
How much salary is enough? Apparently, $75,000/year - ca98am79
http://www.curiousjuice.com/blog-0/bid/89407/How-much-salary-is-enough-Apparently-75-000-year
======
daeken
$75k is a decent salary in most of the US, but if you're in NYC or SF, even
his 20% variance (bringing it up to $90k) just isn't enough. If you want to
save money, buy a house in the future, and have money to do things, then $120k
is minimum in Manhattan, and $90-100k in most of the rest of NYC. Yes, you can
live very cheaply in NYC, but at the expense of time; I personally don't want
to travel for an hour or more to get to an office, myself.

Saying that a salary is "enough" because that's where happiness flattens out
is silly. Most people have no idea how to manage their money, stay out of
debt, and prepare for retirement, so they're happy once their salary outstrips
their immediate ability to spend.

~~~
Retric
At 90k in NYC you can easily cover a nice 3k / month 1br apartment and have
~2,000$ / month leftover which is enough to cover expenses and have solid
savings.

Edit: used wrong calculator.

~~~
scrumper
No landlord is going to rent you a 3k/mo apartment on a 90k salary. Most
require your gross annual income to be at minimum 40x the monthly rent, ie
$120,000.

The whole point of living in a top-tier city like New York is to experience it
and enjoy it. Living like an austere hermit isn't the way to do that in NYC,
where so much of the scene revolves around putting expensive things in your
mouth in front of other people. Maybe on the West Coast, where people can ride
bikes without being ground to paste by ten ton trucks running red lights and
walk down elegant boulevards that aren't carpeted with human waste, you can
live frugally and experience a good life in the city. But not here.

~~~
dasil003
I would pit SF's feces/sidewalk ratio against NYC's any day of the week my
friend.

~~~
scrumper
Fair point. We definitely have more trash though. So much of it. Frozen great
mounds of snow-covered hepatitis in winter, and stinking black fermenting
vessels full of distilled evil in the summer.

~~~
dasil003
And to think I thought SF had the market cornered on dramatic prose ;)

~~~
scrumper
Please. _Everything_ here is either worse or better than it is everywhere
else. That's why the whole of the rest of the world without any exception at
all is in absolute awe of New York. :)

------
jastanton
I tried to trick myself once I started making more than 60K by splitting my
direct deposit into checking and savings. Now every raise I get goes directly
into savings and I try to live thinking that financially i've been in the same
place as I have been for a while. It works fairly well but once you get
married, buy a house, and have kids things change quite a bit.

That all being said if you think that your salary correlates to your happiness
then you're chasing the dragon.

~~~
Retric
This actually get's back to why a lot of high salary people have issues with
retirement. Suppose your salary doubled between 40 and 50, well your
retirement savings have not changed but there is a huge temptation to live a
little. Soon retiring on your old salary starts looking like a huge hardship
and you end up working even longer vs. that ever so tempting early retirement.

------
ashray
I think this is best evidenced by my joy at payday. When I started out my
website (about 13 years ago..), the first $25 payment really thrilled me!
Eventually, I had bigger milestones. When I got to $100/month that was
awesome! Then, we got even bigger.

Now, even an extra $3000/month gives me a nice feeling but nothing much to be
honest.

I think money only goes so far. Once you're comfortable, it's only
achievements and breakthroughs that can really make you happy.

Case in point: A blog that I started recently got it's first money (around
$120, and I was overjoyed!) :)

------
codegeek
It is enough as long as you can manage the following math:

Cashflow in (net) > Cashflow out (net)

It is that simple. Yes of course at $75K in NYC, your "cashflow out" variable
needs to be lower than what it would be at $120K. So it is your choice. Make
$75K in NYC but want to live in manhattan ? Sure, you can do that but your
non-housing costs have to be significantly lower.

Master that formula for life and u r golden. I have been doing it for years.
My income has seen significant changes over past few years (luckily positive)
but when in confusion, I use this formula time and time. Also, I love to
discuss this with my wife whenever she says "we make so much money. Why can't
we buy X now"

~~~
hudibras
Somebody's been reading _David Copperfield._

"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."

~~~
codegeek
funny but this is something that sounds so trivial once someone says it. Most
people however overlook this simple formula because they use emotions rather
than brain.

------
purplelobster
It's not about the salary, it's about how much you put away and how much you
need to live on. I make about $80k after bonuses, not a whole lot in some
places like SF or NYC, but I find that in Portland, I'm able to save 40-50%
after taxes. I know that would change if I bought a house or had kids, but
still.

