
Happiness is earning $60,000/year - justinchen
http://www.mymoneyblog.com/archives/2010/05/happiness-is-earning-60000-a-year.html
======
grellas
Americans are materially wealthy relative to most of the rest of the world. I
would suspect (without having any sort of citation to support it) that, when
compared to Americans, most of the people who have ever lived in any time and
in any country have known nowhere near the standard of living represented by a
$60K annual income in the U.S. today. If that assumption is true, and if the
premise of this piece is also correct, this would mean that most of the people
who have ever lived throughout all of humanity's existence have been unhappy
with their lives. That would seem to me a dubious proposition.

I think that neither money nor happiness is the key but rather contentment.
Life dishes up the good and bad to us all, and we often can't do anything
about that, but learning to be content with what we have is an achievable and
worthwhile goal for all - and also a better measure than money can ever be of
whether we have lived our lives well.

~~~
kqr2
I think the key to the $60K happiness threshold is that it represents being in
the top 20% income bracket.

Standard of living may be lower elsewhere, however, an individual's relative
wealth (especially with respect to peers) is probably what's really relevant:

[http://www.telegraph.co.uk/science/science-
news/3315638/Rela...](http://www.telegraph.co.uk/science/science-
news/3315638/Relative-wealth-makes-you-happier.html)

~~~
greendestiny
In fact it might represent both an absolute and a relative component, all it
really says is that in the USA today that combined figure seems to be $60k.

~~~
stcredzero
I suspect that our system is (unintentionally) rigged so that only the top 20%
are set-up for happiness. I suspect that most social systems are set up in
such a way, such that the majority have to strive for something.

------
synnik
That sounds about right. From about 1999-2004, I didn't negotiate salaries. I
told potential employers that I wanted exactly 60K. The question was how many
hours a week I would have to work to earn it. The winner was 22 hours.

I only changed this tactic when I had kids. Because that changes everything.

~~~
tsally
Can you elaborate on this? I'm really interested in the type of work that you
did and your negotiating process. Was it software development? What type of
companies did you work with?

~~~
synnik
Yes, it is software development. It actually started when I was working at
IBM. I asked if I could go part-time, and they said yes, offering 57K for 30
hours a week.

I was also talking to some startups, and told them about the offer I had,
asking them to beat it by offering 60K for less hours. One of them agreed, and
I worked for them for 2 years.

I followed that model for a few more years, working mostly with service-based
companies who were willing to bill me out for part-time work.

------
SamAtt
I've never agreed with this theory. He seems to frame things in terms of
irresponsible living and under that criteria I agree. If the difference
between 60k and 90k is just "a little more “entertainment” and maybe some
bigger stuff" to you than his theory works out.

But to the person who invests that extra 30k a year and gets to retire at 50
instead of 70 I think the happiness difference is pretty significant. I'd bet
the 55 year old who gets to spend his days as he wishes is much happier than
the 55 year old still working his 9 to 5 job.

~~~
dagw
_I'd bet the 55 year old who gets to spend his days as he wishes is much
happier than the 55 year old still working his 9 to 5 job._

My dad for example has been pushing his retirement forward for several years
now because, even though he's looking forward to the free time and has the
money to comfortably retire, he loves what he does 9-5 and can't stop thinking
about all the awesome projects he'll miss out on if he leaves.

Then there is the dark side of the equation where people retire after a
lifetime of work, come home, realize that they have nothing to spend their
days on and their life has no purpose any more, and promptly die.

~~~
potatolicious
> _"ome home, realize that they have nothing to spend their days on and their
> life has no purpose any more, and promptly die."_

I honestly wouldn't mind that. In my ideal world I'd work till I drop - such
would be how much I enjoy what I do. As I get older I imagine I would want to
scale back _how much_ of work I'd do as other things take over (children,
grandchildren, etc), but I doubt I'd ever give this up altogether.

------
jack7890
Even if you believe Kahneman (I happen to), the $60k number is probably
illusory for most Americans, since location is important. In NYC, perhaps the
number is $95k; in rural Arkansas, perhaps it's $25k.

I'd love to see data on how the specific "ideal" income level varies by
location.

~~~
nandemo
For what is worth, the average yearly income for salarymen in Tokyo is about 6
million yen (~=U$65k).

<http://nensyu-labo.com/ken_tokyo.htm> (In Japanese)

I think NYC's cost of living is not that much higher than Tokyo's. However, as
many pointed out in this thread, people care a lot about their income relative
to their neighbors. So it's plausible that New Yorkers would require a much
higher income to be content, compared to Tokyoites.

------
chr15
If you make too little money, all you think about is money. If you make too
much money, all you think about it money.

