Why Nobel Prize Winners Were So Wrong About The Ideal Income For Happiness

In 2010, Nobel Prize winners Daniel Kahneman and Angus Deaton from Princeton University argued that $75,000 was the ideal income where happiness increased no further.

As someone who made as little as $4/hour at McDonald's to multiple six figures a year working in investment banking, it was clear to me happiness continued way beyond the $75,000 threshold.

In response to the Nobel Prize laureates' claims, in September 2010 I wrote The Ideal Income For Maximum Happiness. My article argued that $200,000 per person was more appropriate. Several years later, the figure was updated to $250,000.

Why $200,000+ Was The More Appropriate Income

Back in 2010, I was coming off a down compensation year due to the global financial crisis. However, I clearly remember once my income surpassed $200,000 I felt happier because I had more breathing room. I could save more money for retirement, afford a nicer place to live, and not worry as much about parking tickets!

But after surpassing $200,000, I started to feel the impact of higher taxes, partially due to the Alternative Minimum Tax (AMT). Further, with an income above $200,000, you were deemed by society to have entered the “evil rich class,” the income level at which Obama wanted to raise the marginal federal income tax rate.

The Occupy Wall Street Movement was in full swing and “sh*t was f*cked up and bullsh*t” as the saying went. Hence, you also didn't feel good about earning much more than $200,000.

In 2010, I was working more and getting paid less due to the economic meltdown. People like me were also being vilified for causing the housing crisis even though I worked in international equities. The idea of paying more taxes once you earned above $200,000 wasn't appealing.

With $200,000 per individual or $250,000 for a family of up to four, you could live a comfortable life without anybody bothering you. To me, that's happiness!

The Ideal Income For Maximum Happiness Goes Up

Then in 2014, I noticed a fascinating Gallop poll from 2013 that highlighted that 100% of the participants who made more than $500,000 were happy! It seemed unbelievable, but see the chart yourself.

I had never seen a study where there was 100% agreement or efficacy. Therefore, I thought this fascinating piece of data would surely change the minds of Daniel Kahneman, Angus Deaton, and everybody in this field who believed in their $75,000 hypothesis.

It surely helped convince me that earning $200,000 a year per person may be too low. As a result, in August 2014, I decided to write a follow-up post entitled, The Secret To Ultimate Happiness Revealed: Make $500,000+.

The post was well-received. But it didn't spread like wildfire like my post on scraping by on $500,000 did. Based on the hundreds of comments in the latter post, it seemed like people prefer raging against those who make a top 1% income rather than accept the possibility $500,000 was the ideal income number for happiness.

Due to the desire for harmony, in 2014, I only updated my ideal income for maximum happiness by $50,000 to $250,000 to account for inflation. I also discussed needing less living in a lower-cost area of the country.

But here's the truth. I thought $500,000 was a more realistic ideal income figure based on my own experience living in an expensive coastal city. Once you get to $500,000, you feel like you're finally really getting ahead financially, especially if you don't have kids.

Alas, I haven't dared to voice this belief until now.

A Nobel Prize Winner Finally Changes His Mind About The Ideal Income

13 years after postulating the $75,000 figure, Daniel Kahneman along with new partner, Matthew Killingsworth from UPenn has now published a new study. Their study claims that happiness rises as income does. Not a surprise.

What is a surprise, however, is that their study found an increase in earnings up to $500,000 boosted happiness for most people. The researchers tracked data gathered from more than 33,000 U.S. adults who earned at least $10,000 a year. Participants used a smartphone app that asked about their mood at random intervals during the day.

“The exception is people who are financially well-off but unhappy,” Killingsworth explained. About 20% of people are part of this “unhappy minority,” the researchers found. For that group, additional income over $100,000 per year didn’t appear to make a major impact on their mood.

In other words, if you're rich and miserable, more money won't help. And as I've mentioned many times before, I know plenty of very rich people who seem no happier than a person making a middle-class income of $75,000 – $125,000 a year.

Why Did It Take 13 Years To Change Their Minds?

