Author Topic: Does Peak Happiness Really Come at $75,000/year?  (Read 28234 times)

tooqk4u22

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Does Peak Happiness Really Come at $75,000/year?
« on: September 11, 2012, 07:43:02 AM »
For the moment lets ignore that the number is highly influenced by ones location. 

Overall the premise of the post makes sense but it ignores some basic premises about the differences of not being FIRE and having to work (i.e. get paid to go and do something for someone else) and being FIRE living off of investments and MMM focuses on the expense side for the argument and not the income side. 

As I read through the comments they are peppered with broad ranges of things like I only need $2000/month, or if I had $75k a year I would be rich, MMM made a lot more money to get where he is, you need to make more to live, etc. And they are all right to some extent but it depends on the stage. 

While it is not stated I think the $75k range is based on working people/households because as we all know it is not commonplace to think or act like many of those on this board - even still this income range is probably good for those on this board (who aren't FIRE) to be happy.

The fact of the matter is if you can and want to live on $2500/month but only take home $2500/month then you will never FIRE (yes, I realize the obviousness of this statement but people who think $75k is a lot are nuts if you want to FIRE). The reality is that $2500/month is hard to achieve if you have to still pay for rent or mortgage.

Keep in mind that $75k translates to about $55k after taxes (fed, state, ssi, medi) and health insurance - still a good number.  Then you need to buy a house and pay for all that goes with it (taxes, insurance, repairs, etc), normal living expenses (groceries, utilities, clothing, etc.), auto related expenses (purchase, insurance, fuel, maintenance) and people still need some recreational release whether it be fitness, vacations, eating out, other entertainment.  And lets face facts that there are additional expenses incurred becuase of having to work. 

All said and done if you are living relatively frugally (at least by normal standards) at median type figures for housing prices/property taxes then your monthly spending will be about $3000 or $36000 per year.   But lets say you only need $2500/month to live if you are not working and mortgage is paid off.  At 4% SWR that requires $750k.  While you are working you are saving $19k per year so to get to FIRE at a 4% real return it would take 25 years - so if you want to FIRE then $75K per year will not make you happy but in a normal sense of living it seems about right while you are working because it gives you enough to live comfortably while supporting a family without undue worry and allows you to save a bunch to retire earlier than the norm but not real early. 

So sure MMM is badass because he lives modestly, spends little, etc. but at the end of the day he and wife made a lot more than $75k and was smart enough to save/invest instead of spend it all but if he had made $75k  he would not of FIREd when he did, or at least not in the house he did and even then probably not. Note that in year 3 of his post below he said his salary was $77k which adjusted for inflation at only 2% is like $99k today - this does not include Mrs. MMM salary.

Anyway the point is that a higher salary matters a lot in ones happiness in general and even more so if FIRE is important.  Managing expenses is very important because it allows you to save more and reduce the size of stash you need to FIRE, but income matters far more as it relates to the time to get there.


http://www.mrmoneymustache.com/2011/09/15/a-brief-history-of-the-stash-how-we-saved-from-zero-to-retirement-in-ten-years/




arebelspy

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Re: Does Peak Happiness Really Come at $75,000/year?
« Reply #1 on: September 11, 2012, 07:58:38 AM »
I'm planning on FIREing in another 5 years with roughly the numbers you state (a little more income, due to side jobs, not having a high paying one) and a little less expenses.

It can be done.

Mr. And Mrs. MM did it fast with a high salary, but that's not the only way.

The wife and I will never make 6 figures on our base salary combined (and we each have Master's degrees) and I still plan on FIREing before 35.
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tooqk4u22

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Re: Does Peak Happiness Really Come at $75,000/year?
« Reply #2 on: September 11, 2012, 08:23:00 AM »
I'm planning on FIREing in another 5 years with roughly the numbers you state (a little more income, due to side jobs, not having a high paying one) and a little less expenses.

It can be done.

Mr. And Mrs. MM did it fast with a high salary, but that's not the only way.

The wife and I will never make 6 figures on our base salary combined (and we each have Master's degrees) and I still plan on FIREing before 35.

I didn't say it couldn't be done (although I did say it wouldn't have happened while paying off a $400k house) and to do it at $75k requires more than just limiting expenses. 

So lets look at your own way of doing it.  Your earlier post indicated you and your wife gross is about $95K.  Granted this probably hasn't been your whole career but $20k difference is huge in the quest to FIRE especially if it is all being saved. Also my guess is that because you are both teachers your healthcare premiums are next to nothing relative to private sector so your net is also probably a bit higher.  How about the $15k extra income that you make is that cash/under the table so no income/payroll taxes paid on it - that also helps and would make your gross more like $100k.

I also note you are more focused on buying homes for rentals, which is a great strategy in targeted areas and appears to provide good cash flow and returns well above 4% real return that I indicated (don't confuse this with SWR after FIRE this is the return while trying to get there and is 7% nominally) - getting 10% changes the FIRE calc dramatically.  Could be risky, could be conservative - I don't have enough facts but the higher expected return will help you get there sooner as well.   My guess is that if I were where you are I would by gobbling up real estate as well, where I am at the numbers make no sense at all.  Also no kids in your equation yet, that will add to expenses but I get that you are waiting to FIRE.  Most people don't do this.

In short you manage your expenses and they are probably as low as they can go, you made the decision to expand your income to get there quicker, and most would view that you are taking on more risk to get there (again I don't necessarily have a view on this because I don't know). 

So it can be done but even by your own story not at $75k while getting a 4% real return until fire.
« Last Edit: September 11, 2012, 09:05:33 AM by tooqk4u22 »

arebelspy

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Re: Does Peak Happiness Really Come at $75,000/year?
« Reply #3 on: September 11, 2012, 09:16:06 AM »
So lets look at your own way of doing it.  Your earlier post indicated you and your wife gross is about $95K. 

Sure, but our base pay is about 80k, fairly close to your 75.  The extra 15 comes from extra side jobs, an option available to others as well.

How about the $15k extra income that you make is that cash/under the table so no income/payroll taxes paid on it - that also helps and would make your gross more like $100k.

Absolutely not true - it gets tacked onto our regular paycheck, and we pay taxes on it.

I agree with most of the rental comments - higher risk (or traded for more work to lessen the risk), higher reward.

In short you manage your expenses and they are probably as low as they can go

No, we don't try to lower our spending.  We spend as much as we want.  If we tried, we could probably cut at least 5-10k from the 25k/yr we spend.

you made the decision to expand your income to get there quicker

Yes.  Again, an option available to others.

and most would view that you are taking on more risk to get there (again I don't necessarily have a view on this because I don't know). 

Sure, potentially.

So it can be done but even by your own story not at $75k while getting a 4% real return until fire.

