How much money do you need to make?

After yesterday's post about the study de-linking money and happiness, it seems like a good follow-up to point to Penelope Trunk's interesting column a few weeks back asking the question, "how much is enough?"

Looking for happiness through financial success? Wondering what is the magic number that equals satisfaction? It's $40,000 a year.

Really. Oprah's magazine says so. And so does Harvard psychologist Daniel Gilbert, who studies such things.

She describes her own experience in the past as her yearly income rose to a point where she was making $200,000 a year. As so often happens, she says, "My expenses rose with my salary, and my desires expanded with my bank account." In a situation where money is the focus, there is no such thing as "enough." She points to her experience working with venture capitalists as an example.

Maybe you're thinking there's another magic threshold beyond $40,000. Like maybe $40 million. But you're wrong. When I ran in circles of venture capitalists, there was a common phrase, "It's not jet money." Which was a way of saying, it was a good deal, but it wouldn't earn enough money to pay for a private jet. No matter what size the pile of money, there's always a way to see it as small.

Back to the magic $40,000 figure, Penelope writes...

In fact, the rule is well established in research: The first $40,000 makes a big difference in one's level of happiness. After that, the impact is much smaller. The difference between someone making $40,000 and someone making $15,000 is far greater than the difference between $100,000 and $1 million.

Happiness is dependent on being able to meet basic needs for food, shelter and clothing. After meeting those needs you need to turn to something other than consumerism because additional money has negligible impact on how happy you are. Your level of happiness is largely dependent on your outlook.

Curt Rosengren
Passion Catalyst ^SM

Comments

[Alastair]

Thank God!

I've been struggling with money v. happiness and "What do I want out of life?" questions for some time and got a load of negative feedback from my own blog here (http://www.ecademy.com/node.php?id=36523).

Glad to know I'm not on my own.

Al

[sean]

i m 27 almost 28 now i star to study eally hard...can u point me a direction whchi i can follow to get my approval oh psychologist,,,,,,,,,thank u and tell me how much u make every month to decide should i keep going on this road,thanku

[Mike Steele]

We live in a world where most of the people on the planet live on less than five dollars per day. It is natural --- but in a way obscene --- to say than one needs more than $100 per day to be "comfortable". I know of no way out of this predicament, but it should make all of us "uncomfortable."

[CJ]

I'm 45 yrs old, my house is paid for, my car is paid for, my husband makes reasonably good money. I want to chuck my current job to become a home health aide to help seniors. I have always loved old people. Money doesn't mean that much to me. My happiness comes from making others happy.

[Barbara Saunders]

The studies delinking money with happiness leave out a big, white elephant -- how a person earns her living. Without getting too personal, I earn above the $40,000 threshold but am by no means rich. What I currently do to bring in my income is to drag myself to a nine-to-five job. I am quite aware that my attempts to increase my income are really connected to the goal of increasing it to provide the cushion that will enable me temporarily to take off the time to establish some other way of making a living. (Yes, I am also working on that goal now in my spare time!) I could live happily on my current income, continuing not to have the stuff that I covet but don't have, if I could just spend my time in a more productive and less hurried way.