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Comment by tonyedgecombe | Hacker News Reader

Once you get above 2 million it doesn't matter (2 million is enough to shed 70K per year which is widely thought to be the threshold where more money doesn't improve wellbeing).

If money is the motivator after that then you are in a race you can't win.

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AFAIK there are many cities where 70K per year is well below comfortable (even if your definition of comfort doesn't imply luxury yachts or cocaine).

Yesterday I have been told $80K is the actual median income but $200K is minimum comfortable in SF (never been to there, can't confirm).

Once you're a millionaire, I'm assuming you have purchased and paid off a home. With that in mind, if $70K/year is still well below comfortable, then I would argue their spending habits are questionable.

Maybe? I live in Seattle. My paid-off home costs $13,000/year in property taxes alone.

Where I live (Sydney Australia) after purchasing an average home [1] you would have less than a million left out of those two millions, so according to grandparent's calculation [2] you would have less than 35k/year left, to sustain yourself. That's above the poverty line which is around 24k/year [3], but well below the median salary which is around 50k/year [4].

[1] https://www.smh.com.au/business/the-economy/sydney-s-median-...

[2] https://news.ycombinator.com/item?id=25580987

[3] https://apo.org.au/node/276246

[4] https://www.facs.nsw.gov.au/providers/housing/affordable/man...

that 'median salary' is likely having to support housing/rent which the hypothetical person in this scenario wouldn't have to account for. might not be 35k after housing, but might be (or housing/taxes).

After rent and taxes I have around 30k, due to my temporarily reduced salary (due to Covid). If it wasn’t for my wife’s help, we wouldn’t make it to the end of the fortnight. We have a teenage daughter. If this was my salary level indefinitely, it would not be sustainable in the long term because we wouldn’t be able to afford any extra spending e.g. buying a new car. We live in an expensive part of Sydney so moving to a different area would result in some savings and we would almost (but not quite) have as much as my pre-covid disposable income which was more than OK for us. Moving would not be painless though, e.g. my daughter would have to go to a new school and lose touch with her friends which isn’t easy for a teenager.

I guess what I’m trying to say is - coming back to the original comment that started this thread - in some expensive cities, 2M doesn’t really change your life much (at least, not to the extent that you can think “I’m rich now I don’t have to worry about money ever again”). Personally I’m thinking about moving to a less expensive area, now that remote work has become even more common.

Important note: all my reasoning is in AUD but probably OP meant USD 2M. That would be about AUD 2.6M. So, more than 2M but not by an order of magnitude.

I think it's also enough to live comfortably in many other cities in almost any country of your choice - Berlin, for example, is well within reach.

You can of course insist on living in an expensive place, but maybe it's worth trading in some choice in location for more freedom in how you spend your time?

I was taking it to mean 70k a year to burn, with all of the "normal people" bills like mortgages and car payments.

>AFAIK there are many cities where 70K per year is well below comfortable

Thanfully it's not mandatory to live in those cities...

They're not even the best cities to live, considering international rankings...

International rankings are nonsense. They're not interesting cities - they're not places people want to live.

>They're not interesting cities - they're not places people want to live.

If people are teenagers or starry eyed 20-somethings dreaming of making it big in LA, NY, or SV, yes.

If people are 30 and above, they are very much interesting and places people want to live...

What the 70k figure tells us, is that such an income (adjusting for local conditions) is roughly the inflection point of diminishing returns for basic needs in Maslow's hierarchy.

It isn't so much that people are overall satisfied at 70k, but that people with more are _no less_ satisfied. It is a plateau. Many will still want more and may be unhappy. At that point happiness must be sought by other means (love, community, esteem, self-actualization), which might indeed involve the application of money, but it requires doing something worthwhile (from the perspective of that individual). Something money enables, such as a bigger house isn't enough (by itself).

It isn't that money above 70k doesn't improve wellbeing, but that isn't sufficient by itself to do so.

A million or two allows you to live without working for your money. Five or ten million allow you to have people do anything you don't like doing yourself for you. But beyond that I don't really know what to do with money.

You can invest and influence the world above 10 mil.

Wow, y'all don't have much imagination. I mean, if money were no object, I could easily want a nice little place by the beach. I'm not talking some giant mansion with loads of servants, just a nice place, let's say 2000 sq ft. Ah, here's a 3 bed/3 bath condo of 1887 sq feet on the beach ... for $4.9 million: https://www.redfin.com/CA/Malibu/26170-Pacific-Coast-Hwy-902....

Obviously there are much cheaper places to live than Malibu, but again, if I had the money I wouldn't mind living there.

All depends on the life you want.

You can go live on an island in Greece, or Eastern Europe, or Columbia - and 70K in those places will GO FAR:

Housing: Check Nightlife: Check Can't speak for the men, but good looking women: Check Cost of food: Check.

All depends where you want to live and lifestyle you want.

> You can go live on an island in Greece, or Eastern Europe, or Columbia

I think you meant Colombia :)

Nope, Columbia :)

That 70k figure sounds arbitrary and very, very low. It is not even a living wage in many western cities.

What cities are you living in?! £70k GBP is an insane salary, $70k USD equates to £52k, which is also _well_ above the UK average salary. Same applies to EU cities too.

Also, if you are curious, I believe this is the study people frequently cite: https://www.princeton.edu/~deaton/downloads/deaton_kahneman_...

IIRC from my cost of living calculations early this year, 52k GBP is barely enough for a couple with a small child to survive in London.

Yes but that's three persons. Unless it was assumed that the typical profile here is a pater familias with a housewife.