Yes, if one just says "I earn 75k, am not willing to reduce my spending much more, am not willing to work more to earn extra side income, or work more to increase my returns" then yes, very early FIRE is tough.  Target an ER at about 50-55 (see: e-r.org forum for plenty of examples).

If you're willing to change some of those above things because FIRE is important to you (or just FI), then it's absolutely doable, even without the six figure+ salary.
We are two former teachers who accumulated a bunch of real estate, retired at 29, and now travel the world full time with a kid.
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smalllife

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Re: Does Peak Happiness Really Come at $75,000/year?
« Reply #4 on: September 11, 2012, 10:01:29 AM »
Yes, if one just says "I earn 75k, am not willing to reduce my spending much more, am not willing to work more to earn extra side income, or work more to increase my returns" then yes, very early FIRE is tough.  Target an ER at about 50-55 (see: e-r.org forum for plenty of examples).

If you're willing to change some of those above things because FIRE is important to you (or just FI), then it's absolutely doable, even without the six figure+ salary.

You make it sound like early retirement is impossible on 75K.  75K is almost double my current salary (side hustle partially included) and I think I can make it by 40 or 45 - not accounting for raises or a potential mate to lower my expense ratio. 
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tooqk4u22

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Re: Does Peak Happiness Really Come at $75,000/year?
« Reply #5 on: September 11, 2012, 10:15:19 AM »
Yes, if one just says "I earn 75k, am not willing to reduce my spending much more, am not willing to work more to earn extra side income, or work more to increase my returns" then yes, very early FIRE is tough.  Target an ER at about 50-55 (see: e-r.org forum for plenty of examples).

If you're willing to change some of those above things because FIRE is important to you (or just FI), then it's absolutely doable, even without the six figure+ salary.


Yes, yes, yes....that is the point I was trying to convey but the point of the blog article and the many of the comments are that you can live and be happy on much much less from a spending perspective - all true. 

Your way of doing as an example, even if lower income than MMM had, illustrates that you need more income and good investment decisions to get there - so I hope you are not taking my comments as attacking/disagreeing with your way of doing it as it isslustrates people really need to do a lot more. 

My point is, and you seem to agree, that you can't get to FIRE and MMM life without making $75k or more and/or without higher risk/return investments if you want to FIRE (recognizing that most people/couples/families who make $75k don't save a thing) because expense can only be cut so far (if you and your wife can live on $1200 per month then that is impressive but it seems that the the normal low range for people on this site is in that $2000-3000 per month range). 

Yes making an extra $15k is optional but it doesn't negate that it is an extra $15k so you can't ignore it (BTW I wasn't claiming you didn't pay taxes on it, I was asking - as you know not everyone reports their extra cash income).  No different if one was making $60k and did side stuff making $15k - it is the $75k number that matters as that was the figure in the article. For you that $15k could be the down payment on your next house at 10% return or $1500 per year in return.  It matters.  Compared to my initial example for FIRE calc making that extra $20k (the $5k over $75k plus the optional $15k) allows you to save a total of $39k and that reduces the FIRE calc from 25 years (original example) to 15 years - it matters.  If you get a 10% return vs. 4% then it would be 13 years. 

Clearly doable but the increased income makes the difference.







tooqk4u22

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Re: Does Peak Happiness Really Come at $75,000/year?
« Reply #6 on: September 11, 2012, 10:25:52 AM »
Yes, if one just says "I earn 75k, am not willing to reduce my spending much more, am not willing to work more to earn extra side income, or work more to increase my returns" then yes, very early FIRE is tough.  Target an ER at about 50-55 (see: e-r.org forum for plenty of examples).

If you're willing to change some of those above things because FIRE is important to you (or just FI), then it's absolutely doable, even without the six figure+ salary.

You make it sound like early retirement is impossible on 75K.  75K is almost double my current salary (side hustle partially included) and I think I can make it by 40 or 45 - not accounting for raises or a potential mate to lower my expense ratio.

Personally I don't think "Real" early retirement is possible on a mid 30k salary, especially if you are only saving 15% as you have indicated elsewhere, and even retiring at 40-45 will be tough unless you increase your income or savings rate substantially.  Your income will certainly rise over time but it needs to rise greater than inflation, which early in your career is easily doable as long as you give a little effort.

arebelspy

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Re: Does Peak Happiness Really Come at $75,000/year?
« Reply #7 on: September 11, 2012, 11:55:13 AM »
tooq, I'm guessing you haven't read much ERE.

There are lots of examples on their forums of people living on very little, and being able to ER on small salaries.

You are coming too much from an ER and MMM perspective of lavish spending. Approach it from an ERE perspective.

75k, save 75%, meaning you need to get spending to just under 19k. That's on the high end of most ERE budgets, I'd wager.

Many of them spend ~1k/mo. 50k salary gives you a 75% savings rate at 1k expenses.

Everyone's circumstances are different (cost of living, kids, etc.), but ER is possible at most incomes. More helps, naturally. I agree with that.

But it can be done with less, and not to difficulty. Heck, save only 50% and you're on track for 20 years. Start at age 25 out by age 45. 50% should be doable, hopefully.
We are two former teachers who accumulated a bunch of real estate, retired at 29, and now travel the world full time with a kid.
If you want to know more about me, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
We (occasionally) blog at AdventuringAlong.com.
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cats

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Re: Does Peak Happiness Really Come at $75,000/year?
« Reply #8 on: September 11, 2012, 12:06:12 PM »
It's my understanding that the original FIRE-figurehead, Jacob of ERE, reached FI while he was a postdoc.  Now, I'm not sure exactly where he was postdocing, but this likely means that:

a) he spent 3-7 years as a grad student, earning somewhere between $20-$30k/year (possibly less, but that's the typical range these days).  Definitely less than half of the $75k figure, so even accounting for the fact that he is just one person, he's still below the "peak happiness" figure.
b) he spent the rest of his time as a postdoc, *possibly* earning $75k but quite possibly earning less--postdoc salaries in the mid-$40k range are quite common, in most disciplines a salary of $60k would be considered GREAT, $75-80k means you got a really competitive postdoc or you are in industry.

Somehow he still managed to save 75-80% of his income and reach FI in his early 30s.  I think that pretty much proves that if super-early FI is your goal, it's more about having the right mindset than about making the right salary. It's true that the MMM family earned quite a bit more than $75k/year while they were working, that they've chosen to live in a part of the country where living expenses can very easily be kept low, that they didn't have a load of hardship to deal with and overcome, etc.  The point that they are still incredibly happy while spending significantly less than average still stands (and I took that to be the main point of the post, not the specific $75k number).

tooqk4u22

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Re: Does Peak Happiness Really Come at $75,000/year?
« Reply #9 on: September 11, 2012, 12:34:43 PM »
tooq, I'm guessing you haven't read much ERE.

