The point of the $3 million article is basically that inflation is real. It's not one of his deeper articles.
That said, I like Financial Samurai. I think many of the posters here don't understand him. I've read his entire corpus and a lot of his articles just take deliberately silly positions to create a discussion. The articles are often laced with sarcasm and humour. It's a much better website if you approach it charitably, which some people seem unable to do. I've noticed the same thing in the way some posters on this forum are unable to read my own posts charitably.
Financial Samurai reminds me a bit of Michael O. Church, whose posted positions are often a bit silly and as a result, he is wildly controverisal and sometimes unpopular. However, the value these writers provide isn't in the merit of their stated positions (which is often lacking, and I would assume this is somewhat intentional), but rather the value is in the interesting and thought-provoking issues that they bring up for discussion.
As for Financial Samurai's stated position on the "income for maximum happiness", which he says is $250,000, the posters above are misunderstanding what he is saying there. Basically, if you read it charitably, he is starting from the following premises:
- Each dollar of increased income leads to a corresponding increase in happiness.
- Earning higher incomes requires doing proportionally more work, or harder work, or more anxiety-inducing work.
- The tax system is extremely progressive.
From these three premises, he draws the conclusion that there exists a point where it doesn't make sense to earn more income, because the more income you are earning, the more work you will be doing, and the harder that work will be, and the more anxiety you will be experiencing, but you won't even be keeping much of the money because of oppressive taxes. He says that the tipping point is $250,000, after which you shouldn't bother to earn more. (However, it's clear this is an arbitrary figure and not derived through math, because in other articles, he says $200,000, or other figures.)
I think his argument is logical -- which is to say, if you charitably fill in the blanks, the conclusion does basically follow from the premises.
As for the soundness of the premises, I think #1 is unassailable because each additional dollar earned contracts the time to retirement (and hence, expedites the trip to freedom). For that reason, most Mustachian should try to earn as much money as possible and will be happier when they do so.
Premise #2 is also basically true. Higher income jobs often require being available at all waking hours, facing tight deadlines, and generally being prepared to make the job your main focus in life. In Financial Samurai's case, he has mentioned that his base salary as a Director was over $500,000 per year, and he apparently doesn't think the level of pay was worth the stress, after factoring in the taxes. Now, it is true that these higher income jobs can involve significant downtime during the day where one can do things like browse the MMM forums, but there's still often an expectation of being available if a need does arise. Obviously there might be some high income jobs that aren't much work, but in general the pay is higher because the jobs are more involved, so I don't think we can complain too much about premise #2.
Premise #3 is probably the weakest in his argument. It's certainly controversial. I personally think taxes in the US are very high and too progressive, but most people on this forum would disagree with that contention, so I won't focus on it here. However, it's at least up for debate that there is a point where the additional work required to earn each dollar is simply not justified by the high level of taxes.
I'm not defending this argument. I am just explaining it for the benefit of the posters above who seem to have completely missed the point. In any case, you should be able to see from my explanation that this argument regarding income and happiness brings various interesting issues to the forefront for discussion. An intelligent reader will similarly read many of Financial Samurai's articles and come away with things to think about. On the other hand, if you react with "$250,000 needed for maximum happiness!? what nonsense!", you aren't going to get anything out of his website.
