"Don't Indulge, Be Happy" - NYT

[igthebold]

More fodder for thought. Not much new here.. just interesting to see happiness != money gaining currency. Or at least being talked about.

http://www.nytimes.com/2012/07/08/opinion/sunday/dont-indulge-be-happy.html?_r=2&hp

[velocistar237]

but the beneficial effects of money tapered off entirely after the $75,000 mark.

This $75K income factoid has been a personal finance media favorite, but the original paper says something a little different.

We find that emotional well-being (measured by questions about emotional experiences yesterday) and life evaluation (measured by Cantril’s Self-Anchoring Scale) have different correlates. Income and education are more closely related to life evaluation, but health, care giving, loneliness, and smoking are relatively stronger predictors of daily emotions. When plotted against log income, life evaluation rises steadily. Emotional well-being also rises with log income, but there is no further progress beyond an annual income of ~$75,000. Low income exacerbates the emotional pain associated with such misfortunes as divorce, ill health, and being alone.We conclude that high income buys life satisfaction but not happiness, and that low income is associated both with low life evaluation and low emotional well-being.

Daily emotions level off at about $75K, and are pretty high well below that, but overall life satisfaction continues to rise with higher income and education. Why do you think bloggers leave out that part?

What implications does this have for us? How might savings rate change this dynamic?

A decade of research has demonstrated that if you insist on spending money on yourself, you should shift from buying stuff (TVs and cars) to experiences (trips and special evenings out).

Even better would be to gain experiences without paying for them.

[kevinhmd]

I'm a pathologist and make much more per year than the quoted $75k, and I have to be honest, I don't feel particularly more proud or accomplished (life evaluation) than any of my lower income peers (and I do have them).

What I DO feel happier about is the fact that despite $100k in student loans (I paid dearly for my education and subsequent income potential), with my income I'll be able to pay that off, pay off my house, and save a nice little nest egg in just a few years (my goal is 4-6 years).

Once I've paid my house off and have a residual investment income of 20-30k per year (depending on my future badassity), it won't bother me at all that I'm no longer making the big bucks.

In fact, for my "life evaluation", I'll rate it much higher once I'm able to spend my day on my own schedule, concerned about my own interests instead of my employers', and even helping others out by volunteering/mentoring with my free time.  I can't wait.

[igthebold]

Daily emotions level off at about $75K, and are pretty high well below that, but overall life satisfaction continues to rise with higher income and education. Why do you think bloggers leave out that part?

Perhaps the distinction between daily happiness and life satisfaction is too subtle to work with at the popular level. After all, we're in an age of sound-bytes and text messaging (how's that for a sound byte?). I find it intriguing that one can be happy on a daily basis without being satisfied with one's life. I guess I'd have to dig into the paper a bit to find out more, but I wonder why it is. Ignorance is bliss?

What implications does this have for us? How might savings rate change this dynamic?

I suspect our culture has so well defined success in terms of money or accomplishment that people aren't satisfied until they've achieved that kind of success. The mass media holds out people whom I wouldn't hold up for my children to imitate as the paragons of accomplishment, so it's no wonder we feel at a pretty low level that success requires making a bunch of money.

So, if we can manage to change the definition of success in favor of savings rate, if we can manage to internalize that, build it into our family or personal culture, then we can gain life satisfaction at $30K a year if we have a savings rate of 50% and rising. The difficult part is internalizing it against the flow of consumerism.

[velocistar237]

The difficult part is internalizing it against the flow of consumerism.

So true. The ERE forums especially are full of posts about people dealing with social pressures related to consumerism, and it's difficult to internalize something so counter to the messages you get every day. That's probably a big reason why MMM has taken off, since with MMM, you don't look so poor.