There are lots of examples on their forums of people living on very little, and being able to ER on small salaries.

You are coming too much from an ER and MMM perspective of lavish spending. Approach it from an ERE perspective.

Your absolutely right - I am not looking at it from an ERE perspective and more the MMM perspective.  I want to have a house, travel, family, all that the MMM way of life.  The majority of people can't won't do the MMM thing and I would wager that most MMM type people won't do the ERE thing.  Sorta like the progression in sports - just about anybody can play high school sports, maybe 1:1000 can play college, then maybe 1:1000 of college athletes can go pro.  Same kind of logic, but as I was reading the MMM blog and not the ERE blog it made more sense to me. 


75k, save 75%, meaning you need to get spending to just under 19k. That's on the high end of most ERE budgets, I'd wager.

Still to the point - when you make $75k you don't take home $75k it is typically more like $55-60k after various taxes and health care. And from a purely MMM approach you need to make more.  The math is not hard to figure out and I have summarized it already. 

Everyone's circumstances are different (cost of living, kids, etc.), but ER is possible at most incomes. More helps, naturally. I agree with that.

This probably has more do with FIRE than anything else.  It certainly does in my case....if not for kids I would be able to live on a lot less than I do. Partly because I wouldn't be in such a higher cost/property tax area (still thinking about changing that though, kills me to hear CO taxes), partly because I want to spend more on some of their experiences (vacations, museums, amusements, etc.), partly because of activities (sports, music, additional educational opps, etc).  Its a balance and frustrating at times, but I have chosen to accept a higher spending rate, delayed FIRE for it, but I do keep two budgets in mind (1) my actual spend and (2) my survival spend - the amount needed to meet basic needs for my family. Needless to say the two numbers are vastly different and if could find just a couple of decent return rentals (not in this area) like you seem to have an abundance of I would may be able FIRE on my survival scenario which in reality is close to the number that will be needed when my kids are no longer on the family payroll (way off in the future).

AJ

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Re: Does Peak Happiness Really Come at $75,000/year?
« Reply #10 on: September 11, 2012, 12:36:25 PM »
b) he spent the rest of his time as a postdoc, *possibly* earning $75k but quite possibly earning less--postdoc salaries in the mid-$40k range are quite common, in most disciplines a salary of $60k would be considered GREAT, $75-80k means you got a really competitive postdoc or you are in industry.

Somehow he still managed to save 75-80% of his income and reach FI in his early 30s.

Based on the info we have, I think we can extrapolate that Jacob made between $28k and $35k net (after taxes). He lives/lived on $7k per year. If $7k is 25% of his net pay (75% savings rate), then he was making $28k a year ($35k if his savings rate was 80%).

tooqk4u22

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Re: Does Peak Happiness Really Come at $75,000/year?
« Reply #11 on: September 11, 2012, 01:08:18 PM »
The point that they are still incredibly happy while spending significantly less than average still stands (and I took that to be the main point of the post, not the specific $75k number).

I don't disagree with that being the main point, my point was simply that you have to make considerably more than what you need to live on and be happy in order to both achieve FIRE and be happy - even in the ERE sense.  As it was pointed out to me and I agree, I definitely am striving for the MMM way and not the ERE way.  To replicate MMM, even in a cheaper house, would take more than $75K per year gross.

b) he spent the rest of his time as a postdoc, *possibly* earning $75k but quite possibly earning less--postdoc salaries in the mid-$40k range are quite common, in most disciplines a salary of $60k would be considered GREAT, $75-80k means you got a really competitive postdoc or you are in industry.

Somehow he still managed to save 75-80% of his income and reach FI in his early 30s.

Based on the info we have, I think we can extrapolate that Jacob made between $28k and $35k net (after taxes). He lives/lived on $7k per year. If $7k is 25% of his net pay (75% savings rate), then he was making $28k a year ($35k if his savings rate was 80%).

His site said he netted about $25k, lived on $7k and had 40x his expenses so $280k - although if he chose to buy a house the figure would likely be different.  Still a bit disingenuous because he is married yet bases his life on only his share (numbers are still extreme though because that implies they lived on $14k) - I tend to believe that if you are married then it is a partnership and the total number is what matters.  MMM is more my way, but there is still a lot to be learned from ERE

Portland Man

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Re: Does Peak Happiness Really Come at $75,000/year?
« Reply #12 on: September 11, 2012, 03:17:06 PM »
One thing to keep in mind with regards to ERE spending, is that when JLF speaks of his $7,000/year expenses, that's expenses for one person.  Per this post: http://earlyretirementextreme.com/early-retirement-extremes-budget.html his yearly household expenses (no kids) were $22,900 in 2007.

The surveyed $75k/year is for a household.  Assuming a 3 person household and $55k take home, living ERE style gets a savings rate of (55-21)/55 = 62%.  According to the shockingly simple math behind early retirement, that's a around 12 years of working, and almost definitely does not include a paid for home, but rather a small rented unit or RV or other extremely cheap living arrangement. 
« Last Edit: September 11, 2012, 03:19:24 PM by Portland Man »

AJ

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Re: Does Peak Happiness Really Come at $75,000/year?
« Reply #13 on: September 11, 2012, 03:44:49 PM »
Here's a more up to date post on his living expenses, implying they live on about $14k: http://earlyretirementextreme.com/frequently-asked-questions

His lifestyle gets you an RV in the most expensive area of the US. If you're going to contend that a 3 person household is thrice as expensive as a singleton (ignoring economies of scale) then we can take his rent ($270) and multiply it by three to get $810. In most places of the country you can rent/buy a reasonable place for $810 a month, and still retire in 12 years according to your math.

Yes, more dependents will slow down your path to FI, plain and simple.

mechanic baird

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Re: Does Peak Happiness Really Come at $75,000/year?
« Reply #14 on: September 11, 2012, 04:50:28 PM »
tooq, I'm guessing you haven't read much ERE.

There are lots of examples on their forums of people living on very little, and being able to ER on small salaries.

You are coming too much from an ER and MMM perspective of lavish spending. Approach it from an ERE perspective.

Your absolutely right - I am not looking at it from an ERE perspective and more the MMM perspective.  I want to have a house, travel, family, all that the MMM way of life.  The majority of people can't won't do the MMM thing and I would wager that most MMM type people won't do the ERE thing. 