A good scientist is one who changes their mind when new data presents itself. Although there was a poll in 2013 by Stevenson and Wolfers that showed increased happiness up to $500,000. I guess to the Nobel laureate, their data wasn't good enough.

I've shot Professor Kahneman an e-mail asking why he made such a huge revision from $75,000 to $500,000, but he didn't respond. So let's hypothesize why he had to change his beliefs:

1) The Need To Account For Inflation

Staying at $75,000 thirteen years later in 2023 is clearly too low thanks to inflation. If we assume a three percent average inflation rate for 13 years, $75,000 turns into $110,000. Therefore, Kahneman and his colleague had to raise the income level.

After all, the median household income in America is about $75,000 in 2023. Some households only have one person. And clearly, not every single-person household feels they've reached maximum happiness.

But that still leaves $390,000 of income unaccounted for. What gives?

Inflation chart by category

2) Anchoring To A Professor's Salary

One of the reasons why I hypothesize Kahneman and Deaton thought $75,000 was the ideal income for maximum happiness in 2010 was because $75,000 was the median professor salary back then.

No matter how much we think we are fair, we always have biases. Our biases are why everybody in our circle tends to look alike, talk alike, and come from the same socioeconomic backgrounds.

Being a professor is considered a prestigious job. Therefore, Kahneman and Deaton could have anchored to their salaries and felt like life can't get much better. After all, they have the prestige, status, respect, and money.

As Kahneman and Deaton started making more money after winning the Nobel Prize and writing new research, their happiness grew. They could experience firsthand what it was like to earn much more money. By 2022, it is my belief Kahneman and his new partner experienced what it was like to make $500,000, hence, the income increase.

Today, professors like the Bankman-Frieds from Stanford University can make way more money than $500,000 a year given they purchased a $15 million vacation property in the Bahamas! I'm assuming the professors honestly made the money, because throwing away their reputations after a lifetime of contribution would be irrational.

Professors can buy multi-million dollar mansions
Professors Bankman-Fried's vacation property in the Bahamas. Not bad for being a professor.

3) Pressure From Other Academics And Financial Experts

Finally, I suspect Kahneman and his Nobel laureate colleagues raised their $75,000 ideal income threshold due to pressure from others in their field. Their work was so widely cited that many academics and experts in the finance field took notice.

As the pushback against such a low ideal income figure grew, Kahneman and his colleagues had to rethink their analysis. Otherwise, they would seem completely out of touch with reality.

For one, there are huge cost of living differences in America. To make a blanket statement that $75,000 was the ideal income when the median home price in some cities is over $1 million would be absurd.

Second, they have reputations to protect. Just like rigidly following the 4% Rule from the 1990s might not make sense 40 years later, so does sticking with an outdated datapoint as the world changes.

It makes much more sense if such professors came up with a dynamic ideal income figure that changes based on inflation or a cost-of-living index. A dynamic safe withdrawal rate in retirement is what I believe in given the world is always changing.

4) Elitism And Reverse Ageism Perhaps

Stevenson and Wolfers, the professors who published in 2013 that happiness continued to increase when income went above $500,000, are from the University of Michigan. Although Michigan is a great university, perhaps Kahneman and Deaton from private Princeton University looked down on public Michigan University.

Maybe Kahneman and Deaton also thought Stevenson and Wolfers were too young and inexperienced as well. How dare they challenge their $75,000 assumption! Kahneman and Deaton are in their late 80s today, while Stevenson and Wolfers were under 45 when they published their findings in 2013.

If there's one industry where people care most about prestige and status, it's in academia. Good ‘ol snobbery could be involved!

5) Pressure From The Government To Lower The Income Number

In 2010, there was huge social unrest as millions of people lost their jobs and their homes. In fact, according to the Census Bureau, the real median household income actually fell by 2.2% from 2009 to 2010 to $50,046.

Universities and the government collaborate all the time. After all, the government is a huge source of funding for university research.

Coming up with a $75,000 ideal income for maximum happiness is clearly more achievable for the average American than earning multiple six figures. As a result, the government could have pressured Kahneman and Deaton to lower the true ideal income figure to help calm the public. An easy way to find out is to investigate their funding sources.