~~~
up_and_up
> I know that would change if I bought a house or had kids, but still.

Understatement of the year, replies a man with wife, house and 3 kids.

~~~
purplelobster
Well, I'm hoping I'll be earning more by the time I have those things. And the
reason I'm saving up right now is because I can. I rent a small studio, bought
a 14 year old car etc. I'm guessing this will be the only time of my life when
I can put away this much. I see many doing the opposite: getting a $1500
apartment and a new car when they get their first job.

------
josephjrobison
Does $75k mean pre-tax or post-tax?

Post-tax comes out to $46,800 a year in California, that's $3,900 a month.
Which is great, but yea when you start thinking about a wedding in the future
and kids college, you're left with $900 a month to save for those things,
granted you don't blow it on vacations and other activites.

A sample monthly expense (doesn't apply to everyone, can be reduced by a lot
by eating beans out of a can and walking 12 miles to work)

If you're paying $1,000 a month in rent $100 in utilities $400 in groceries
$100 eating out $100 clothing/supplies $400 car payment $200 gas $400 student
loans $200 in credit cards $100 in misc.

That's $1,300 left over.

~~~
ShawnBird
> $100 in utilities

That seems really low. I live in a small house and here are my utilities:

Phone: $50

Internet: $60

Water/sewer/garbage: $100

Electricity: $80 (less in the summer, more in the winter)

Gas: $10

And you left out mandatory insurance which is ~$150 for car + home.

Total: $450/month

~~~
josephjrobison
Oh well I live with two roommates so $120 cable + $40 water + $60 electric =
$220/3 = $73+.

And yes auto insurance is something I forgot at another $100 :)

------
therandomguy
Here is an almost bizarre theory. When your salary crosses the average number
your enjoyment of things that you can buy with money goes down drastically.
You have much more appreciation of the used car that you bought out of college
as the monthly payments pinched you a little. A good way for you to maintain
that effect is to keep stepping up your lifestyle as your salary increases.
Constantly buying a little more than you can afford. You can easily afford a
Honda now? Buy BMW. Goes against conventional wisdom, but food for thought.

~~~
patio11
One could envision a business built on providing a convenient wrapper for this
strategy, where you sell young professionals functionally equivalent copies of
the goods they purchased as college students, but charge three times as much
for them. This would let you signal to the young professionals that they have
"made it. (They'd probably also tsk-tsk about college kids buying things which
cost X. I mean, sure, college kids don't have 3X, but isn't 2X the _absolute
minimum_ to know that it is safe for human consumption? Oh, college kids...)

~~~
daeken
I hate to say this, simply because I spend so much there, but you pretty much
just described <http://fab.com/> Much of what's there is just high quality
versions of minimalist furniture and decorations you'd see in Ikea or any dorm
room in America.

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jpdoctor
> _When did a millionaire become a working class stiff?_

1990s, so not exactly news to anyone familiar with inflation.

The expression is pre-1980s really. Put $1M in an inflation calculator for
1975, and you'll find that equates to about $7M now. It makes sense: You'd
live very well off of interest from $7M.

------
pwthornton
As has been discussed elsewhere, this slides a bit depending on where you live
and I've seen charts that list how much you need to make for your market to be
happy enough, but that's not germane to the overall point.

It is ultimately true that money and things can't buy happiness. Life
experiences, friends and family have a far greater affect on happiness. Going
on a memorable vacation, for instance, will do more for your happiness than
remodeling your home. There are several reasons why increased money doesn't
necessarily make people happier:

# Making more money often requires more time and responsibility. Neither tends
to make people happier. If you have to spend more time working to make more
money, you might be happier making less because you'll have more time to spend
on your hobbies.

# People tend to spend more money the more money they make, often in ways that
don't make them that much happier. Making $150,000 a year? Time for you to buy
a house fitting of a man who makes $150,000 a year! Even though, you might be
happier living in a smaller, simpler house and a bigger house and mortgage
means you may not be paying a lower percentage of your income towards housing.
Or you might be happier with a smaller mortgage that doesn't require a
$150,000 a year job to support (it's harder to find high paying jobs, which
makes the threat of losing them more stressful).

# One of the great keys to happiness and longevity is friendship. If making
more money requires you to spend less time with friends and making friends, it
won't make you happier.

