The perfection of wisdom, and the end of true philosophy is to proportion our wants to our possessions, our ambitions to our capacities, we will then be a happy and a virtuous people. — Mark Twain
Have you ever assigned a dollar value to your happiness? A study from Princeton University’s Woodrow Wilson School concluded that $75,000 in annual salary is the tipping point for your happiness.
Albeit I respect research from an Ivy League school, the street smart approach is always to leave no stone unturned to find the truth. If $75,000 is not the magic number, what is the salary you need to make for your happiness?
Happiness lies between your two ears.
I have a friend who lives in New York City for the last 12 years. I’ve had many conversations with him in the past several months as he is embarking on his entrepreneurial journey; he is going to open a Little Cesar’s Pizza store in the heart of Manhattan.
Since I’ve reviewed his financials, I know that his family makes a modest salary of less than $75,000. He is an anecdotal example of how misleading these research studies are when it comes to your happiness.
In short 12 years, in this country, my friend has managed to buy a small condo in NYC, which has tripled in value. In addition, he has been sending money abroad to India to buy a brand new condo in his home town.
Amazingly, he has never paid a dime in interest to few credit cards that he is using regularly while saving capital for the new business and investing in real estate abroad.
Although money is essential to live a comfortable life, key factors that influence your happiness have no nexus to how much money you make.
1. Happiness is a skill
Happiness is a state of mind. If you start introspecting your life with the aim to maximize your happiness, you will soon become conscious about spending your life-energy and hard-earned money on only things that matter most for your happy existence.
Matthieu Ricard, a French academic-turned-Buddhist monk, took part in the trials to prove that meditation can significantly boost level of your happiness.
2. I am healthy, so I am happy
A healthy body and mind fosters positivity and happiness. The salary you make has limited influence on your decision to become healthy. Focus more on healthy mind, body and soul — even if you are making a modest salary — to maximize your happiness.
3. Live a purpose-driven life
Another fallacy of assigning a dollar amount to your happiness is to assume that you lack purpose in your life, if you are making less than $75,000. I am sure that you know several people who live a purpose-driven life while making a modest salary. Don’t forget that what you are making now has no influence on what you can make in the future.
4. Live in the moment
Happiness comes from simple pleasures of spending time with your family, or from any other hobbies you enjoy most.
Parting Thought:
No doubt that money worries can cause tremendous stress in your life, but that can happen no matter what salary you earn depending on how prudent you are with your money.
If you learn to live way below your means, simplify your life, and learn to live in the moment, then you can become abundantly happy even at the salary of much less than $75,000. On the contrary, those who live like Joneses can struggle to find an ounce of happiness even if they make six-figure income.
Readers: Do you believe that $75,000 is the salary you need for your happiness?
Elsewhere:
An Interview With Leo Babauta on Simplicity, Clarity, Happiness and Success @ Success Soul
Does Peak Happiness Comes at $75,000/year? @ Mr Money Mustache
What if You Find Out Your Co-Workers Are Making More Money Than You @ See Debt Run
What We Own And Why We Own It @ Jlcollinsnh
Compare the Best Credit Card Offers @ Modest Money
Guess What? You Might Be Richer Than You Think @ My Money Design
Photo by: Johnshlau
I agree with you–there’s little connection between happiness and income. I believe among the happiest times of my life were also the poorest. The less money you have, the simpler life becomes, and that alone, at least for me, helps boost my happiness. I tend to think that those who appear driven to accumulate more money–regardless of how much they already have–are the least happy people of all.
Kurt, I can’t agree with you more. Isn’t it amazing that we tend to be happier in our younger age when we live carefree without much material wealth?
I believe that money has its significance, but I don’t agree with Pundits who tout $75,000 or $50,000 as a magic figure for your happiness.
After I met my basic needs the rest of my money goes into savings or gets spent on random things that might make me slightly happier but not significantly happier. I could make do on less but shoot for more so I can have more to save to get to financial independence.
Well said my friend.
You are missing the point of the study. The study did not show that you need $75k to be happy. The study showed that on average, the level of daily happiness did not increase beyond the $75k mark. Certainly there are variations in peoples natural levels of happiness, in addition to their ability to create happiness from sources other than money and to efficiently use the money they have. However, having a good supply of money can reduce the stress of a lot of situations which can lead to unhappiness, which is what the study hints at
You have made a very valid point. And I completely agree with you that article was about level of happiness in relation to income.
I think that true happiness requires deep understanding of what life is all about, and focusing on less material oriented aspects that we cherish.
Thanks for visiting, Russell!
I never realy heard of this. No, I dont think so. I mean, if you’re making almost nothing I can see happiness being hard to find because you’re always hungry and can’t decide whether to let the power bill or heating bill go this month. But I think after that, happiness is between yoru ears. Just be content. Right here. Right now. With who you are. With what you have.
Agreed! You definitely need money to survive. But, it’s hard to fathom that you can assign a specific dollar amount to your happiness.
First off, thanks for the mention!