By lowering financial standards, it's easier to feel better about your financial situation. And the better you feel, the less likely you will revolt!

It's Hard To Be Completely Honest About Money And Happiness

Although I've tried my best to be honest with you about money and happiness, I still find it hard to do. The amount of judgment you receive about supporting higher income levels or wanting to make more money can be harsh.

Read some of the comments in the following posts to see for yourself. Despite using hard numbers and math to come up with my arguments, there's still a lot of backlash. As a result, it's often better to keep mum about such things.

However, now that Nobel Prize laureate Kahneman has raised his ideal income for maximum happiness to $500,000, I feel better saying so as well. If anybody wants to bash me for this belief, I can now just refer to Kahneman and Killingsworth's new study.

Free at last! Free at last.

Why $500,000 Is An Income Worth Shooting For

You don't have to make $500,000 a year to be happy. But if you're curious about experiencing the greatest amount of happiness you can, you might as well try making $500,000 for one year and see what happens.

If you do, you may feel happier because:

  • You're making more than 99% of people in the world
  • After maxing out your 401(k) or 403(b), you should have tremendous savings left over to build your taxable portfolio and rental property portfolio
  • You can fly Economy Plus or even First Class on occasion without feeling much pain
  • You can easily give $10,000 – $25,000 a year to charity without much constraint
  • You can afford to buy a $1.5 – $2.5 million house according to my 30/30/3 home-buying guide
  • You can save for your children's college education by contributing the maximum gift tax limit to their 529 plans each year
  • You have the option of retiring in 10 years or less if you dramatically cut down your expenses
  • There's less stress about getting into financial trouble
  • Once you get really rich, you gain all sorts of extra benefits, like a 2.2X greater chance of your kid gaining admission to an elite college

The main reasons why you might not be happier making $500,000 a year are:

Different Ideal Income Amounts For Everyone

Not only are there dramatic cost of living differences in America, there are also tremendous differences in individual desires. As a result, there's really no one ideal income figure that fits all.

My recommendation is to try and make $75,000, $200,000, $300,000, $400,000 and then $500,000 a year. At every income level, assess how happy you are on a scale of 1-10.

If your happiness is declining despite making more, then you may have to adjust your work and/or lifestyle accordingly.

What is the ideal income where happiness no longer increases?

View Results

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Income Composition Also Matters For Happiness

Personally, I live in expensive San Francisco with two kids. I'm happy to stay so long as I can earn enough.

As a result, my goal is to earn $400,000 a year in passive investment income to feel 100% financial secure. If and when I go back to work, then I could strive to earn up to $100,000 to hit the “magical” $500,000 total income mark.

The $100,000 or less day job would be fun, instead of stressful. Meanwhile, having a good mix of active income and passive income is ideal because it means you're diversified and doing something you enjoy.

We all want to do purposeful work. Purpose is what creates happiness, not the other way around. As a result, we all should make some active income.

At the same time, we all want to earn enough passive income to take care of our basic living expenses. Once we have that safety net, earning income from purposeful work feels like you're constantly winning the lottery.

Don't Have to Make $500,000 To Be Happy

If you don't want to make $500,000 or can't, no problem. There are plenty of ways to feel happier without needing a half-a-million-dollar salary.

Moving to a lower cost area of the country or world is one solution. Not wanting the best of everything is another idea. Living a minimalist lifestyle keeps things light. Another solution is ensuring you are surrounded by friends and family.

Once you earn enough to cover your basic needs, perhaps what's most important for happiness is having a positive state of mind.

If you can constantly express gratitude for the things that you have, I dare say you will be one of the happiest people in the world!

Reader Questions And Suggestions

Why do you think Kahneman dramatically raised his ideal income for maximum happiness to $500,000 from $75,000? Why do you think Kahneman and Deaton were so wrong in 2010 when they came out with their $75,000 figure? What do you think is the ideal income for maximum happiness?

