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July 05, 2007


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I think that the reason that there's no significant jump after you're making the 50K or so is because to make more you need to put in that much more effort. This just means you have less ability and time to spend with the things your money can buy you. Also being in the higher tax bracket means that you "need" to have a nicer house and car and ultimately more stress from all of the expenses. I know there is absolutely no reason that you need any of this but often when people make more money their expenses go up as well.

I'd like to see what a survey like this would look like if you could compare those bringing in 90K versus 50K if you took into consideration ample free time to do what you wanted with that money. I think you could do more things that would make you happier with 90K than with 50. If all you consider is every day life then I completely agree that the moment your needs and some basic wants are covered a whole bunch more money won't make a huge difference.

I tend to disagree.

I'm not saying that money is going to be the main source of happiness. I'm not saying that it's a substitute for good friends and family. What I am saying is that more money will always make me at least a bit happier, up until the point where I can buy anything I want to without worrying about anything.

There is no denying that every time the UPS or FedEx guy comes to my door with another new gadget (no I don't get them often) that I ordered, there's a smile on my face. I'm still smiling from the purchase of my new car. Not having a car payment would make me smile even more.

Work is stressful for a lot of people. People work because they need money. Won't winning the lottery and not having to work relieve all that stress, thus making you happier? (Please ignore those crazy folks that win the lottery and then go bankrupt a few years later - I never understood those guys).

Baz L
Day In The Life of Baz

I think much depends on your personality, goals, background, etc.

All other things being equal, more money does in fact make me happier. I'm not saying that there aren't more important things. There are - things like health, family & relationships, ethics, etc. are more important than money. At various times in my life, I have given up the oppty to make more money in favor of those things.

But, that said, having money... no make that having more than enough money is a key goal of mine. One that I'm willing to work very very hard to accomplish. And each time I reach a new milestone in earnings and net worth, it makes me at least a little more satisfied.

It's not just about the material things that money can buy or keeping up with the Jones - that's really not it at all for me. It's about the security and independence that come with wealth. Knowing that I'm prepared for the future makes me extremely... something. We need a better word than happy. Happy implies skipping down the street joyousness. Money provides something different, more like contentment or freedom from worry. And I think that is worth just as much as happiness.

And yes, its also about keeping score because I'm a naturally competitive person. The ability to create wealth is a source of pride - and maybe that's because I grew up very poor.

More money = happier, not for me. Two years ago I was making $115 K working for a large corporation. I traveled almost every week, worked VERY long hours, and felt like my main responsibility in life was to squeeze a bit more profit margin out of my region. At age 50, I made to the decision to leave the "for profit world" and accepted a job paying 60K working for a 2 person not- for- profit organization. I have never been happier. So why am I happier? I started the job with 4 weeks vacation. I drive 7 miles to work. I am in at 7:30am and out by 4:15 pm every day! I have a life again. What is interesting is that my finances have never been better. Because I am making half, I took at hard look at how to manage my money and have become very good at being both frugal and a good saver. The kicker is that my job has a wonderful SEP-IRA program where the organization contributes 5% of my salary (no cost to me) and I have access to a TDA plan. Funny - I used to worry all the time about money before, now I see it as just another part of my life that needs regular attention. My partner says I have never looked better and my 3rd daughter (who is about to start college in the fall) has a Dad that can be part of her life. That's my story, I hope it is food for thought for those boomers out there.

@ John - You're an excellent example of how to reevaluate one's priorities and act on it. Though on the surface, it might seem that we are probably very different, actually, I think we are probably of somewhat similar minds. For as much as I am focused on building wealth and willing to make some very significant sacrifices to do so, I also recognize that you need to enjoy your life along the way in order to maintain your sanity and humanity.

I'm fortunate in that I've found ways to both earn a good living and enjoy my work and personal life too. Not saying there aren't compromises, most people would say my work/life balance is out of whack. But, when you get satisfaction from what you're doing, it doesn't seem so much like work.

I haven't taken a pay cut of the magnitude you describe, but I've passed on plenty of opportunities to make more money because of the potential impact on my marriage, health, and personal life (too much travel, hours, stress, etc.), and I've shifted jobs here and there to try to find the right balance.

I see life in terms of phases - the hunker down and work like a maniac to get established phase, the aggressive wealth building phase, the dial back and reap the rewards phase, etc. I think the important thing is to continually think about what the next logical step is going to be and anticipate what kind of life you'd like to have both now and in the future, whether its money goals or work/life goals.

That way, you have options, you're in a position and frame of mind to TAKE ACTION, and you have a way to get where you want to be.

Money can contribute to happiness, but in most cases is not the determining factor, especially for persons with an above average income. Once you have your basic needs met and have a decent lifestyle, other things are really more important. My income is substantially above $90k. Having a high income is nice, and if you have financial discipline it can solve certain problems, however, if you don't have financial discipline, and stay in the rat race, the high income may only contribute to your problems.

For me, I get more satisfaction from net worth than income. It's what you keep that counts. I have seen surveys that people that make a little more than their peers are usually satisfied, and any money beyond that does not bring as much satisfaction.

The more important determining factors of happiness, in my opinion are:

1) Having a relationship with God.
2) Choosing the right spouse
3) Being able to spend time with family
4) Having a satisfying job or career
5) Having a purpose in life (this can be hard to figure out)

Granted, if you screw up your money decisions, it can make you miserable, but if you screw up any of the above, it can make you even more miserable.

A late comment, here, since I'm catching up with the blogs I read: but the only comment needed is from Ecclesiastes 5:10
Whoever loves money never has money enough; whoever loves wealth is never satisfied with his income. This too is meaningless.

More money isn't a direct line to happiness, but it buys an awful lot of options and security (both freedom TO and freedom FROM, if you can dig it). So more money might make you happier, but only insofar as you are able and willing to leverage the freedoms that might come along with it. Unfortunately, most people I know seem to be more interested in buying stuff than they are in buying freedom.

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