I think you hit it right there... I am also looking at it more from MMM perspective, not Jacob's single life style on $7K in a RV. I value FIRE, but I am not going to drag my family to a camp ground and live in a RV to get there..
I think a lot of us MMM readers still want a normal life like MMM has, a nice paid off home, kids, travel, etc..
Like someone mentioned in the semi-FI post, it's not an all or nothing situation. Once you hit semi-FI, you can pretty much dictate what you wanna do with your life. If the job is bad, you would have enough assets to back you up and say, "See ya"!
Everything's got its balance and everybody is different...Living in RV with $7K a year and refusing having kids aint for me..

matchewed

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Re: Does Peak Happiness Really Come at $75,000/year?
« Reply #15 on: September 11, 2012, 04:59:16 PM »
Tooq,

It seems like you're trying to draw lines in the fog here. I get your point that if someone is only willing to cut their budget down to a certain level and no less then their only option is to increase their earnings. But that's where it ends in my mind because everyone's situation is unique. I pull in mid 30k gross and I'm looking at a 10-15 year time frame of hitting FIRE (that'll put me at 41-46). I only really started pushing for this a few years ago. I think anyone can truly hit FIRE and in a quick time. It all depends on how far you're willing to go.

Quote
Anyway the point is that a higher salary matters a lot in ones happiness in general and even more so if FIRE is important.  Managing expenses is very important because it allows you to save more and reduce the size of stash you need to FIRE, but income matters far more as it relates to the time to get there.

But I think the true crux of the FIRE equation is % of savings. Regardless of expenses or income it truly is what percentage of your income are you saving for FIRE. To say that income is more important to FIREing early is only saying one side of the equation. Will it help? Absolutely. But so will reducing expenses.

Jamesqf

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Re: Does Peak Happiness Really Come at $75,000/year?
« Reply #16 on: September 11, 2012, 05:31:56 PM »
I don't really think there's a peak happiness level, at $75K or elsewhere.  Instead, there are a series of plateaus.  Once you reach a certain plateau, financial happiness stays pretty much the same over a wide range of income.  The first is the Micawberian one, where you have even a little bit left over after paying expenses.  For most people, that's probably the $75K one.  Then there is the FI one, at which you have enough of a stash to live on even if you don't work; the life-changing one, where you could do something like (if you were me) buy a large parcel of land in Montana; and the world-changing one, where you can do things like start your own space program. 

In between those plateaus, things don't change much.  I can live comfortably and save a bit on $40K/yr.  $50K or $75K doesn't change much except the amount saved.  Likewise, having about $500K in the stash means I could live without working: changing that to $600K or $700K just means I worry a bit less about market fluctuations.

arebelspy

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Re: Does Peak Happiness Really Come at $75,000/year?
« Reply #17 on: September 11, 2012, 07:06:16 PM »
Right James, but I think tooq's point is that the plateau for a Mustachian might be higher due to the fact that one would want to save for and hit FI ASAP.  So that difference between 40k and 75k which you put as it not changing much except the amount saved actually is a big change, because that amount saved lets you hit FI so much faster, making you happier.

Ideally, however, one's happiness wouldn't be based on FI.  I can't wait for FI, but I don't anticipate being any happier after FI.  I expect to be just as happy as I am now.

Also, I think mechanic baird has totally misread ERE.  It has nothing to do with RV living.  One can have a life like MMM but be ERE.  It's a mindset and lifestyle choice, but it's not a RV and lentils choice.
We are two former teachers who accumulated a bunch of real estate, retired at 29, and now travel the world full time with a kid.
If you want to know more about me, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
We (occasionally) blog at AdventuringAlong.com.
You can also read my forum "Journal."

Portland Man

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Re: Does Peak Happiness Really Come at $75,000/year?
« Reply #18 on: September 11, 2012, 10:47:45 PM »
I think the point of the study is that the law of diminishing returns affects income like most other things.

What I see as the discrepancy is that MMM implies that the point where the line becomes a curve is much lower, and this is true in the short term.  Once you can establish a threshold spending - enough - for you, additional income won't give you much additional happiness now.  But this whole movement - from YMOYL to ERE to MMM - is about establishing "enough" significantly lower than what you earn in order to free yourself from having to sell your time to someone else so that you can have enough.

From that standpoint, I think "enough" for a lot of the posters on this board is somewhere in the $24-36k, depending on housing costs primarily*.  The threshold savings rate seems to be around 50%, so - per this board - the point where the line flattens is somewhere in the $72,000 range - so, Yes, Peak Happiness Really does come at $75,000 a year.  Or thereabouts.

*on the lower end of the spectrum (at least on this board) tends to include a paid for house, which in terms of opportunity costs typically makes up the difference, more or less.  I think $36k is a good and proper "mustachian" threshold for a family.

tooqk4u22

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Re: Does Peak Happiness Really Come at $75,000/year?
« Reply #19 on: September 12, 2012, 08:54:25 AM »
Ideally, however, one's happiness wouldn't be based on FI.  I can't wait for FI, but I don't anticipate being any happier after FI.  I expect to be just as happy as I am now.

Good point, I agree with this.  Having to work vs. wanting to work is really my only dicontentment, the reality is I would probably really like my job if I didn't HAVE to do and knew that if things weren't working I could say see ya later - the FU Fund scenario. Otherwise I don't envision any aspect of my life changing all that much or my happiness level.
I think the point of the study is that the law of diminishing returns affects income like most other things.

What I see as the discrepancy is that MMM implies that the point where the line becomes a curve is much lower, and this is true in the short term.  Once you can establish a threshold spending - enough - for you, additional income won't give you much additional happiness now.  But this whole movement - from YMOYL to ERE to MMM - is about establishing "enough" significantly lower than what you earn in order to free yourself from having to sell your time to someone else so that you can have enough.

From that standpoint, I think "enough" for a lot of the posters on this board is somewhere in the $24-36k, depending on housing costs primarily*.  The threshold savings rate seems to be around 50%, so - per this board - the point where the line flattens is somewhere in the $72,000 range - so, Yes, Peak Happiness Really does come at $75,000 a year.  Or thereabouts.

*on the lower end of the spectrum (at least on this board) tends to include a paid for house, which in terms of opportunity costs typically makes up the difference, more or less.  I think $36k is a good and proper "mustachian" threshold for a family.

Portland - this is what I was getting at. Good approach to go from bottom up in the analysis I think it becomes more clear that way vs. me taking the top down analysis approach.




AJ

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Re: Does Peak Happiness Really Come at $75,000/year?
« Reply #20 on: September 12, 2012, 09:35:32 AM »
From that standpoint, I think "enough" for a lot of the posters on this board is somewhere in the $24-36k, depending on housing costs primarily*. 

This number is interesting to me. People have speculated, and I agree, that the $75k number comes from having just a bit more than most of the folks around you. If the average household income in the US is $50-60k (depending on who you ask), then making $75k ensures that you are just enough ahead of your peers to be smug, but not so far ahead that you can't relate anymore.

