Experienced well-being rises with income, even above $75,000 per year
pnas.org
pnas.org
I know that my subjective well-being was higher with an income of $100K in 2008 than it is with a half-mil+ in 2020. Why? Because the social system around me wasn't crumbling. Pre-GFC it was hard to imagine the degree to which your fellow Americans could end up hating and distrusting each other. $100K/year was a very respectable upper-middle-class income that could buy a house and have plenty left over for savings.
Now, you can be making a couple million a year and only be worrying about who's about to take it from you or whether your assets are going to be worthless in the next financial crash. You're certainly better off with that couple million than without it, though.
Are you being serious? If you're lucky enough to somehow be paid a couple of million dollars per year, you could work for a small few years and retire without any financial worries at all.
That's an absolutely massive salary, and I don't understand how someone could be getting that amount of income and have any reasonable grounds to be worried about their financial situtation.
This is obviously sarcastic but sadly not far from what some people actually think. And i guess tent cities is where that thinking gets you to.
The usual answer to this is diversification, but the normal "safe" investments - Treasuries, S&P 500 index funds - are all heavily dependent upon political stability in the U.S. If the U.S. erupts in Civil War, basically all American companies will become worthless. Their employees will be dead and their physical capital will be in rubble, so there's nothing to own.
My elder cousin purchased a house in the city for $300,000 in 2001. No amount of stop-the-rat-race mentality gets me a house for $300,000.
Prices have gone up, way more than salaries.
> No amount of stop-the-rat-race mentality gets me a house for $300,000.
Note that the median price of a home in the US is somewhere in the $250k - $300k range.
Where is cool + cheap now?
Are there enough creatives in meat-space to attain the critical mass necessary to generate those places like in the past? Or are many of them staring at their phones all day?
New Orleans
Montreal
Kansas City
Pittsburgh
What was the median price of a home in the US in 1980 vs 2020. Then, what was the median salary in the US in 1980 vs 2020. Thats the real comparison.
No reason to note that houses are still cheap in some far off country, thats not really a convincing argument.
Per the St. Louis Fed [1], the median American home price in 1980 was ~65k. The median American home price in 2019 was ~320k. That's an approximately 4.9x increase. Also from the St. Louis Fed, the 1980 median American family income was ~21k, and the 2019 median American family income was ~86k. That's an approximately 4.1x increase. So it looks like median house price has increased about 20% more than median salary.
65K borrowed in 1980 cost $719/mo. 320K borrowed today costs $1349/mo (both are principal and interest only).
$719 in 1980 is $2258 in 2020.
[0] https://fred.stlouisfed.org/series/MORTGAGE30US - I picked 13% as an approximate (somewhat low even) average rate for 1980.
Compare what happens when you get a raise or a small windfall and try to pay your mortgage off early.
I'd pick "small amount, high interest" over "massive amount, low rates" if that were an option.
I am planning to refinance again (back to a 30-year mortgage) and won't be in any hurry whatsoever to pay it off early. Borrowing money at 3% nominal with the (hopeful) prospects of economic growth allowing inflation to return means that I expect/hope to be borrowing that money at negative real rates in the back half of that loan.
Thats what's happening the last five years.
I wish I could find the source, but I read a quote from someone that grew up back around the turn of the last century.
She said, "I never thought I'd be so wealthy as to have my own automobile. And I never thought I'd be so poor to not afford any servants"
Also, housing prices are highly regional. My brother bought his first house (4 bed, 2 bath) in our hometown for $58k about five years ago. Now he lives in a similarly sized house on 20 acres of land that he paid $200k for.
I live in a more populated area, but I also bought my house (3 bed, 2.5 bath) three years ago for $100k.
Cars can be built on assembly lines, mostly by machines, with very few humans doing the labor, and thanks to the speed of manufacturing, many millions can be built every year.
How do you "build" servants? Right now, a Mommy and a Daddy have to romp around until Mommy gets pregnant, then it takes 18 years and 9 months minimum to build that servant. But what about the systems in place to identify top talent and utilize that servant better? What happens if that servant is tested and has a 140 IQ. Well then we need her to be a nuclear physicist, or a cardiovascular surgeon, or an AI researcher. She's wasted as a servant, and we can't afford to waste our resources in the modern world.