I'd have to agree with this article. Personally, I think much of happiness
comes from finding the middle ground where you don't don't have to think about
money.

~~~
hugh3
I forget who it was who said that money is like sex: you only think about it
when you're not getting enough of it, and if you are you find something more
interesting to think about. I also forget whether this was supposed to be a
commentary on money or a commentary on sex.

In any case, if you're getting enough of both you're probably pretty happy.

~~~
Aetius
Felix Dennis

<http://www.timesonline.co.uk/tol/news/article1084093.ece>

~~~
GFischer
Heh... some pearls of wisdom from that article "If it flies, floats or
fornicates, always rent it - it’s cheaper in the long run."

And, far more relevant to this discussion: "Becoming rich does not guarantee
happiness. In fact, it is almost certain to impose the opposite condition - if
not from the stresses and strains of protecting it, then from the guilt that
inevitably accompanies its arrival. "

------
tsally
This article missed half the point and doesn't quite capture what was said in
the TED talk. Earning above $60,000 a year doesn't affect the happiness of the
_experiencing self_. But as Kahneman goes on to say, it certainly affects the
happiness of the _remembering self_. So a lot of money wont affect how happy
you are at a particular moment, but it does affect how happy you are with your
life as a whole.

------
rg
H L Mencken once defined a wealthy man as one who earns $100 a year more than
his wife's sister's husband.

~~~
frankus
Robert Frank has a book (Falling Behind: How Rising Inequality Harms the
Middle Class) that makes a convincing case that that effect does in fact
exist. He goes on to argue for a progressive consumption tax, which is fairly
convincing depending on your politics.

~~~
ellyagg
"[D]epending on your politics", indeed. It's not self-evident that everyone
should be equally happy. It's not even self-evident that happiness should be
the overriding concern of our existence. I've sacrificed my happiness many
times in the name of other principles, especially truth. And, it wasn't
"sacrifice temporarily for greater happiness later" or any other such
rationalization.

~~~
frankus
I agree, but that everyone should be equally happy is not what the book argues
at all.

Frank's argument boils down to the fact that a lot of categories of
consumption are zero-sum games, and that if played with lower stakes people
could afford more important things with the money they save.

For instance, if every SUV owner has to have 20-inch wheels to appear wealthy,
SUV owners aren't as a whole are worse off than if 18-inch wheels were
considered a sign of wealth and they all had health insurance.

So the argument is that there are a lot of consumption arms races in the
economy where some sort of coordinated de-escalation would benefit all of the
players.

The coordination he proposes is a progressive consumption tax imposed by the
government, which I would agree is probably superior to the current
progressive income tax.

------
Kilimanjaro
Nop, happiness is about having $10M in assets and earning $1M a year in
royalties.

Believe me.

Until then, keep coding...

~~~
ruslan
If I had that wealth I would still keep coding... just for fun and for the
sake of coding! Probably I would focus on something extraordinary, like
robotics or AI.

~~~
juliend2
Then why don't you focus on robotics or AI right now? Life is too short for
NOT focusing on something you find extraordinary.

~~~
cglee
Because you can afford to suck in something you find extraordinary when you're
rich, whereas you can't if you need to get paid.

------
WingForward
Total misrepresentation.

Kahneman says that at $60K a year your direct experience of happiness
flatlines. But our _perception_ of how happy we are increases with the amount
of money we make, far beyond the $60K.

There's two types of happiness, how happy we are and how happy we _think_ we
are and the two correlate only at a .5.

The flatlining question is "How happy are you right now?" The question that
increases with wealth is "How happy are you?"

Which is a fairer representation of how people understand happiness?

------
mikeyur
I recently spent a few hours figuring out how much I need to be happy. Happy
to me is living comfortable with enough extra cash to go out or take periodic
trips without going into debt.

I'm currently living at home and paying off some debt (I'm only 19 so it's
still socially acceptable to be living with mom and dad :P).

I wrote out the cost of necessities (rent, phone/internet, food,
transportation, healthcare/insurance) and then all of the extras. I want to
live comfortable so for rent I said $1500 (about what a 1bdrm condo in
Vancouver goes for), food $800 (includes going out to eat and regular trips to
starbucks), Phone/Internet $150, Transit pass $100, healthcare $100.

The costs are mostly rounded up, if I can save cash without sacrificing
happiness I'll cut costs down. On top of the basics I want to save $500
(minimum) each month and have $2k or so in the "misc" category. This includes
clothes, household expenses and extras.

I calculated the amount and it was around $5500/mo. I then recalculated and
factored taxes in, I believe it was around $6800/month pre-taxes.

In the past month I've been looking at ways to get this income. I could look
into a 9-5 job, but that wouldn't make me very happy. I decided to get a
couple clients on retainer with $7k/mo. as my goal. I've already locked down a
large client who will cover most of my income for about 40hrs/month of work on
my end. I'm quite confident I'll find another client to get me to the goal
amount.

I'll be able to live well for approximately 3hrs per day, 5 days a week of
work. I'm talking to a startup right now about joining on as a cofounder, and
if I do I'm glad I'll be able to work on my own company without having to
survive on ramen or live in a crack den.