I speculate that our $24-36k figure comes from being able to maintain the same appearances as our peers (the $50-60k level), but acquiring it in a more optimal fashion. So, we're still wearing nice cloths, but we bought them second-hand and make them last longer (thru hang drying, which also saves $$). We still heat/cool our houses, but acclimate to a few degrees cooler/warmer and take advantage of passive solar opportunities. We still own newer cars, but we drive them less and bike more (thus making them last longer and saving gas and gym $$).

I'm wondering if we get the same pleasure from living on 50% less than average that most folks get from making 50% more. Just thinking out loud...

arebelspy

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Re: Does Peak Happiness Really Come at $75,000/year?
« Reply #21 on: September 12, 2012, 11:38:00 AM »
I think you're right AJ.

Another big thing helping Mustachians save money is not paying interest - no credit card and car loan interest (and likely less student loans, due to aggressively paying them off, likely less mortgage interest due to not buying a house larger than they need, etc.)

We are two former teachers who accumulated a bunch of real estate, retired at 29, and now travel the world full time with a kid.
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tooqk4u22

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Re: Does Peak Happiness Really Come at $75,000/year?
« Reply #22 on: September 12, 2012, 12:02:54 PM »
I'm wondering if we get the same pleasure from living on 50% less than average that most folks get from making 50% more. Just thinking out loud...

All that you said and Arebelspy add ons plus I would wager that MMM types don't care as much what others think. 

Plus I actually get a bit of pleasure from when people think we are poor/down on our luck while having no clue.   Sometimes these people actually offer clothes and meals and such that I know would never be offered if they thought I had what they have (lifestyle wise that is).  And I assure you it is not because we look homeless or live in a shanty, it is solely because we haven't bought a new car in the last two years, we don't take multiple lavish vacations, or buy crazy expensive stuff - oh and I do all of repairs/renovations around the house myself.  Oh yeah, the biggie was when our family of five downsized from a large 4 bed house to a smaller/all we need 3bed house - I don't have enough fingers and tows to count how many people asked if everything was ok. 

My DW has actually had friends tell her she is deprived.....this type of stuff makes me want to move. 

Jamesqf

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Re: Does Peak Happiness Really Come at $75,000/year?
« Reply #23 on: September 12, 2012, 12:58:56 PM »
I speculate that our $24-36k figure comes from being able to maintain the same appearances as our peers (the $50-60k level), but acquiring it in a more optimal fashion.

I'm not sure about that.  In my case, I've found that it can almost be a perverse sort of pleasure to NOT maintain the same appearances as peers.

igthebold

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Re: Does Peak Happiness Really Come at $75,000/year?
« Reply #24 on: September 12, 2012, 02:26:45 PM »
The original article talked about peak happiness. I've read other articles that made the case that it wasn't so much about happiness. It was about lack of worry.

In this case, the context is what motivates creative employees. Carrot and stick aren't effective. The work itself has to be the motivation. So it's on the company to provide interesting work, empowerment, autonomy, and to get them to the financial point where they don't have to think about money. In the words of the talk linked to below: "Pay people enough to take the issue of money off the table."

In other words, $75K would be the amount you make where you don't have to try hard at all to live within your means. Here in MMM-land, we're all trying very hard to live way below our means. That's the fundamental difference here. We're squarely in selection bias land.

Here's one place I learned about this: https://www.youtube.com/watch?v=u6XAPnuFjJc

Sorry it's a video. There are probably other places that say the same thing in writing.

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Re: Does Peak Happiness Really Come at $75,000/year?
« Reply #25 on: September 12, 2012, 10:00:24 PM »
The original article talked about peak happiness. I've read other articles that made the case that it wasn't so much about happiness. It was about lack of worry.

That's true.  What seems to be left out is that there is only so much money can do for happiness.  For instance, I would be much happier if I were insanely attractive to the opposite sex, or if my sinuses didn't spend a lot of the time being clogged up.  No amount of money is going to do anything to change either of these things*, so there's an upper bound on my happiness that's unaffected by income.

*I'm of course excluding members of the opposite sex who are attracted to money.

igthebold

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Re: Does Peak Happiness Really Come at $75,000/year?
« Reply #26 on: September 13, 2012, 06:33:43 AM »
*I'm of course excluding members of the opposite sex who are attracted to money.

Which, in itself would probably be a negative factor in the happiness equation anyway..

AJ

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Re: Does Peak Happiness Really Come at $75,000/year?
« Reply #27 on: September 13, 2012, 10:49:18 AM »
*I'm of course excluding members of the opposite sex who are attracted to money.

Which, in itself would probably be a negative factor in the happiness equation anyway..

Hey now, women are as wired to be attracted to money as men are wired to desire a certain waist/hip ratio. It's as superficial as it is biological. Netflix has a really interesting documentary on it called The Science of Sex Appeal. Very informative, if off-topic :)

igthebold

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Re: Does Peak Happiness Really Come at $75,000/year?
« Reply #28 on: September 13, 2012, 11:34:21 AM »
*I'm of course excluding members of the opposite sex who are attracted to money.

Which, in itself would probably be a negative factor in the happiness equation anyway..

Hey now, women are as wired to be attracted to money as men are wired to desire a certain waist/hip ratio. It's as superficial as it is biological. Netflix has a really interesting documentary on it called The Science of Sex Appeal. Very informative, if off-topic :)

I suppose the right qualification would be to throw a "merely" in the mix. "Merely" attracted to money, or "merely" attracted to a certain waist-hip ratio. It's a factor, but it's not something that makes for strong, long-lasting relationships on its own. And yes, off topic. ;)

AJ

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Re: Does Peak Happiness Really Come at $75,000/year?
« Reply #29 on: September 13, 2012, 11:56:03 AM »
I suppose the right qualification would be to throw a "merely" in the mix. "Merely" attracted to money, or "merely" attracted to a certain waist-hip ratio. It's a factor, but it's not something that makes for strong, long-lasting relationships on its own. And yes, off topic. ;)

Good point. I'm thinking that the people that are "merely" attracted to money and those who are "merely" attracted to waist/hip ratio sort of deserve each other :)

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Re: Does Peak Happiness Really Come at $75,000/year?
« Reply #30 on: September 13, 2012, 01:37:43 PM »
Hey now, women are as wired to be attracted to money as men are wired to desire a certain waist/hip ratio. It's as superficial as it is biological.

That only proves my point: women are attracted to money, while I just want to be wanted for my body.  So in this case, having more money (or displaying the appearance of having it) could actually result in a decrease in my total happiness.

AJ

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Re: Does Peak Happiness Really Come at $75,000/year?
« Reply #31 on: September 13, 2012, 03:19:47 PM »
That only proves my point: women are attracted to money, while I just want to be wanted for my body.  So in this case, having more money (or displaying the appearance of having it) could actually result in a decrease in my total happiness.