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52 thoughts on “Why Nobel Prize Winners Were So Wrong About The Ideal Income For Happiness”

  1. In the actual research (link included at the top of this blog post), in the Discussion session it states:
    “When interpreting our findings, it is essential to distinguish changes from differences. Our data speak only to differences; they do not imply that people will not be happy with a raise from $100,000 to $150,000, or that they will be indifferent to an equivalent drop in income. Changes of income in the high range certainly have emotional consequences. What the data suggest is that above a certain level of stable income, individuals’ emotional well-being is constrained by other factors in their temperament and life circumstances.”

    Happiness, emotional well-being and life satisfaction are all treated as different variables in this research.

    Once the general media get ahold of this sort of research and report on it, nuance is often diluted out of the coverage and lost, resulting in misinterpretation. “Maximum” versus “increasing”, for instance, mean very different things in terms of data interpretation, yet have gotten conflated in the news media coverage of this topic.

    1. True. And researchers need to be consistent with her inputs, outputs, and variables.

      The more complicated the message, the weaker the message. But strategically, as a researcher, do you want to make the message as complicated as possible so you have outs and can adjust.

  2. Working scientist

    If you or your readers really want to know why Kahneman changed his mind, you can read what he wrote here:


    There are some interesting findings, one of which is that “happiness increases steadily with log(income) among happier people, and even accelerates in the happiest group.”
    It’s a nice example of science in action.

    1. Thanks for sharing.

      “happiness increases steadily with log(income) among happier people, and even accelerates in the happiest group.” – I think most people will find this to be an obvious statement.

      It’s just the difference going from $75K to $500K is so huge, the professors might as well have been guessing.

  3. Tadashi Allen

    I would encourage you to read Kahneman’s book Thinking Fast and Slow. He covers happiness in a later chapter, and his description there is worth rereading to understand why his conclusions make perfect sense. Dont do the audiobook, read the book, carefully. In this one area, sure, 75k can be contested by personal experience and is situational, yet its clear from the data he had at his disposal (Gallup poll of 1000 survey participants in 2008) why he arrived at that conclusion; his source data was someone else’s survey results, and his analysis appeared sound based on that data. Eliminating bias in surveys is not straight forward and avoiding a skewed cohort was outside of his control. The survey would have to be adjusted for age, race, national origin, primary language, gender, geography, health status, occupation, marital status, physical attractiveness, body mass index, physical height, personality or mental disorders if any, substance abuse, education and baseline wealth outside of income as well as sample size can affect these results among others. Measuring happiness with a survey during a pandemic, or say, among those in war torn parts of eastern Europe would surely differ than what would be expected in a survey of highly educated Bay area conservatives that love the WSJ. Also, Kahneman indicated he mistakenly interchanged the absence of misery as a surrogate to presence of happiness. His work is a foundational discipline, like physics, and not an applied one like business or engineering. He has scientifically proven so many concepts we all take for granted and that professionals of all sorts apply his concepts and dont even know it. I think its fascinating that having a headache could have the equivalent effect on happiness as a 10 fold increase in income from $25k/year to making $250k/year.

    1. Isn’t it interesting though that despite a 2013 follow up survey that showed $500,000, he and Deaton didn’t budge until 2023?

      Thinking fast and slow is a good book.

      1. A few minor corrections:

        1. He did not revise it to 500k. The new study actually did not find a limit. 500k is simply the highest figure they had enough samples for to reach a statistically significant result. Based on the data in the research, it wouldn’t be surprising if happiness continues to increase- at the same rate – as income increases to 1m and above.

        2. The gallop poll data you reference is far from enough… he couldn’t correct various biases and that is not what “changed his mind”. His co author for this latest research paper is someone that produced a new data set for a 2021 paper that concluded the income to happiness relationship remains constant and possibly never plateuing.

        3. You noted the 20% sad cohort, but please note that a part of their new findings was thr existence of multiple cohorts. In other words, not only was the plateuing limited to the “saddest” cohort, but it actually turns out that for the happiest cohort- happiness growth *accelerates* relative to income growth. For thr happy cohort – he effect of making 500k instead of 250k may actually have a greater positive effect on happiness than going from 125k to 250k (as previously hypothesized)

    2. Memento mori

      Any argument about happiness without defining what is meant by it is an exercise in futility.
      I also contend that defining happiness is an exercise in absurdity, because that which you think makes you happy can immediately make you miserable.
      And those who think they found happiness inside, they must be monks living in some remote monastery with no kids or family because one must explain how is possible to find happiness inside if your loved one is suffering?

