for your family will eat up all of that 40k here in Toronto (that’s basically interest-only on the average $1m house in the suburbs). You’d have nothing left.

Although we still live very well in absolute terms, a lot of people I know have and will have a worse quality of life than their parents did, despite being more successful and earning more money! It’s kind of depressing.

A month in Australia for 3-4k? I want a cost breakdown for this. Say you get a deal and airfare is $500, that leaves about $100/day for the month. You could probably find a hotel at that rate, but then you're left with nothing to spend on food and activities. What am I missing? Friends and relatives who'll let you stay with them?

I don't know how health care works anywhere else, but health expenses can range from $250 for a standard checkup, which I just got (note: it's supposed to be covered for free, but apparently insurance companies are now rejecting claims willy nilly in order to save money) to $10,000 for delivering a baby, to astronomical numbers for anything else.

It really leads to a persistent feeling of danger, so yes, making 100k instead of 40k could literally save your life, or at least keep you from being an indebted loan shark victim for the rest of your life.

>I really dont get why you would need 100k to do the things you need. Perhaps people need to become a bit more frugal?

No one said you need it. They're saying at that income a lot of pain points go away. As others pointed out, much of it has to do with a reduction of stress. A lot of small problems can be solved with money. It doesn't mean that people will solve them with money - but knowing that you can eases the brain quite a bit.

And then of course, there's health care. With good employer paid insurance, the deductible for a couple is about $3300. So if you have any kind of chronic medical condition, you'll pay that much each year at least. If your employer did not pay and you had to purchase it (e.g. you are self-employed), it'll cost perhaps $500/mo for the premium, with a deductible anywhere from $6000 to $10K.

>Perhaps people need to become a bit more frugal?

There is that as well. People here tend to change their smartphone every 2 years, and always buy a brand new expensive one. They'll pay a pretty high fee for cable TV. They'll insist on 50-100 Mb/s Internet, when, in my experience, 15Mb/s was fine for a couple (no degradation in quality for services like Netflix). They'll generally pay $15-30K for new or recently new cars. And many people change cars too often.

student loan debt. there are many that graduate with $20k-$100k+ of debt. I'm frugal/cheap, got by with 30k salary in big city a year out of school was tough. Many coworkers that were more normal in spending habits were breaking even or using savings to make ends meet.

At 30k salary, I was able to save $400-$500/month in Boston. It would have been near zero if I had student debt (6%+ interest). Frightening thinking back, but I was always one major repair on my car or mid level health issue away from spending an entire years worth of savings.

> but I really don't think 100k is the magical number that you need to become happy.

-> Most thorough study yet about the subject comes out, says 100k is the magical number.

You: Well I'll keep believing my thoughtless, data less opinion anyway.

Me: Rolls Eyes

Sure, you can be skeptic, but at this point, if you needed to take a decision based on this, you'd do better go with the 100k magic number, the odds are definitly more in its favor then your belief.

>Just one thing: you don't need a "buy/rent a jet" income to not have to commute to work daily

$3mil let's you live on $50k/year for 60 years. And realistically, more than that due to interest - 2% of 3mil is 60k, so if you have it well-invested you could live off it with $50k/yr indefinitely.

if you have $10mil, you're not burning much more than ~$400k a year if you're smart. a charter flight across the continental US costs at least $6k. so you could definitely do that from time to time, but if you do it even once a month you are blowing almost a fifth of your yearly budget on transportation. you are probably gonna feel that.

edit: the figure I used is just the cheapest possible aircraft you can rent. if you actually want a jet, you are looking at $10,500 and up, which would make your monthly flight eat more like 32% of your budget. most people are going to find this untenable.

> Tithing is something that is largely forgotten in the post-Christian world we now find ourselves in. Peace.

That's simply not true. The 2016 World Giving Index[1] shows that their three measures of charity have all increased over time, including financial donations (page 16). Many of the top ten countries for percentage who donate money have had decreased religiosity (page 21).

1: https://www.cafonline.org/docs/default-source/about-us-publi...

In general I would agree. I'm not catholic, but in that tradition they have the principle of subsidiarity:

> Subsidiarity is an organizing principle that matters ought to be handled by the smallest, lowest or least centralized competent authority.

Taking care of your family is definitely a priority. I would also encourage supporting local charities and getting involved with the work too (ie volunteer days).

You're right that its not just about the money, it just happens to be a resource that a lot of us have available, and merely giving can be a good place to start.