Second, I have thought about this question a lot. I’ve heard other versions where $60K or $80K was the magic number. But I ask – how can there be a magic number when everyone has different needs? My salary might seem incredible to some people and microscopic to others. I fully agree with you that happiness is all in your perception, not in what you make. I’ve seen my own income increase nearly 4x from where I started. Yet when I satisfy my financial needs, the only thing that makes me happy is the time I spend with those who mean the most to me. Great post!
That’s funny about the Little Ceasar’s Pizza franchise, as a neighbor approached us a few days ago about opening one in our town. He felt it was a good investment, but we have no time for such a thing right now. I believe you have to be able to eat, have shelter, and feel safe to be happy. Beyond that, the number is relative. Most people in our area don’t make close to 75K but I know many who are very happy. I also know some who make much, much more and always complain.
I can’t agree with you more, Kim! It’s all relative. Those who live to learn wisely by adjusting lifestyle based on their income won’t feel the financial worries as much as those who swim in the ocean of wealth but get drowned by over spending.
I really don’t want to believe this, because I’ve been hoping that making more/having more money would make me feel happier. I’m not depressed, and am actually a pretty positive, happy person, but the only thing that’s stressing me out currently is money! If I didn’t have that to worry about, I think I would be one of those annoyingly happy people. Maybe not though? Maybe money can’t buy you happiness. Tell you what…when I have it, I’ll come back and let you know how I’m feeling!
I’d like to know how you feel when you have plenty of money, Michelle! 🙂
I think for materialistic people you can put a dollar value on happiness, however there are others than can be perfectly happy and content on $50k/year or even $30k/year. It all depends on how you view things and where your values lie.
I seldom disagree with you, Jason. You are right on the money my friend.
perhaps money can’t buy happiness. but it can buy financial security. and for me, that goes a long way towards happiness.
I admire people who don’t seem to have the need for FI in building their happiness. But watching my father’s health and business fail, plunging us into poverty, scarred me too much to be one of them.
Yes my friend. Money can definitely buy financial security. It’s hard to disagree with your wisdom. My only issue is with so many experts somehow telling us that either $75,000 or $50,0000 is good enough to maximize your happiness. This very notion of associating a dollar figure to happiness is hard to believe because everyone’s situation is unique.
I think there’s a definite happiness/money relationship to the point where basic needs of shelter, food, etc are met. After that the returns are rapidly diminishing.
A book I recently read that I found really interesting was Positive Intelligence by Shirzad Chamine. It talks a lot about how happiness is really just a decision you can make regardless of outside circumstances. It gave me a lot to think about and I’m still doing some of the exercises in it weeks later.
Well said, Garrett. That’s my point. I think it’s not so much about how much money you make or how much you have; it’s more about how prudent are you with your money. Happiness is relative. A wise man can live happily even on a modest income, and a fool can find himself in peril even if he makes a lot of money.
I agree with Tony Robbins, who said that money can’t buy happiness, but a limo sure helps you drive up to your troubles in style!
Can’t agree with you more, Joe! Tony Robbins is one of the best in the personal growth arena.
You values really are the big thing here. For us we try to focus on the experiences and the people in our lives. We really try to find meaning in our lives and use that to make us happy. We also try to be happy with the simple things. We know money can’t buy us happiness but we like having enough to not have to worry about our needs. Being happy really is a state of being and has nothing to do with what you have. If you tell yourself you are happy you will be.
So true, Miss T! Our chief goal in life ought to be finding happiness from the life that’s congruent with our values.
I just watched a movie on this. It’s so funny because it said everything you’re saying. It’s amazing how the happiest people they found in the world seemed to be the furthest removed from our materialistic culture.
Thank you. What’s the name of the movie?
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I think I could be happy with a salary of less than $75,000, heck I made less than that for all of my life. 😉 However, now that I’m in a more entrepreneurial path, I could easily make use of a $1 million or even a $1 billion salary. I wouldn’t need it to make me happy per se, but it would not go to waste, either. I could use it to expand the company, hire people, and so on.
I agree with you that it can be a skill. If you pursue the wrong ends, it will be harder to find happiness regardless of your means. Meditation can be a great way to calm the brain down and find some inner peace.
Another great post. 🙂
Thank you, Kevin! I am so happy to see you achieving your entrepreneurial dream, my friend. I know that you are going to succeed beyond your wildest imagination.
I agree with all of your points. Happiness really is a state of mind and we can change so much with simply finding the positives in every situation.
I also greatly appreciate health because I recently was very sick and all I could think about was how I just wanted to feel better again. We should never take our health for granted!
In this day and age if you live in a metro/city area you ‘need’ money to be happy. It’s about securing your basic needs. Ideally you want a healthy combination of all needs met and a few wants (not all, have some discipline!). Be realistic when dealing with money you may live amazingly well on 50k in the country, but if you go to the city 50k will be chump change.
You can put a dollar amount on the beginning of happiness, what happens after that is you put time/value and make things happen. It doesn’t have to be this way, but in corporate america it is the only way.
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There’s an interesting book by Robert and Edward Skidelsky that bears on this topic. It’s called:
“How Much Is Enough?”
I will certainly read the book. Thanks for visiting. It’s an honor to see you here, Mary!
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