Potentially. However, if I just want to be wanted for my mind, would you say having a nice body is actually a liability? Should I maybe gain some weight to attract a higher quality partner? Something rings false there...

I would say being "objectively attractive" (that is: having money and/or a rockin' body) increases your pool of potential mates. It doesn't necessarily doom you to choosing a poor one. Men who are attracted to my personality and intellect would probably still prefer me to have a nice body (I assume...)

Ooo, ooo...I think I have a way to bring this back on topic: Maybe there is a similar "happiness" curve for attraction? I'm picturing a Demetri Martin style graph where as income increases your likelihood of getting a good mate increases...to a point, after which your high income starts attracting a disproportionate amount of gold-diggers? I wonder if that point is $75k :)

Or, maybe I'm just getting punchy at the end of my work day...

tooqk4u22

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Re: Does Peak Happiness Really Come at $75,000/year?
« Reply #32 on: September 13, 2012, 03:26:36 PM »
My perspective has changed, the stereotype (or not?) about women looking for money to me proves that they are the smarter sex.  Men only get a short term pleasure while women have the option of going for short term pleasure or long term gain/stability/pay day.  Sure men can find stability in marriage and a good relationship is priceless (and all that) but I mean marrying up in the money sense - generally men can't do this.

But in this type of relationship the attractiveness of a woman is highly correlated to the wealth (or apparent wealth) of the man. 

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Re: Does Peak Happiness Really Come at $75,000/year?
« Reply #33 on: September 13, 2012, 11:18:25 PM »
Potentially. However, if I just want to be wanted for my mind, would you say having a nice body is actually a liability? Should I maybe gain some weight to attract a higher quality partner? Something rings false there...

I would say that in a sense it is a liability to have a nice body if you really want to be wanted just for your mind, because you will find it awfully hard (unless you're way better at judging people than I am) to know whether that guy who says he loves your mind is really being honest, or is just telling you what you want to hear.  If you for instance take up a serious exercise program, lose all that excess weight, and suddenly find yourself getting hit on a lot...  Well, it's a pretty good bet that it's not your mind that's attracting them :-)

erejacob

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Re: Does Peak Happiness Really Come at $75,000/year?
« Reply #34 on: September 16, 2012, 01:31:49 PM »
Seeing that I'm being discussed ... it's possible to look up my salaries over the years on the Frequently Asked Questions on my blog. My newest budget (1bdroom in Chicago) is given in one of the updates. I also cover why I calculate per person instead of per family: 1) Basically, I could live on the same amount alone because while I realize some economies of scale by living together I also have some losses from compromising on things I wouldn't buy on my own. 2) DW and I have, like many younger couples, kept our finances separate.

So yeah, all these numbers can be looked up.

On a more general note, I think trying to associate happiness with a certain spending level is a bit of a nonstarter once one gets into nonconsumerist lifestyles. The closer one leans towards ERE (and some people lean even harder than me) the less the connection between spending and doing/having/owning and thus the less the connection between spending and happiness.

An ERE $7000/year lifestyle is not ten times as austere as a $70000/year lifestyle in fact it might look similar. To give an example, over the past couple of years I have developed a certain competence in woodworking. A friend of mine wanted to try, so I had 8 pieces of wood that needed to be made square with a handplane. Having never worked with a plane before, he spent 3 hours planing and planing while really enjoying himself. He probably removed half the wood, which became waste, of that one slat before it finally became square. The day after, I did the other 7 slats in about an hour creating a the same amount of waste wood from the 7 pieces as my friend did.

So while we were equally happy doing the work, I produced 7 times more work in 1/3 of the time creating 1/7 of the waste simply because I have more skill/practice.

Spending money is similar. Some do it efficiently and with skill. Most don't. In fact, it's similar to swimming. See link,
http://earlyretirementextreme.com/how-is-saving-for-extreme-early-retirement-like-learning-to-swim.html
« Last Edit: September 16, 2012, 01:34:43 PM by erejacob »

MooreBonds

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Re: Does Peak Happiness Really Come at $75,000/year?
« Reply #35 on: September 16, 2012, 01:47:02 PM »
An ERE $7000/year lifestyle is not ten times as austere as a $70000/year lifestyle in fact it might look similar. To give an example, over the past couple of years I have developed a certain competence in woodworking. A friend of mine wanted to try, so I had 8 pieces of wood that needed to be made square with a handplane. Having never worked with a plane before, he spent 3 hours planing and planing while really enjoying himself. He probably removed half the wood, which became waste, of that one slat before it finally became square. The day after, I did the other 7 slats in about an hour creating a the same amount of waste wood from the 7 pieces as my friend did.

So while we were equally happy doing the work, I produced 7 times more work in 1/3 of the time creating 1/7 of the waste simply because I have more skill/practice.

While I agree that everyone who retires early must undertake some degree of self-sufficiency, I would then say that perhaps ERE (depending on your exact self-sufficiency level) is not to be equated with being FIRE?

I would venture to guess that most people do not have the natural skill or ability (nor desire) to be self-sufficient to a large degree with a variety of tasks, be it wood-working, sewing clothing, etc.. While some may derive true hobby happiness from such activities, I think it would be safe to say that many who are FIREd would not want to be completely dependent upon their personal skills for that degree of creation, largely because many people simply do not want nor need to develop all of these skills, and as such, budget some funds to be able to purchase the products/services from someone else.

It is true that most who FIRE do have an innate ability to be fiscally prudent (perhaps buying used furniture on Craigslist, or knowing how to shop bargain-basement sales at department stores) - but I would guess most people would be happy just having the skills to buy what they need for the most part, and use the time savings for other ventures and interests, whereas the ERE-types are far more self-sufficient in their lifestyles.

As such, while a $7k/yr lifestyle overall may not be 5x or 10x as austere as a $35k/$70k (or whatever), it forces a higher multiple level of self-sufficiency for a variety of basic and more advanced tasks, rather than having the option of paying someone that being FIREd allows.

Jamesqf

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Re: Does Peak Happiness Really Come at $75,000/year?
« Reply #36 on: September 16, 2012, 01:51:45 PM »
Spending money is similar. Some do it efficiently and with skill. Most don't. In fact, it's similar to swimming.

Interesting, but - to go off on a tangent - what struck me about that link is the picture of swimmers as people just trundling back and forth in their lanes, from one end of the pool to the other.  Some learn to do it more efficiently, and shave seconds & milliseconds off their times, but so what?  At the end of their swim, they're still at one end of the pool or the other, having seen nothing but the lane lines painted on the pool bottom.  How much different if you head out to the lake or the ocean, or even the swimming hole in the local creek...

erejacob

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Re: Does Peak Happiness Really Come at $75,000/year?
« Reply #37 on: September 16, 2012, 02:50:57 PM »
While I agree that everyone who retires early must undertake some degree of self-sufficiency, I would then say that perhaps ERE (depending on your exact self-sufficiency level) is not to be equated with being FIRE?