The problem with Agatha Christie's quote is her outdated understanding of the world. In 1910, when Christie was 20 years old, the smartest person born to the lowest class of British society had precisely dick-all chance of rising to become a Fellow of the Royal College of Surgeons, even if it was clear to everyone he interacted with that he could easily do the requisite work.
I suppose one day someone will say, "I never imagined I would be rich enough to afford a robotic kitchen, but too poor to live on Mars..." or some such nonsense.
As to measuring inflation generally via the proxy of housing, the relationship is confounded by regulation that subsidizes demand and restricts supply, especially in cities like SF & NY, which is almost guaranteed to raise prices. In lots of other arenas, e.g. access to fresh food, real prices have gone down over time in America.
Now you’re increasingly < 10 miles from a Walmart and Amazon will deliver nearly everywhere.
15 years ago, a lot of this was still accessible, but you’d have to plan your Walmart trip or trudge through eBay or umpteen online retailers to cut out the b&m markups.
That 30k is around 85k today. Interest rates then vs today would make for the same monthly payment in actual dollars of around $500/month. $500/month in 1981 is like $1400 today. This would mean the house should be worth around $300k today at today’s interest rates.
Of course the location may be more or less in demand which greatly influences price.
Where I grew up the houses are more expensive than in the 80’s but the location isn’t in demand so the inflation and interest adjusted cost is well below the cost back then.
Those extra down payments are worthless now..
I do think the down payment is more difficult for many people today. The solution to this was to allow less than 20% down. But then the borrower has to pay PMI until they have 20% equity. There are tax rebates for first time buyers too.
People need more discipline in saving and investing and looking for smaller places in areas with less demand. Get into the market and build equity and scale up over time.
I think the main issue with housing prices is some people can’t afford to live where they want to live. And there’s some legitimacy there as people don’t want a long commute for various good reasons. But it boils down to people not being able to finance the lifestyle they want. Hence gentrification where those with limited means move into areas currently populated by people with even less means. And of course that has its own opponents who also generally oppose new development oddly enough.
Maybe remote work will loosen the demand to live in a handful of expensive cities?
When my parents got their first house in the 80s, I think the interest was just shy of 20%
If I buy a house today, I can literally get 0%* interest on the loan.
20% interest over 30 years means you have paid almost 6 times the value of the loan with your last payment.
So if they could afford the house at 20% interest, they can afford it at 5 times the price with near zero interest.
This has been one of the main factors for pushing house prices way faster than salary growth. The monthly payment can grow (somewhat) with salary while the sticker price on the house can grow much, much faster.
* Don't live in the US, but house prices in the EU are just as crazy as anywhere
Medical service doesn’t exist for the industry on top of it. Housing doesn’t exist for the industry built on top of it. I wish our government considered the well-being of the host nearly as much as the parasites rather than asking Mr. Mosquito what he thinks would be beneficial.
Now, you would save two months of payments..
I’d say the stop-the-rat race mentality is to move to a smaller city, unless you’re literally working on Broadway or some job that’s uniquely tied to a large city, there’s plenty of jobs and lots of space out in flyover country.
Many many houses, including mine, cost less than that. Some of them cost an order of magnitude less. If you're not considering moving out of a city with fancy tech career prospects a viable option, then you are possibly not understanding the concept of a rat-race.
Aside from a couple tech companies out there, good luck trying to relocated and wfh in the mid-west.
WFH might help break the cycle to some degree, but the majority people will still be in cities (by virtue of, well, being a city), which creates incentives for younger generations to go there (dating + outgoing life), even for those who would rather settle outside the city once they find a partner.
I agree though, that folks also live in cities by inertia. They've always lived there, and don't know any better. Even though they've got problems getting employment and housing, they can't see any solution. That's a demographic too.
Working from home seems to have a similar narrative on hacker news I’ve found, probably for similar reasons - either you work from home happily or you reluctantly go into the office.