  4. Sam…

    Your happiness with regard to money will start to taper off at between the median and average income. That is the income meticulously studied and derived in the study.

    Once you have achieved that level of income, mentally, you will demand for the FREEDOM from the world around you to pursue the passion that you are genetically wired to pursue.

    FREEDOM from the world around you…
    1. The company: the supervisor, the boss
    2. The family: the Mother, the Father, the siblings, the Spouse and the Children

    Now, you have to be very careful with the relentless in the pursuit of happiness. For 99 percent of the population, it will lead to a very lonely road.
    Good luck Sam!

    1. You would think so. Yet, Kahneman now argues $500,000 is the magical income figure in 2023 where happiness no longer increases. Top 1% income for the win! Go figure.

      But yes, freedom is a huge component of happiness. It’s been nice to be free since 2012.

  5. That is such a huge jump in income from their first study. I think the various points in your hypothesis make a lot of sense. $75 was too low but something they were familiar with at the time, there was govt and societal pressures during the difficult economic times, and then later pressures to raise it. I think money does increase happiness but not just by itself. If you have intense work stress, family problems, health issues, etc money can help but it won’t magically solve your problems. Attitude and being appreciative are important factors too.

  6. I think that happiness and money are related but much less so than any such search for a figure might indicate. To me, financial security more related to happiness, though again this relationship is quite imperfect. Some of the most “happiness” that I believe occurs is having a purpose and reaching or fully engaged in that purpose. Much like gratitude is an attitude, happiness is a choice, and not attributable to money.

    1. The goal is to find the minimum income level where happiness no longer increases. Yes, happiness is subjective, but we’re trying to find the objective income figure.

      So the income figure has to be enough to provide for all basic family needs plus some for entertainment and saving for the future.

      An unknown and uncertain future brings anxiety and worry.

      Hence, I do believe the income figure is at least $150,000 for lower-cost areas, and $250,000 for higher-cost areas.

  7. It’s pretty amazing how big do professors blindspots are. Raising the income figure by 6 1/2 times is massive and shows that you don’t need a PhD or be a professor from an elite college to be smart or reasonable.

    What use is status in prestige if you are so off the mark?

    For me, about $120,000 per person is good enough. I live in a middle-size city.

    1. Yes, if they had adjusted the figure from $75,000 to $150,000 or even $200,000 thirteen years later, it would seem more reasonable.

      But going from $75,000 to $500,000 essentially means they’ve been wrong for 13 years.

      So you see folks, you don’t need an elite private education to be right.

  8. I think the real question is how “happiness” was defined in the studies. I have literally gone from poor (earning $4.25 per hour) to now (earning more than $1M per year) in a 30-year span. My happiest moments in life were not really tied to finances. In fact, some of my happiest years were when I was young and poor but had the freedom to travel (backpacking) and enjoy meeting people from around the world and all the beautiful girls I met along the way. What money brought me as my earnings went up was security and the ability to travel more comfortably but I would not say that made me directly “happy”. Happiness comes from within and unfortunately, most people have a hard time with it. Peace of mind and security do come with Money, which might help some people be “happier” if their concept of happiness means not worrying about money and buying things.

    1. George Goetz

      I agree. I’ve found that money has brought me more security, with less worry. This in turn gives me more time to appreciate my life and how lucky I’ve been. So in that way the money has made me happier. But I’ve always felt fortunate, and grateful for it, on the inside. I believe that peace, contentment, and satisfaction comes easier to those who recognize their own good fortune.

        1. The income level where I felt secure and no longer worried about money was when I started to make more than 200K, but this was early 2000’s. So in today’s dollars, it would probably be around 300-350K.

    2. May I ask how difficult is it for you to make $1+ million a year?

      I do agree about how a survey or how we define happiness is part of the equation.