...

It is true that most who FIRE do have an innate ability to be fiscally prudent (perhaps buying used furniture on Craigslist, or knowing how to shop bargain-basement sales at department stores) - but I would guess most people would be happy just having the skills to buy what they need for the most part, and use the time savings for other ventures and interests, whereas the ERE-types are far more self-sufficient in their lifestyles.

As such, while a $7k/yr lifestyle overall may not be 5x or 10x as austere as a $35k/$70k (or whatever), it forces a higher multiple level of self-sufficiency for a variety of basic and more advanced tasks, rather than having the option of paying someone that being FIREd allows.

I agree.

ERE is more about being widely skilled, resulting in some measure of self-reliance, and idealizes the Renaissance man or "competent person". It doesn't mean replace earned income with homework/steading. Making a solution is often quicker than buying a solution, so ERE doesn't take more time on a day to day basis than consumerism.

Admittedly, learning the skills (which I personally get a kick out of; it makes me happy) does take time. However, consider some random person who spends 3 hours a day watching TV. That's 1000 hours per year that could have been used to develop competency in three skills per year. Over time, the skills add up.

Of course having these productive skills also makes it possible to recognize quality when buying stuff. This results in further savings by avoiding consumer junk. It's one more opportunity to save money.

So, according to my priorities, FIRE is simply a side-effect of ERE when combining the lifestyle with a normal income. If I don't need to buy things, what can I spend the money on? Well, I could invest it and spend it on FIRE. There you go...

There are people who have multiple skills, multiple small sources of income (various jobs, investments, passive websites) , and a great deal of control over their lives as well as economic resilience but who are not FIRE (can't cover their entire expenditure with strictly financial means) because they never had a sustained economy-level (say, $30k/year) salary. I'd still tag those as being more ERE than someone who sold a dotcom company for a million bucks at age 27 and now spends her time traveling.

I suspect that MMM's budget is about as far as one can take it by making savvy choices in terms of where to live (in relation to where one spends most of one's time---usually the job), what to drive (a bicycle and occasionally a car), and where to buy things (e.g. craigslist, ebay, ...). This is about twice as efficient as the average consumer.

ERE's budget is then about as far as one can take it by adding a collection of McGyver/production skills (not that MMM doesn't have some too, he knows how to weld which I don't). This is about four times as efficient as the average consumer.

Beyond this (Pareto law), the actual time effort begins to enter. While it's possible to save money by working more (homesteading), it's not very efficient from a time-perspective. Like it's easier to buy a toaster than make one from scratch. It's still kinda interesting/fun though. What I'm saying is that there are ways of life that make some people happy (although not me, I'm not into homesteading per se) that requires even less money than ERE.

So in my opinion, peak happiness can come at all levels of income when corrected for skills, effort, and lifestyle. Just gotta read the right blogs of the level that one currently aspires to. Guess what I'm reading ;)

Also see Wheaton eco scale.


erejacob

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Re: Does Peak Happiness Really Come at $75,000/year?
« Reply #38 on: September 16, 2012, 03:02:53 PM »
Spending money is similar. Some do it efficiently and with skill. Most don't. In fact, it's similar to swimming.

Interesting, but - to go off on a tangent - what struck me about that link is the picture of swimmers as people just trundling back and forth in their lanes, from one end of the pool to the other.  Some learn to do it more efficiently, and shave seconds & milliseconds off their times, but so what?  At the end of their swim, they're still at one end of the pool or the other, having seen nothing but the lane lines painted on the pool bottom.  How much different if you head out to the lake or the ocean, or even the swimming hole in the local creek...

Going beyond the pool makes for better swimmers. This is why I favor the broadly skilled approach. Skills don't add linearly. Four skills put together result in much more [efficiency] than four skills taken individually.

For example, take our couch. We bought it on craigslist from the local "sofa king". We originally went to look for another one, but then I spotted another one (which looked better) and asks the guy: "How about this one? How much?". "Dunno", he says, "I'll have to call my partner... okay $200 plus delivery." Okay, we'll take it. Then everybody eventually figures out it's a Crate&Barrel couch worth $1500. So far so good. However, it needs a new slip cover. So we look that up. Normally, C&B slip covers are $500. Yikes! Some person was offering nonofficial ones for $350 ... but since DW knows how to sew, she made one instead. The first practice run used old bed sheets (cost $0) but we'll eventually replace them using good material (cost $100). So by combining savvy buying and DIY skills, we have a $1500 couch for $300 ... which can probably be sold for more than that when we tire of it and make our effective cost zero or even negative.

Overall being able to make slip covers significantly improves the value over simply finding a good deal.

Another example. We get a free bed frame from a friend. It does, however, not fit in our bedroom. So I use my woodworking skills (plus an hour of work) to modify the frame and now it fits. Our price $0. Normal consumer price $500. Without the skills, we would have had to pass on it.
« Last Edit: September 16, 2012, 03:06:19 PM by erejacob »

Jamesqf

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Re: Does Peak Happiness Really Come at $75,000/year?
« Reply #39 on: September 16, 2012, 09:26:39 PM »
Overall being able to make slip covers significantly improves the value over simply finding a good deal.

Similar to me and cars.  Because I can (and have, at one time or another) fix just about anything short of major collision damage, I have no problem buying very used cars for not much money.  And I could buy the current hybrid at a time when they were fairly new, and the naysayers were claiming the battery wouldn't last even 100K miles (160K and counting on mine), and other unspecified bad things would happen...  Well, so what?  I can fix it.  And so I've saved about the cost of the car in gas, over the years I've owned it.

Gerard

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Re: Does Peak Happiness Really Come at $75,000/year?
« Reply #40 on: September 02, 2013, 10:16:55 AM »
Well, so what?  I can fix it. 

This is a powerful point, separate from Jacob's point about additive skills/value. It's not just  a matter of doubling the benefit by buying a cheaper thing and fixing it for almost-free, it's being able to buy a cheaper thing free from the fear and anxiety of not knowing what to do with it. The reason so much used stuff is so cheap is not simply its wear and tear, but potential buyers' fear of hidden defects that will be beyond their control.