30 year old 1 room apartments in small town Hokkaido. Just saying.
If a loaf of bread cost $0.10 in the US in 1950 and now you're like, well a slice of bread in Vietnam still costs $0.10, thats not really a good argument.
If a loaf of bread cost $0.10 in 1950 and now you're like, well a slice of bread in Vietnam still costs $0.10, thats not really a good argument.
If you equate your income with your self-worth, then you'll never feel that you have enough.
If you can step outside that framework, you'll find that you may still make significant money, but it doesn't really matter so much.
I suspect the answer is yes to both, from which I conclude "2020 was worse across the board by important stability measures that you value, but for any given year, $500K in income is better than $100K."
Probably not by much. All I really wanted was a basic place to live, enough food on the table, and a reasonable expectation that that'd continue into the future. My job was already doing what I would do for fun beforehand.
"Would your experienced well-being in 2020 be lower if you were making $100K/yr?"
Yes, because those things - food & housing security - are increasingly precarious on $100K/year now. You can still live on $100K/year in the Bay Area, but you're a couple years of rent increases from being priced out, and forget homeownership.
If it's still possible to make 500k+ working at FAANG now that stocks aren't increasing so rapidly, I need to get on that right away :)
How high is L6? I've got about a decade of experience, I heard most don't make it beyond L6 but it's all rumors.
> Two things to note here. (1) the x-axis is logarithmic. There's a HUGE difference in income between the rightmost points. (2) the y-axis spans a TINY effect size. And TINY / HUGE = EVEN TINIER. 3/7
> A randomly sampled highest-income participant ($480.000) would have lower well-being than a randomly sampled lowest-income participant ($15.000) 25% and 33% of the time for the two outcome measures. Income explains 1.5% and 4% of the variance. 5/7
* https://twitter.com/jonaslindeloev/status/135383426475696537...
* https://lindeloev.net/new-pnas-paper-income-is-a-poor-way-to...
This fed into an attitude of buying the right thing the first time. It is a contributor to my ability to spend money to eat better and the resulting health improvements that further feedback into a better life.
Furthermore, my attitude has shifted from "get wealthy" (20s) to "optimize for time." (30s) and that too has impacted my perception on what career and lifestyle I want.
All this is to say: I do believe there is a soft cap on what money does for your wellbeing. I think the cap probably varies from person to person, and that everyone should try to figure out how to detect what it is for them, lest they burn non-renewable resources going past it. No amount of money makes you or your kids young again.
I always thought the reason for being wealthy was having free time.
I'm glad I snapped out of the delusion that you need to waste your youth working so that you can finally enjoy life when you're old and have trouble getting a boner.
We have a cultural problem where we don't use money to buy time. We instead use money to buy everything else. You're usually looked down on for making the time trade, like some sort of deadbeat who doesn't want to work hard. We make day to day decisions as if we were immortal.
[0] https://moneywise.com/a/boots-theory-of-socioeconomic-unfair...
Now, what will improve the quality of life varies from person to person, but I don't think it is the case that everyone is getting the most out of their money.
I think probably this and the original article it's countering are both essentially junk science and represent a serious problem though. We have become used to having strong binary statements about nuanced socio/economical/physcological phenomenon throw out as capital S Science. And then the obvious second paper comes out with the opposite conclusion which is also presented as "Science".
Think of all the stuff online "Science says this is the beset way to fold your clothes" and they link to some weak paper that mentions that there is some benefit to doing something maybe in some constrained situation. Is it any wonder we have a society of people half of whom think it's all bullshit?
Yes, these studies use the same scientific process regarding hypotheses and data collection as a physics or chemistry experiment but the nature of that data is VERY different and conflating the two is a mistake in my opinion.
My attitude after getting to sort of see things from the outside is pretty similar to yours. I believe in the power of repeatable observations. I’ll pass most science allegiance tests you throw my way. But I’m also pretty damn disappointed in the world of science today. Academic incentives are whack. Journalistic incentives are worse. Then throw some social media on top and it’s just a mess.