~~~
pwthornton
As for me, what would make me happier financially? Not having a mortgage would
be number one. Well, wouldn't making more money help that? Yes, but the
temptation for a lot of people would be to just get a bigger, more expensive
place.

This is why you'll find households in the 90+ percentile will mortgage
payments late into life. Instead of paying off their mortgage faster, they get
bigger houses, do remodeling and spend more and more on their houses. My wife
and I might get a slightly bigger place when we have kids, but we'd like to be
mortgage free by the time kids go off to college.

------
dinkumthinkum
Let's be honest, no matter where you live $75K isn't much. Even if you live in
cheaper areas, it may not be poverty but it's certainly not happiness inducing
wealth. Let's be serious.

~~~
rprospero
I completely disagree. I'm making $27k and that's more than enough to keep me
happy. Sure, there's some niceties that that I could pick up with a $48k
salary that would ease some stress, but I'm certainly not living like a miser.
I'm seeing Joshua Bell in concert next week, my fiancee and I have two cars,
and the we go out to eat regularly.

Honestly, if someone can't be happy with $75k, I can't imagine that $75M would
fix it.

To prevent anyone from asking, yes, I'm living in the US.

~~~
dinkumthinkum
I don't want to upset anyone or anything but $27K is in the ball part of
poverty. I'm glad you are happy that's fine -- everyone is familiar with the
idea that money is not the only way to happiness. Simply because you are happy
is not really much an indicator, let's be honest. I don't want to call you
out, it's not my intention. Some people are perfectly happy to live an acetic
lifestyle with no money in a mountain in Nepal. Perhaps you are similar in
mindset, that's perfectly OK. But that's neither here nor there; it's anomaly.
Because you both have cars doesn't speak to much; we don't know how they were
paid, how old they are what happens if their's transmission, whatever. To
compare $75K with $75M is almost hard to take seriously.

------
pfedor
So never mind that there are other studies which point to different findings.
More importantly: the study finds that money above $75k has no impact on
"Emotional Well Being = the quality of a person’s everyday experience such as
joy, fascination, anxiety, sadness, anger, and affection" however at all
levels more money improves "Life Evaluation = a person’s thoughts about his or
her life (on a longer time scale)." How have we decided to call the first one
"happiness" and not the second one? Maybe that's how the psychologists define
happiness, but it's not the everyday meaning of the word as I perceive it.
Granted, English is not my first language but I would say "happiness" includes
both "emotional well being" and "life evaluation", and maybe even with more
emphasis on the latter when contrasted with, say, "joy" which is the one that
pertains more to the short-term states, isn't that right?

As a concrete not money-related example, parents of young children probably
typically don't have very good "emotional well being" as defined above, but
nevertheless by every account I've heard they're usually very happy, which
means precisely their "life evaluation" is high.

------
tibbon
Living in Ohio on about that now. If It wasn't for relatively giant student
loan payments (stupid private school... yes it was a poor idea), then yea...
that's absolutely enough money for _most_ places (not Boston, NYC, SF, DC,
etc). The only real reason I'd like a bit more still is to offset those
payments and allow a bit more travel.

------
dzlobin
It certainly might be enough, but I'd imagine that you are delaying the
worrying and stress for your retirement when you realize you saved $100k over
30 years.

------
727374
Yep. Just times by three if you live in SF with a family.

~~~
sp332
It might be $75k per person. Certainly +100% for a spouse and more for kids.

------
samstave
I am so tired of this argument, and the only people here in support of such a
statement, I feel, are the young single and childless.

Take a divorce, child support, travel etc into account and I cannot live on
anything less than $150K

Rent for a house with several children, for me, is $2300 for a two bedroom
with a garage, yard and an extremely lucky addition of a very large play room.

I am REALLY lucky to have this place - as it would go for $3500+ if I move
out....

The argument for less and less salary always sounds to me like peasants
justifying their fealty, though at the same time - we should not be decrying
arbitrary pay brackets - but demanding more fair pricing for all the tings
that are required to survive and thrive.

Everything is overpriced.