Perhaps not typical, but quite nice if you can pull it off. I actually refused an offer to move to London (despite initial excitement) for a salary slightly larger than mentioned above, because it would've been a significant quality of life downgrade. Even if both partners work, being able to stay above water on a single salary does wonders for the peace of mind.

In the context of planning retirement with perpetual income coming from a lump sum, you have to take family into account (because that’s what most people end up with).

Yeah, I can believe that, but that is 1 city, what number constitutes 'many'?

The claim was that 70k is when additional money does not improve wellbeing, not whether this is more than most people earn. Obviously the number has to be quite higher than the average income.

I live in the UK and I can assure you than earning £52k or £70k a year is not an insane salary and is certainly way below the income at which money no longer makes a difference.

Or this is £50k-70k after tax and per person in the household. In which case this means earning well in excess of £200k a year for both parents for a family of four, which is probably more realistic but also probably means this only applies to the 1%...

I live in the UK, earn less than 52k and can assure you that 70k is quite a remarkable salary to be earning. It puts you in the 94th %ile of earners. If you do not think that is a big deal, I do not know what to say.

https://www.gov.uk/government/statistics/percentile-points-f....

Edit: And my comment was actually to the claim that 70k is 'very, very low'. Which it is not. The comments section of HN occasionally reads like it is perused only by billionaires.

That is not the point, which is, again, about the level of income where additional money no longer makes much difference.

I don't dispute that 70k is a very good salary but I can tell you that 70k is far from being the level at which additional money no longer makes a difference. 70k is indeed "low" in that respect, especially with a family.

An example: a good private school costs circa 16k a year. It makes a massive difference compared to your local state school. To be able to spend £16k a year cash you need to reach around this £70k income level before tax for both parents... For a single child. So IMHO, in the UK the level at which extra money no longer makes a difference to way of life or well-being is quite higher than £70k.

I do agree that claiming that $70k (£52k) is not even a living wage in some western cities seems outlandish...

>An example: a good private school costs circa 16k a year.

I think the argument is a good private school doesn't make much difference.

I can't find it now but there was some research in the UK a few years ago that showed nearly all the superior results output from private education was determined by the input. Children starting at private schools were already ahead of their peers at state schools by a long way.

Whether these children were already ahead is beside the point.

The point is that being able to afford a private school makes a big difference in what it brings to the child (education, environment, facilities, etc) and also to the potential stress and effort at the expense of quality of life it avoids (see what some people do to pass the 11+ and get into a grammar school)

This is just an example to illustrate that a £50k-70k income in the UK is far from the level where additional money no longer makes much difference to well-being.

>Whether these children were already ahead is beside the point.

It's absolutely the point. You are saying a private education is essential to wellbeing and I'm saying it's irrelevant.

The study is very interesting, thanks for the link. I think, it is hard to draw the conclusion from it that increasing your income above a certain threshold does not increase your happiness in the case considered here. (They say something along these lines in the discussion section, too.) All the study says is that "if you are a person that earns more than a threshold, you are typically not happier than a person who earns approximately the threshold salary" (very stylised). This is not the same as saying "all else equal, if you'd earn more than the threshold salary, you would not be happier". So, in this kind of thought-experiment, where you get additional money that is free from, e.g., the typical downsides associated with it (e.g, more work, longer hours, more responsibility, or other things like that), you would not expect this to be applicable. Hence, if you're a person who is in a position where they can simply generate more income through, e.g., licensing deals, it does not seem unlikely that more income will actually make them happier.

https://www.inc.com/news/articles/2010/09/study-says-$75,000...

>and very, very low.

The median wage in the US is $36,000, less than half of that.

What you say is crazy. I live in Paris with 12k a year, no holidays and not comfortable but it _is_ a living wage, the minimum wage actually. I can imagine needing the triple of that if I took holidays and treated myself to nice restaurants and bought fancy clothes. But that's still well below 70k. So if you are the kind of person that consider 70k very low, you are also the kind of person I would remorselessly take the money from.

Paris is a big metro. I’m sure you don’t live in the expensive parts. And what about a family? Retirement? Vacations? Owning your own place?

A quick search shows the median salary in Paris is about 50k euros, which is roughly 60k USD. But being on median income is usually not that great anyway.

Not cassepipe, but also currently living on (less than) minimum wage, in an expensive part of Paris, France. I'm cooking, coding, reading, watching youtube. This year has been "great" for me. Of course I would have liked more comfort, some foods I can't affort but, but I've got a good bed, a good chair, an excellent desk, good cooking knives, an ereader with a practically infinite supply of free books, computers and hard drives (hidden) everywhere in my 20m². I write the kind of code I like to write, I'm not accountable to anyone. (not anonymous you can try to name search me to cross check)

I estimate I'd need about 30k€/y to be able to not skip on anything I'd want to do. (usual disclaimers apply: young-ish single man living alone, never had health issues, with no desire to live in any other way, etc)

Actually you are right as Paris itself is quite small and quite expensive. But Paris is a five minutes walk away so I guess it's fair to say I live in Paris. My point was not arguing on how great I live but that beyond the triple of what I live with, as a single person, I can't imagine how can someone "complain" of only making 50k or beyond, because that's like spitting in the face of the majority of the population that lives with the minimum wage.

Really? SMIC is 14364€/year.

I really doubt it's enough to live in (the real) Paris as a single person in the long run. It's estimated you need around 40k€ to live a modest decent life in Paris.

That is the "brut" salary. Part of it goes to retirement, health and other stuff I guess. So it would be closer to 1200 actually.

if 70k a year is very very low to you, you should really start travelling after covid ends. the poorest billion people on this planet live on 1 USD a day each.

It is “very, very low” as the level where happiness tapers off. I know I can, and will, do a hell of a lot more with 140k per year than with 70k per year.

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