The life you can live at $35,000 a year is going to be dramatically less pleasant than the life you can live at $350,000 a year, just as the life you can live at $35,000,000 a year is going to be dramatically more pleasant than at either of those, but eventually you reach a point where even if you were to make $35,000,000,000 a year, it cannot dramatically change your life.
At some point, you become so wealthy that the only difficulties that life can present to you are difficulties from which no person has immunity.
$a/yr is when you no longer worry about how to pay for food/clothing/shelter and have a little extra for some relaxation, which is probably right around $75K a year in most of the country.
$b/yr is when you no longer need to check your bank account for small purchases.
$c/yr is when you no longer have to maintain a family budget -- you make enough to know that whatever you consider reasonable will be affordable.
$d/yr is when you no longer worry about larger purchases, like cars or cruises or multi-week vacations.
$e/yr is when you no longer have to work.
$f/yr is when you no longer have to work nor maintain a budget.
The order of the last few might change depending on the person and their lifestyle, and obviously if you aren't working you aren't really thinking about dollars per year anymore but total assets. I feel like after "no longer have to work", there is not much to go after that, unless you have a personality disorder where you cannot be happy unless you have power over others.
Don't need to rent when you can buy and break even within a few years. Meanwhile, the poor are perpetually derived from their opportunity of cutting down their monthly expenses. Similar cases exist for first-hand purchases vs second-hand purchases, higher quality goods that will cost less over their entire duration than low quality goods, etc.
It can be that once you get past one income plateau and obtain enough wealth, you can drop down an income plateau and still reap most of the benefits thanks to your reduced costs compared to your peers.
As originally posted by a1988eli on Reddit, as a reply to a question about the lives of wealthy people:
I can answer this one. For some reason, I attract these people into my life. I don't do anything super extraordinary. I am not famous. But I count many peoplewith ultra high net wealth among my close friends and I have spent more time than even I can believe with 8 different billionaires. This is not just meet-and-greet time. This is small group and even one-to-one time. I dated the daughter of one billionaire several decades ago. So I have gotten a peek into this life.
Let's get one thing out of the way. There are gradations of rich. I see four major breaking points:
Worth $10mm-$30mm liquid (exclusive of value of primary residence). At this level, your needs are met. You can live very comfortably at a 4-star/5-star level. You can book a $2000 suite for a special occassion. You can fly first class internationally (sometimes). You have a very nice house, you can afford any healthcare you need, no emergency financial situation can destroy your life. But you are not "rich" in the way that money doesn't matter. You still have to be prudent and careful with most decisions unless you are on the upper end of this scale, where you truly are becoming insulated from personal financial stress. (Business stress exists at all levels). The banking world still doesn't classify you as 'ultra high net worth'
Net worth of $30mm-$100mm
At this point, you start playing with the big boys. You can fly private (though you normally charter a flight or own a jet fractionally through Net Jets or the like), You stay at 5 star hotels, you have multiple residences, you vacation in prime time (you rent a ski-in, ski-out villa in Aspen for Christmas week or go to Monaco for the grand Prix, or Canne for the Film Festival--for what its worth, rent on these places can run $5k-20k+ per NIGHT.), you run or have a ontrolling interest in a big company, you socialize with Conressmen, Senators and community leaders, and you are an extremely well respected member in any community outside the world's great cities. (In Beverly Hills, you are a minor player at $80 million. Unless you really throw your weight around and pay out the nose, you might not get a table at the city's hottest restaurant). You can buy any car you want. You have personal assistants and are starting to have 'people' that others have to talk to to get to you. You can travel ANYWHERE in any style. You can buy pretty much anything that normal people think of as 'rich people stuff'
$100mm-$1billion
I know its a wide range, but life doesn't change much when you go from being worth $200mm-$900mm. At this point, you have a private jet, multiple residences with staff, elite cars at each residence, ownership or significant control over a business/entity that most of the public has heard of, if its your thing, you can socialize with movie stars/politicians/rock stars/corporate elite/aristocracy. You might not get invite to every party, but you can go pretty much everywhere you want. You definitely have 'people' and staff. The world is full of 'yes men'. Your ability to buy things becomes an art. One of your vacation home may be a 5 bedroom villa on acreage in Cabo, but that's not impressive. You own a private island? Starting to be cool, but it depends on the island. You just had dinner with Senator X and Governor Y at your home? Cool. But your billionaire friend just had dinner with the President. You have a new Ferrari? Your friend thinks their handling sucks and has a classic, only-five-exist-in-the-world-type of car. Did I mention women? Because at this level, they are all over the place. Every event, most parties. The polo club. Ultra-hot, world class, smart women. Power and money are an aphrodisiac and you have it in spades. Anything thing you want from women at this point you will find a willing and beautiful partner. You might not emotionally connect, but damn, she's hot. One thing that gets rare at this level? friends and family that love you for who you are. They exist, but it is pretty damn hard to know which ones they are.