~~~
esrauch
I honestly thought you might be kidding at first, but it looks like you are
serious. The vast majority of people who have divorced and pay for 2 kids are
making far far less than $150K and they aren't starving to death. Only about
5% of _households_ in the US make more than $150K/year; if you feel like you
are scraping by with that much income then you must be buying a lot of things
that you don't actually need.

~~~
samstave
I don't buy anything I don't need. I pay cash for everything and have no debt.
But with a $2000 a month child support bill, full medical, $2300 rent, ~$500
in other bills, etc, I do not have much left at all after all my basic
expenses.

People think $150k is a lot on paper - but when you add everything up, it is
not actually a lot.

~~~
esrauch
I'm sorry but I'm really not convinced. Even given all of that, if you are
making >$150K then you are still pulling in probably >$3k / month in
discretionary spending which alone is the same as the total pre-tax median
household income in the US.

Half of America is literally paying for all of childcare, medical, rent, other
bills and basic expenses with less than you consider necessary to cover your
basic expenses and it isn't like there is mass starvation in the US. It simply
doesn't add up to you being in hardship when you are in the top 5% of earners.

~~~
Woost
Assuming a 40% tax rate (overestimating) and the expenses listed here, that
leaves 2700/mo spare, still a good bit, but:

That 2k/mo child support payment is what's insanely high(that's rent for an
entire family!). Most families don't have to deal with it, and, further, get
by with significantly less money spent on their children, assuming they run
the numbers and figure out an appropriate budget.

------
lifeguard
Once you cross the 70k mark, you can have almost anything you want. Sure,
people can contrive lots of contra-examples in your replies. But the truth for
real/average/majority of Americans is that level of income makes any
toy/hobby/charity possible.

It also caries with it dental, health and disability insurance.

Being able to document 70k annual income offers almost unlimited credit if you
have good credit and forgiveness if you have bad credit.

But at that level one is an expert and if you do not get your fair market rate
it means someone is ripping you off so you want your proper pay just as a
matter of fairness.

~~~
Evbn
In the US insurance isn't free.

Credit is not unlimited, it is 3-5x income max.

And income has to pay for retirement as well, unless you want to work until
you die.

~~~
lifeguard
If you earn over 70k, benefits are always included. A few hundred a month
employee contribution, but insurance is a non-issue. These benefits also
include 401k of some sort, maybe even matching. If you don't work 1099, you
acrue social security benefits.

I submit one can get over $500k of consumer credit based on 75k income and
existing good credit. Not a home loan, consumer credit like a Sears card.

------
drharris
This is not too far from my own salary in a rural-ish area, my wife making
half that as a teacher. We budget and manage our money carefully, and are
indeed happy; we never disagree about money. When I was in major debt, I found
I was constantly stressed and on the edge. Once it got paid off, I felt free.
I have a mortgage and student loans (and a year left on a car note), but it's
just a monthly payment with low interest. Even with a second child on the way,
I don't feel worried; it won't be easy, but it's definitely manageable.

One of the biggest mistakes I make is seeing people save for their kids to go
to college. Not only can you barely beat inflation (if not for the tax
benefits), what happens when your child wants to major in Psychology? I treat
college like an investment; for some careers it's appropriate, others not. If
it's appropriate, then you should be able to take out loans that can be repaid
in 5-6 years. If the career they want does not allow for that, then some
better decisions need to be made. Nothing wrong with skilled trade these days.

My only worry (and it doesn't keep me up at night) is with retirement. I save
probably 10% toward that, with 11% returns the past few years (I know,
right?), but even at that rate I won't really be able to retire until my late
60s if I want any sort of decent life. I'm working now on trying to save more
so that maybe I can retire earlier.

In the end, I believe unhappiness with money has more to do with debt than
income. I'd imagine the results are skewed because people making $75k may also
tend towards less debt. I imagine those making half that amount would be
plenty happy if they had no debt to worry with.

------
jinushaun
Reading the comments on here, it's incredible how many on HN don't realise how
privileged they are. $75,000 is a lot of money, even in NYC and SFO, and the
people who think otherwise are probably single 20-30 somethings that insist on
living by themselves. Traditionally, children lived with their parents, even
after marriage, until they can _afford_ to live on their own.

There are millions of people in America living in much less than $75k per year
and doing just fine even in the big cities. (Otherwise, there wouldn't be a
"bad part of town") My parents raised three kids on less and they now own a
house and two cars. People in higher incomes forget that there is an entire
other country of people who make much less money than they do. 72% of
households in the US live on less than $75k. In Manhattan, median income is
$65k! There is living breathing proof of people living below these numbers
everyday. _These aren't unicorns._ It's not rich, but nor is it poverty, which
is defined as $11,500 in NYC for an individual.

Truth of the matter is, if I made $75k, I'd have a $75k lifestyle. If made
$150k, I'd have a $150k lifestyle. Even if I made $1M per year, I'd have a
million dollar lifestyle and probably still _feel poor_. I'd drive a more
expensive car, buy more expensive groceries, live in more expensive housing,
eat at more expensive restaurants, wear more expensive clothes, have more
expensive hobbies and take more expensive vacations. _What this article claims
is that past the magical $75,000 mark, we are as poor as we allow ourselves to
be._ Saving money and not building debt is very hard to do for most people.
It's a fact of life that people like to live beyond their means. I know I do.

------
honu
One premise the author stated is "cutting your spending rate is much more
powerful than increasing your income". The idea seems to be that this both
increases one's ability to save while also lowering the bar for current and
future expenses. Many people could benefit from taking a hard look at their
expenses and trying to find areas to cut.

That being said, taking this orientation has its limits. First, there is a
floor to how much savings one can make on a given lifestyle. Additionally, the
upside potential is limited if a lot of time and effort is spent on trimming
expenses.

Some folks, especially the type of folks who frequent HN, have substantial
opportunities to increase their income (e.g., through freelance work) that
often suggest that increasing income is MUCH more powerful than cutting one's
spending rate (I think patio11 has mentioned something like this). Often times
the equivalent of one or two hours of tech consulting can cover the cost of
many "unnecessary" conveniences that save one time and/or effort.
Additionally, it's much more scalable -- that is, the upside of saving more of
an increased income frequently has more upside potential than cutting costs.

Of course, not everyone can do tech work, and even tech workers will probably
need to adjust their spending to a lower level once they are on "fixed
income", but I think these lines start to stray from the central issue.

As for startups, I think a holistic approach to assets and resources needs to
be considered. Specifically, often the scarcest asset is founder time, so
spending money to save founder time is often an <i>extremely</i> prudent
choice to make in terms of adding value to the company.

------
cantastoria
Call me paranoid but I always feel like these studies are being done to lay
the groundwork to justify tax increases on the affluent. "You don't need to
make that much, we've done research! $75,000 is all you need trust us, you'll
be just as happy." Just a thought...