On another/new angle, peak happiness plateaus can be much lower through collective action and purchasing, not just individual self-sufficiency. The cheapest and most efficient way for me to gain access to woodworking skills is not to develop them myself, but to live near Jacob. Ethically I need to bring something of value to that table, but collective action lets participants benefit from the efficiencies of specialization without paying a premium for it. My happiness-income plateau is lowered by formal and informal arrangements like tool sharing, libraries, food coops, bumming lifts, volunteering, etc... basically by sharing, I guess.
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beltim

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Re: Does Peak Happiness Really Come at $75,000/year?
« Reply #41 on: September 02, 2013, 01:16:06 PM »
It's my understanding that the original FIRE-figurehead, Jacob of ERE, reached FI while he was a postdoc.  Now, I'm not sure exactly where he was postdocing, but this likely means that:

a) he spent 3-7 years as a grad student, earning somewhere between $20-$30k/year (possibly less, but that's the typical range these days).  Definitely less than half of the $75k figure, so even accounting for the fact that he is just one person, he's still below the "peak happiness" figure.
b) he spent the rest of his time as a postdoc, *possibly* earning $75k but quite possibly earning less--postdoc salaries in the mid-$40k range are quite common, in most disciplines a salary of $60k would be considered GREAT, $75-80k means you got a really competitive postdoc or you are in industry.

Somehow he still managed to save 75-80% of his income and reach FI in his early 30s.  I think that pretty much proves that if super-early FI is your goal, it's more about having the right mindset than about making the right salary. It's true that the MMM family earned quite a bit more than $75k/year while they were working, that they've chosen to live in a part of the country where living expenses can very easily be kept low, that they didn't have a load of hardship to deal with and overcome, etc.  The point that they are still incredibly happy while spending significantly less than average still stands (and I took that to be the main point of the post, not the specific $75k number).

You'd be right if Jacob had been in the US, but he was in Switzerland, where the salaries for postdocs and grad students are about twice what you just estimated.

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Re: Does Peak Happiness Really Come at $75,000/year?
« Reply #42 on: September 04, 2013, 11:11:29 AM »

From that standpoint, I think "enough" for a lot of the posters on this board is somewhere in the $24-36k, depending on housing costs primarily*.  The threshold savings rate seems to be around 50%, so - per this board - the point where the line flattens is somewhere in the $72,000 range - so, Yes, Peak Happiness Really does come at $75,000 a year.  Or thereabouts.

*on the lower end of the spectrum (at least on this board) tends to include a paid for house, which in terms of opportunity costs typically makes up the difference, more or less.  I think $36k is a good and proper "mustachian" threshold for a family.

Is there a poll showing this??

I ask because I thought the idea was more of living on, say 50%, of your income vs a set dollar amount?? Maybe I'm totally off here???

Or is it that you think the majority of readers here fall into this income ($75k) and expenses ($36k)??

And I do understand, as Spy pointed out to me on a different post, that living on 50% of a $200k salary is much easier than 50% of a $40k salary.

Thanks!! Sorry to highjack..
"This is the life I chose or rather the life that chose me." - Jay-Z

Albert

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Re: Does Peak Happiness Really Come at $75,000/year?
« Reply #43 on: September 08, 2013, 03:06:23 AM »
I think the key is living on significantly less than you actually have. I feel very comfortable living on about 50% of my salary, but I would be very nervous about my finances if suddenly I was making just 50%.

Snowboard junkie

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Re: Does Peak Happiness Really Come at $75,000/year?
« Reply #44 on: October 22, 2013, 01:34:10 AM »
The number is apparently a moving target and is now 161k/year and a net worth of 1.8 million...

http://www.cnbc.com/id/50027184

Or maybe it's as low as 50k...

http://www.forbes.com/sites/learnvest/2012/04/24/the-salary-that-will-make-you-happy-hint-its-less-than-75000

Or because happiness is not entirely (or even largely) financially based.

http://www.learnvest.com/2011/05/why-the-wealthy-feel-poor-133/

This is a truly difficult question to answer....I'm actually quite surprised relatively few people are weighing in with their opinions.

SwordGuy

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Re: Does Peak Happiness Really Come at $75,000/year?
« Reply #45 on: October 22, 2013, 06:44:44 AM »
Potentially. However, if I just want to be wanted for my mind, would you say having a nice body is actually a liability? Should I maybe gain some weight to attract a higher quality partner? Something rings false there...

I would say that in a sense it is a liability to have a nice body if you really want to be wanted just for your mind, because you will find it awfully hard (unless you're way better at judging people than I am) to know whether that guy who says he loves your mind is really being honest, or is just telling you what you want to hear.  If you for instance take up a serious exercise program, lose all that excess weight, and suddenly find yourself getting hit on a lot...  Well, it's a pretty good bet that it's not your mind that's attracting them :-)

Of course, it could also be your new found sense of purpose, courage, and determination that is attracting them instead of your old couch-surfing self... :)

clarkfan1979

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Re: Does Peak Happiness Really Come at $75,000/year?
« Reply #46 on: September 14, 2014, 06:41:49 PM »
If I am mortgage free, I can't imagine needing more than 50K a year.

Exhale

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Re: Does Peak Happiness Really Come at $75,000/year?
« Reply #47 on: September 17, 2014, 11:07:58 PM »
Ideally, however, one's happiness wouldn't be based on FI.  I can't wait for FI, but I don't anticipate being any happier after FI.  I expect to be just as happy as I am now.

I second arebelspy's comment about happiness now.

FIRE can be achieved on lower incomes. I grew up money poor and always thought there was no way out for folks like us. Then I met folks making my income or less and paying off student loans and achieving FIRE. Important tools include: creativity, flexibility, willingness to defer gratification, finding free/low-cost ways to celebrate rites of passage and enjoying the things in life that are both priceless and free (loved ones, walking/biking, the public library, nature, etc.).

Retire-Canada

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Re: Does Peak Happiness Really Come at $75,000/year?
« Reply #48 on: February 13, 2015, 09:13:40 AM »
I was happy when my savings rate was close to 0%/yr and I made $12K/yr.

I was happy when I made $130K/yr and saved 20%.

I was happy when I took 4 months off to travel and was threatened with the loss of lucrative contract.

I was happy when I came home and went back to work the next day at $130K/yr since I was valuable.

I was happy when my lucrative contract wound down and I made $65K/yr for 2 years.

I was happy when I had to take a short term contract for $40K/yr to tide me over while I looked for a higher paying contract.

I was happy when I got a $75K/yr contract and saved 40%.

I was happy when I picked up extra work and made $100K that year saving over 50%.

I'm sure I'll be happy when I am FI.

Looking back over my life the happy people were happy regardless of money and the unhappy people were miserable despite riches.

I think life is easier at $75K/yr than at $25K/yr, but true happiness has nothing to do with money or how much you earn.

-- Vik

Jon_Snow

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Re: Does Peak Happiness Really Come at $75,000/year?
« Reply #49 on: February 13, 2015, 10:05:03 AM »
In my last 3 years of working my wife and I were grossing around 240k (two 100k incomes, 40k investment income).

In those 3 years I've never been so f*****g depressed and miserable in all my life.