~~~
jimbokun
"On top of the basics I want to save $500 (minimum) each month and have $2k or
so in the "misc" category."

I would recommend swapping the save and misc amounts.

------
derefr
Another interpretation is that it currently requires $60,000/year for a US
citizen to not be lacking the means to fulfill one or another step on Maslow's
hierarchy: <http://en.wikipedia.org/wiki/Maslows_hierarchy_of_needs>

Given that the [2008] US GDP is $14.4 trillion/year, and there are ~300
million US citizens, it turns out we're each, on average, creating
$48,000/year in value.

So, on average, each citizen is $12,000 of unhappy.

~~~
Perceval
Because income is heavily skewed by outliers (e.g. Bill Gates), it makes more
sense to look at the median income alongside the average income. Median
_household_ income with 1.35 earners and 2.57 household members is $44,389.
That's less than the per capita average of $48,000, and it's spread over 2.5
people.

Turns out that about 70% of the households in the United States are going to
be below $60,000. Divided by the number of people in the household (hits about
three once you get to high enough income levels), you don't get $60,000 per
person until household income rises to $180,000. At that point, about 90% of
U.S. households fall below that income level.

[http://en.wikipedia.org/wiki/Household_income_in_the_United_...](http://en.wikipedia.org/wiki/Household_income_in_the_United_States)

~~~
rokhayakebe
Then again at $60k for one person it may include the ability to afford a
decent home + car etc...hence by the time the second or third person rolls in
the extra cost to achieve that happiness is not $60k per person. It could be
even lower than $30k.

~~~
flipbrad
or it makes no difference. The happiness trade-off from having the little
feller around, knowing you sacrificed your next car upgrade, might make it
totally worth it; but if you weren't at 60k, the sacrifices would be too
large.

it's possible then that 60k is just the number you need to be earning,
whatever your costs base (drugs, gambling and other habits; and
disabilities/chronic illnesses aside)

------
steveplace
Happiness as a function of wealth represents a sigmoid function. This function
is different for people (you could go around and define the coefficients in
some stupid analogy).

The second derivative is the most important. Where that hits its peak is where
you can define "financial freedom," and where it hits its trough is where you
can define "fuck you money."

------
blizkreeg
Whether it is in the making of $60K or $1M per year, happiness is in the
pursuit of the making, of the living.

An analogy I like is if you ask a 'tourist' about his memories of a place,
you're likely to get a very different answer than if you ask a 'traveler'. In
fact, in the former case, you might even get a rather drab answer. The latter
will inspire you.

~~~
hugh3
In my experience, "travelers" are just tourists who have a complex about it.

------
brc
To me, happiness comes from knowing your financial future is becoming more
secure, not less secure. The ultimate happiness will come from knowing that
you can get that 60k per year for the rest of your days, without necessarily
having to work. Trading your precious time for 60k from someone else would
definitely not keep me happy.

------
xbryanx
Hey tech brainiacs. Read this, and then come work at one of the many non-
profit organizations starving for your intelligence, but unable to attract you
because of ridiculous salary imbalances. We'd love to have you...and 60k is
about all we'll ever be able to afford...and you'll be happy.

~~~
justinchen
I think a recruiting campaign centered on that point might actually be
effective. I'd like to see some non-profits use it.

------
sosuke
So if I'm single $60k is fine, throw in some dependents and that changes very
fast. I think I'd be happier at $180k a year and $60k more for each new
dependent that comes along. That takes care of health, house, education and
plenty extra to stash away.

~~~
rokhayakebe
It's not linear. One person = $60k. Two = definitely less than $120k.

------
neilc
If I made, say, $1 million/year, I think I'd be happier -- for the simple
reason that I could afford to only work one day per week (or a few months per
year, or work for 5 years and then semi-retire, etc.). That would mean a lot
more freedom to choose how to spend my time, to travel, and so on. (Of course,
I'd probably end up doing something similar to "work" during a lot of my spare
time, but there's an amazing difference between extrinsic and intrinsic
rewards for an activity.)