~~~
joonix
These studies just want to cram everyone in America into one cliche
stereotypical lifestyle. Have you seen the the lifestyle of the Average Joe?

Diet of terrible, unhealthy processed foods and fast food. Chain restaurants
like Applebees for a special night out. Overworked, with minimal employee
protections and benefits. Limited traveling/vacation time. Living in isolated,
distant suburbs with soul crushing commutes in traffic.

I'm not knocking these types of people, but I doubt many on HN would be
content with that standard of living. For that lifestyle, $75k/yr is more than
enough. But I would hate that lifestyle, so $75k simply isn't enough.

------
hippich
My problem with this - I need money to do stuff I like. And only making stuff
makes me happy. Solution to this is to be paid via what I do to make myself
happy. I am not there yet, but I will I am sure.

------
Irregardless
Well, at least he proved himself wrong by posting this link: "Yes, Money Does
Buy Happines: 6 Lessons from the Newest Research on Income and Well-Being"

[http://m.theatlantic.com/business/archive/2013/01/yes-
money-...](http://m.theatlantic.com/business/archive/2013/01/yes-money-does-
buy-happiness-6-lessons-from-the-newest-research-on-income-and-well-
being/267016/)

------
maxharris
"Enough" perhaps for an average person, with average ambition (far below what
it ought to be) and ability, living in an average house, in an average town.
Which describes no one and nowhere.

------
hhuio
I make more than double that and I still can't afford a house here :(

------
byjess
You can also divide that by the number of mouths you have to feed.

------
tbatterii
and if you're married and have kids..... multiply by 3 at least.

------
ygmelnikova
A society that correlates material wealth with happiness is shallow and
deprived. Or have you never read Dickens?

------
Evbn
Does this article talk about regional variance of cost of living? Saving for
retirement? Raising kids? Or is it the quarterly blogspam repost of a poorly
structured survey from many years ago?

~~~
dmazin
The main discussion of the article consists indeed of the things you
mentioned.