Part of giving to charity in addition to taxes is that I don't think the government (USA) is really handling my money properly when it comes to social programs. Private giving in the USA allows us to choose how our money is spent more specifically and usually lets you make a bigger impact in an area you care about. You should look up private giving in the USA, it's an astounding figure that is given every year voluntarily, there are tax deductions if you itemize, but at the end of the day I would save more money taking the standard deduction and not giving, so it's still a sacrifice monetarily for a lot of people here.

What a sad indictment of modern American life that our baseline for happiness is "not destitute". Really, I think that's telling, and as a millennial with lots of student loan debt and friends in a similar boat, it's not surprising one bit.

I feel like there’s some Maslow’s heirarchy things going on here. Once you get over the non destitute thing you can spend your energy on being fulfilled.

>Many people I have talked with about happiness are really talking about non-anxiety.

This sums up pretty much.

It is not the Money ($) i need. But what I think is rather basic things to live.

A place called Home. It doesn't have to be free, it could be even be rented that I dont own it. But it should be affordable, without being anxious about Landlord kicking you out, or hike the rent to a ridiculous level so you cant continue to live. It shouldn't take your entire working life, 25 - 30 years of continuously working and giving 40% of your salary, what if you are sick in between this 30 years? What if you were fired? This whole living burden is what causes people anxious, and hence do not risk into taking another higher paid job and move up the ladder. The stagnation of wages.

I dont need a house, just a small flat, 150 Square Feet will do, with an open kitchen and a small toilet and shower. The whole flat is probably the size of many Americans's houses bath room. Hopefully along with Water pipes that doesn't include heavy metal like lead poisoning, hot water system that could shower longer then 3 min in Winter. Is that too much to ask for? I am not calling for free housing, but one that is affordable.

Food is Cheap, I used to live in UK with less then 1.5 pound budget per day. Good Quality clothes are actually not expensive in terms of production cost, most are rent, labour and marketing. And Medical is affordable if you have insurance.

So Food, Medical and Clothes are actually easily affordable in most developed countries. ( Name be one place that it isn't ) As long as you have a job. Any job in fact, even labour intensive job or lower end jobs could easily afford all of these.

So out of all the basic needs in Maslow thoery, shelter is the most expensive, most unaffordable, and also most anti competitive. But all government are very happy with that, as it is basically modern slavery.

That's a level you can contribute to by being frugal. It's tough to get to but easier than you'd think. The barriers to moving to this level tend to be as much social and psychological as financial e.g. families, mortgages, need for security.

The next level above financial independence is financial freedom (you can just get whatever you want, from shoes to houses) - off the top of my head I would guess this is probably around the 0.01%, which would be about 32k people in the USA. As an example of freedom, these people can buy nationality and avoid immigration limitations (going rate is ~$1-5m).

The article is way off just comparing salaries. There are 3 social classes in terms of having a meaningful lifestyle distinction - those who have to work for someone else, those who don't, and those who have full freedom to decide where they go and what they do each day. All they did was compare a bunch of people in the same social class (somewhat shockingly the Romans considered this equivalent to a slave class).

There might be a fine line there; humans need a sense of purpose, and for many people, purpose is tied up in our job.

If you no longer have to work, and you choose not to work because your current job isn't ideal, it can be hard to get the motivation to search for a new job. At the same time, without work, it can be hard to find purpose.

So you might be stuck in a situation where you aren't working and struggling to find meaning.

It's also worth noting that it's normalized to household size -- income divided by sqrt(household size). So for a married couple with two children -- a number close to my own heart -- the 105k satiation point would be real dollars of 210k/year.

Dollars are also represented as International Dollars, which are adjusted for the local purchasing power, expressed in units equivalent to one USD in the US.

Congratulations! That is one of life's greatest milestones -- and yet we don't have a common term for it.

I'm my parents' last child and am soon to graduate Grad school and enter 'the working world'. I can definitely feel their relief in knowing decades of parental sacrifices and obligations have paid off and finally come to an end.

Savour that pride and relief -- you've earned it.

What do you hate and why can't you automate it?

On the other hand, you might have a stressful job to actually generate that $200k, and you might have to live somewhere like SF with very high cost of living, and your commute might be stressful, etc.