      It would be good to pinpoint what that ideal income figure is for each and why.

      1. I have been very fortunate to have developed an e-commerce business where I have been able to scale while keeping strong profit margins. I have automated processes as much as possible and I only have a handful of part-time employees that help me tremendously. In all, I work probably 10 hours a week (mostly from Starbucks) so I wouldn’t say I work very hard. As far as difficulty, I think now that everything is close to automated it’s not difficult at all. What was difficult was starting the business (finding the right product) and then scaling.

  9. Well, I would argue that, in 2010, they were mostly right about their 75K figure for the majority of Americans. If you consider that the majority of the country’s population lives outside of uber-expensive cities, then you could see how 75K in a place like Lawton, Oklahoma or Tupelo, Mississippi in 2010 would go a very long way.

    Of course, in 2023, the world has completely changed. But one thing that hasn’t changed is this….the majority of Americans STILL live outside of uber-expensive cities. 150K in Salina, Kansas is nearly 500K in Manhattan, NY.(according to cost of living calculators).

    I make 200k in the Southeast and I own (no car notes. OWN) two luxury vehicles with free parking everywhere I go and a 3000 sqft home that sits on 0.62 acres. How much would that cost me in San Francisco?

    Whether they are right or wrong depends on what world you live in. And in the vastness of the USA, there are multiple worlds within this country.


    If I made 500k where I live, I could live in a 7,500 sqft palace within a gated community with 24/7 security and staff for housekeeping and lawn maintenance. (I’m not kidding).

    1. I completely disagree. You’re saying that Americans are the happiest people in the world, if they could only make $20,000 more dollars a year. In 2010, half the American population couldn’t even afford a home if they only made $75,000 a year.

      America is consistently right outside the top 30 happiest countries in the world every year for the past 10 years.

      1. I beg to differ, Kind Sir. I would never say that Americans are the happiest people in the world. All I was saying is that the NATIONAL median house price today is around 428K. The national median house price in 2010 was ~222K; easily affordable for a household income of 75K. Affording a home usually makes most people happy in this country.
        As for the country being outside the top 30 hapiest countries; I definitely can see that. But that statistic has nothing to do with household income (in my opinion). That has more to do with: skyrocket healthcare costs, social & political divisions, insane gun laws, crime, etc.., (I bet the top 30 happiest countries don’t struggle with the issues that I just listed).

    2. Isn’t it funny though that Kahneman now believes $500,000 is closer to the maximum income figure though?

      I would think $200-$250K in the SouthEast is equivalent to $500K on the coasts.

      1. Yes. Funny indeed! Now Kahneman is saying that, in order to be happy, everyone has to be in the top 1%? Based on that “Ivy League” thinking, 99% of the country will never be happy.

        Here comes the revolution!

    3. income 500k / 2 taxes =250k after taxes

      1990 we made more than president of USA and payed 100k in taxes.

      1994 we made some changes.

  10. Hello FS – I started with 75K 17yrs ago as an immigrant from the Philippines. Worked in the IT and still still working in the IT. I have enjoyed your post for a long time and bought your book early this year!

    Now I have been using this as a point of reference for my net worth allocation ( conventional). Your numbers are way too close to mine numbers (I’m just a little bit above your total net worth) With 18 yrs of working / 45 years old.

    I am using this as a guide post as I try to invest in my 3rd real estate property! Yes, I’m trying to build my confidence in investing while holding my regular day job, and as a mother of 2 kids ( teenager and a preschooler) I just want to congratulate you on your book and looking forward to learning more from you on your future books!

    All the best!

    1. Hi Emma, thanks you for supporting my book! It means a lot to me. If you could leave a review on Amazon when you’re done, I’d appreciate it.

      Sounds like you’ve had a great journey these past 18 years! And to be blessed with another little one is priceless. Truly. I wish I had many more little ones. Alas, we started too late.

      I do think sometime this year is a good time to try to get a deal in real estate. There’s not as much supply, so you’ll have to be patient. But deals will be available.

      All the best! It’s stories like yours that keep me going and also keep me balanced in my writing.

      Fight on!