I've often thought that applying this on a smaller scale would be interesting
-- for example, trading $140k/year for $110k/year plus an extra six weeks of
paid vacation time.

~~~
ghshephard
Or, Trading $140k/year for $110K/year and _taking_ two weeks of vacation. I'm
astonished at how few people in Silicon Valley companies take more than a week
off per year. I think it's unhealthy, and, ironically, likely reduces their
effectiveness overall.

But, as one who took a day off, and came back to 192 email, at least 10-15 of
which really needed me to pay attention - I don't understand how to leave the
work place gracefully. It's almost like I have to hire my replacement, and
transition all my responsibilities to them prior to taking any time off.

I couldn't agree more with the author of the story - once the basics like
shelter, housing, food, water and Medical Care are taken care of, spending
quality time with friends and family really is the key to happiness.

~~~
lambdajack
Until you consider the safety net you need if things go to hell in a
handbasket. Is that $60K living at or below your means? Does it consider
enough to sock away so you don't have to eat cat food in retirement or cover
your _real_ expenses if your job is pulled out from under you?

------
Heston
This title comes off as cliché...No, money can't buy you happiness but it does
_allow_ one to be happy. For when you consider the other end of the spectrum,
poverty won't make you happy either; but then, everyone knew that.

------
ErrantX
I suspect this is a case of using a metric (money) to explain a complex fact
(what makes us happy).

Yes, $60,000/yr may make you happy. But I suspect that is about being
comfortable and able to live without concern (over money issues, for example).
I expect that if you gave a control group a comfortable life / success and
just $1,000 a year then a large part would also be happy. Reverse would apply
to a group with $100K but put through merry hell :)

A better conclusion would be that happiness is probably being comfortable and
feeling successful etc.

------
yason
You can be happy with really low earnings, too. It's just _harder_ then but
the happiness or lack of it is still inside your head.

It's harder with very little money because you will have to learn to be
_truly_ happy—not just I-don't-have-to-worry-about-paying-for-food-and-rent
happy.

In the latter case, you can keep thinking of how happy you are because you
have so few things to worry about. In the former case you can't afford to
worry at all.

------
larrykubin
Last time I read the number was 12,000:

[http://www.washingtonpost.com/wp-
dyn/content/article/2006/07...](http://www.washingtonpost.com/wp-
dyn/content/article/2006/07/02/AR2006070200733.html)

I must say, I got by with 12k (what I made in 2004), but if any emergency
would have happened I would have been in trouble.

60k is very comfortable here in Texas.

I also know some very miserable millionaires who are depressed no matter how
many pills they take.

~~~
acangiano
It really depends on where you live. In Toronto, I pay more than $16K a year
in rent alone.

------
JustinSeriously
I think the key take-away is this:

    
    
        But the real trick, Kahneman said, is to spend time with people you like.
    

I've looked at my history of happiness, and I've found very little correlation
between my salary and happiness, mostly just a short term happiness bump when
I first get a raise. On the other hand, the correlation between nearness of
good friends and my happiness stands clearly.

------
jamiequint
Everyone here seems to be missing the fact that in the video he differentiates
between the "experiencing self" and the "remembering self".

With respect to the "remembering self", the reflective state, the more money
you earn the more satisfied you are. Or to paraphrase Socrates:

The unexamined life is not worth living, unless you are poor.

------
Maven911
A better title would be: "Study shows that happiness does not increase with
salary if you make over 60k a year"

------
marilyn
Apparently you only needed $40,000 to be happy in 2004.
[http://blog.penelopetrunk.com/2004/08/01/you-only-
need-40000...](http://blog.penelopetrunk.com/2004/08/01/you-only-
need-40000-to-be-happy/)

------
cloudkj
I think the caveat is that the money is earned doing something you enjoy. I'm
sure most of us here can attest to that.

------
charlesju
I would be miserable making a steady $60,000/year.

------
klochner
The inverse seems kind of obvious - poverty sucks

------
adamilardi
They say money can't buy happiness look at my __cking smile ear to ear baby!.
Boiler room

------
gyardley
Happiness is not having others try to tell you what makes you happy based off
of some study.

~~~
goodside
I hold the same philosophy with regard to cigarettes. I'll decide for myself
what's carcinogenic, thank you very much.

~~~
timwiseman
I am afraid that saying cirgarettes are carcinogenic is a simple fact. It has
been established strongly that they increase the risk of cancer, and that is
the very definition of the word.

With that said, I support your right to decide for yourself what is an
acceptable level of risk for you and to enjoy them if you please. I choose to
refrain, but that is my choice and you have every right to make a different
one.

~~~
goodside
I was being sarcastic. The intended message was empiricist, not libertarian.
I've been getting absurdly wild karma swings from this comment, and I'm
worried now that the upvotes are all coming from people who think smoking is
safe.

------
dnsworks
Having watched how developers (even several from HN) completely mis-understood
John Allspaw's talk about business needs & deployments, I now imagine part of
the next generation of HN start-up types will begin offering $60k salaries to
engineers citing that TED video as the basis of their market rate guesstimate.