So did I, but Eastern Europe is a wide term. Living conditions in Yugoslavia were actually quite nice until the 80s. But I'm not saying it was a good system (it wasn't, I'm not fond of communism at all), just that majority of people were content with it for a long time. It's a statistical fact, and not just in Yugoslavia, but you can hear from many people even in Russia or Romania that they used to feel happier and safer than they do now, while their conditions in absolute terms were really bad even from my Yugoslavian perspective. People value safety the most, and than next it seems that they value their social position in the group. If they get the both, they can feel accomplished and that's the primary factor for us to feel good about our lives.

"Nobody"? Pot, meet kettle.

Not a Christian, but I spend a lot of time at church (long story). Anyway, self-sacrifice is one of the central tenets of Christianity, the idea being that Jesus Christ took on human form to suffer and die on the cross to save humanity from its grievous sins. As a result, self-sacrifice and martyrdom come up all the time in the Bible [1].

I'm not particularly good at actual theology, and I'm sure different sects of Christianity have different interpretations, but as I understand it, because of Christ's sacrifice, personal suffering is seen as something noble, or even venerable. I think it's easy to take this too far (e.g. people not accepting help because it's "noble" to suffer, or that they "deserve it"), but I digress.

[1] https://bible.knowing-jesus.com/topics/Self-Sacrifice

From my personal experience, you are going to have misery no matter what in life. But it's amazing how often times some misery is bimodal, either you choose your misery, or it's forced on you.

As an example, you work and get paid (a form of misery because you don't have control over your own time), or you don't work and have all the time you want in the day (the misery is you are hungry cold and wet).

I found that self sacrifice in relationships almost always pays off, and is very biblically based concept. For example, being patient with a spouse you are angry with actually hurts emotionally (chosen misery), but you resolve things this way. The opposite would be to blame or fight back, and extend or lose control of the misery (ie, forced on you).

I've learned to chose my misery. Save now (misery chosen), spend now (misery forced later), etc... Maybe suffering would work equally well with misery.

Bread is a synonym for dough in that meaning

Or as Kanye West put it, "having money's not everything, not having it is".

> That being said, my personal opinion is that money does not make people happy, but it definitely prevents a lot of causes of unhappiness.

I generally have found this to be a tautology. Being less unhappy means being more happy. In fact, I've found that being content with things has improved my happiness significantly.

It's not just about maximizing every positive experience, but minifying the negatives as well.

That's the article where I first encountered that idea indeed.

The base of the logarithm does matter, but assuming base 10, a billionaire with an income of say $100M dollars would be 4 times happier than someone with $10k per year income which is pretty close to the floor in the US.

You felt rich at 105k?

We're talking about human happiness, the capacity for love, freedom, and self actualization. Happiness.

We're not talking about buying overpriced liabilities such as fancy cars, furniture and clothes.

I make over 150k and it's awful working 160 hours a month.

Think about why this study is messed up:

Wage earners spend the Best part of day typically indoors, taking orders from another person.

Wage earners send their children to be taken care of by strangers.

Wage earners send their kids to the zombie factory (public schools)

The fact is that someone with a few million can:

- take care of their own children/babies - educate their own children - take care of their aging parents - take care of sick relatives - can explore the world

Don't tell me that having 2M in the bank will not make you, your family, and neighborhood FAR "happier" than someone making 300k in wage slavery.

I can tell you for a FACT that making that much money (millions) will objectively lead to higher quality of life for people and their families.

I'm personally working hard now to accumulate several investment properties and live free for life so that I can retire before 40 so that:

- I can raise my kids - help parents, family, friends - explore world and learn - focus all my free time on healthy living - get best medical treatments

You damn right it will make me happier to be able to do yoga 3 times a day, raising my kids and also building cool shit without Having to answer to a boss.

You know it's true that lots of money makes you immeasurably more fulfilled. Don't listen to socialist lies that you only need some bullshit 105k (<75k after tax)

Owned his own small plumbing business. Built a reputation of doing excellent, reliable, honest work and was certified to do unusual things, like medical gas in hospitals.

Exactly, incomplete results being similar to Odds Ratios in medicine not based on endpoint mortality, morbidity and ratings.

Not to mention subject to massive binning effect. You might have binned single people with married couples with kids, both of which have different requirements.

On the other hand it would be rather sad to start selecting your friends based on their wealth.

First and most importantly, because I want to be sure people aren't dating/befriending me because of what I have. This is unfortunately something I've already experienced a couple times.

Second, because my experiences with many other people in my wealth/income bracket have driven me to try to avoid being anything like them or having other people view me the way I view some of them.