  11. Does anyone else not find it coincidental that the categories increasing the most (outside of food) are all the industries with the most government intervention?

    1. Farming is heavily regulated and is subsidized. Some of that is for good reason, but no, I’m not surprised.

  12. Two parts to an economy, supply and demand. You spend a lot of energy on the supply side but not nearly enough on the demand side. Also you equate happiness with “enough money to no longer feel impinged upon, stressed, etc”. Now I know that living in different areas of the US and globe will wildly skew that number, but ultimate happiness is not borne out of the acquisition or arrangement of forms or even energy (which money is / represents).

    Money mainly buys one comfort and invulnerability, et. al. Now freedom from stress of worrying about money is a big one (and one in which I’m gratefully sitting in) and is fantastic, but real happiness is a spiritual characteristic, transcending mind and any emotion (including emotional happiness). By recognizing and abiding in the unqualified of ourselves then a transpersonal happiness and joy becomes the basis of life, and cannot be strived for like the way we make money. It is something from another planet than income production or asset accumulation.

    1. “but real happiness is a spiritual characteristic, transcending mind and any emotion (including emotional happiness)”

      I can agree with that. Any tips on how to get to this state?

  13. Yeah I think it completely depends on two main factors: 1) # of Dependents and 2) Area that you live. I would first adjust to number of Dependents (children/significant others), and then use the number of dependents to adjust/multiply the costs of living (median home price, average gas/food prices, taxes) based upon location/state. For example a family of 4 living in California might need to make at least $350k to start feeling very comfortable/’rich’, versus same family living in Texas might need to make around $200k.

    Sam, you make some great graphs and tables, could you maybe do an analyses of these per state and based on # of dependents? 0-1-2? Would be very interesting to see..

    1. I agree with both points. Kind of like how the government has the Federal Poverty Limit table by household size.

      In the poll, I just highlighted income per income earner. Will consider. On break this week.

  14. Nice picture of you in Fortune magazine. Where was that taken?
    One of my favorite lines which applies to your article on money/happiness: Latrell Sprewell complaining of being offered only $21 million over 3 years-“I have a family to feed!”

  15. I agree about one of the government’s main goals is to keep the masses content. By working with university professors and research organizations to come up with these studies, it helps LOWER the bar and make more people happy with what they earn.

    If the professors came out in 2010 and said $500,000 was the ideal income for maximum happiness, I think there would be a revolution!

    1. Yes, those who were there know 2010 was a scary time. Similar to March 2020, but constant from 2008 through 2010.

      Governments do not want revolts, otherwise, politicians will lose power and many people will get injured and die.

      Happiness is about setting proper expectations and coming close or beating them!

  16. Putting one number on this without accounting for differences in cost of living or other situational factors is just silly. $75k in San Francisco is very different from $75k in rural Iowa, so how could one such number possibly be an accurate reflection of reality. Moreover, I would suggest that whether you are looking to buy a house or not makes a huge difference. If you already have an adequate place to live and the mortgage is manageable you’ll need much less than if you’re trying to purchase in a market like the SF Bay Area where even tear-downs with small lots can cost $3M+ and you’ll end up with a monthly property tax bill reflecting the price.

    1. I think they said it’s coming in the mail. But I’m not holding my breath. Don’t think the Committee would vote for an Asian or Hawaiian person if you look at previous winners.

      Just gotta keep fighting and stay practical living in the real world!

  17. I really do think bias was the reason why Kahneman and Deaton took so long to update their $75,000 figure to $500,000. 13 years is an eternity!

    They are two old white men who’ve sat at the top of one of the most prestigious private universities in the world. Their world was gospel and people treated them as all-knowing. It’s hard not to think you know everything when you receive the Nobel Prize! Understandable and no problem being who they are.

    But the longer you’re out of the real world that’s full of harsh realities, job instability, battles, and more, the more you lose sight of reality.

    It takes generations to die off to see change, not that I want to see people die. Great article.

    I think $250,000 per person is great, even in the most expensive cities.

        1. Maybe she should have clarified. “old white men with power, prestige, and lots of money”? That might narrow it down a bit.

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