$1billion
I am going to exclude the $10b+ crowd, because they live a head-of-state life. But at $1b, life changes. You can buy anything. ANYTHING. In broad terms, this is what you can buy:
Access. You now can just ask your staff to contact anyone and you will get a call back. I have seen this first hand and it is mind-blowing the level of access and respect $1 billion+ gets you. In this case, I wanted to speak with a very well-known billionaire businessman (call him billionaire #1 for a project that interested billionaire #2. I mentioned that it would be good to talk to billionaire #1 and B2 told me that he didn't know him. But he called his assistant in. "Get me the xxxgolf club directory. Call B1 at home and tell him I want to talk to him." Within 60 minutes, we had a call back. I was in B1's home talking to him the next day. B2's opinion commanded that kind of respect from a peer. Mind blowing. The same is true with access to almost any Senator/Governor of a billionaires party (because in most cases, he is a significant donor). You meet on an occassional basis with heads-of-state and have real conversations with them. Which leads to
Influence. Yes, you can buy influence. As a billionaire, you have manyways to shape public policy and the public debate, and you use them. This is not in any evil way. the ones I know are passionate about ideas and are trying to do what they feel is best (just like you would). But they just had an hour with the Governor privately, or with the Secretary of Health, or the buy ads or lobbyists. The amount of influence you have can be heady.
Time. Yes, you can buy time. You literally never wait for anything. Travel? you fly private. Show up at the airport, sit down in the plane and the door closes and you take off in 2 minutes, and fly directly to where you are going. The plane waits for you. If you decide you want to leave at anytime, you drive (or take a helicopter to the airport and you leave. The pilots and stewardess are your employees. They do what you tell them to do. Dinner? Your driver drops you off at the front door and waits a few blocks away for however long you need. The best table is waiting for you. The celebrity chef has prepared a meal for you (because you give him so much catering business he wants you VERY happy) and he ensures service is impeccable. Golf? Your club is so exclusive there is always a tee time and no wait. Going to the Superbowl or Grammy's? You are whisked behind velvet ropes and escorted past any/all lines to the best seats in the house.
Experiences. Dream of it and you can have it. Want to play tennis with Pete Sampras (not him in particular, but that type of star)? Call his people. For a donation of $100k+ to his charity, you could probably play a match with him. Like Blink182? There is a price where they would simply come play at your private party. Love art? Your people could arrange for the curator of the Louvre to show you around and even show you masterpieces that have not been exhibited in years. Love Nascar? How about racing the top driver on a closed track? Love science? Have a dinner with Bill Nye and Neil dGT. Love politics? have Hillary Clinton come speak at a dinner for you and your friends, just pay her speaking fee. Your mind is the only limit to what is available. Because donations/fees get you anyone.
The same is true with stuff. You like pianos? How about owning one Mozart used to compose music on? This is the type of stuff you can do.
IMPACT. Your money can literally change the world and change lives. It is almost too much of a burden to think about. Clean water for a whole village forever? chump change. A dying child need a transplant? Hell...you could just build and fund a hospital and do it for a region.
RESPECT. The respect you get at this level is just over-the-top. You are THE MAN in almost every circle. Governors look up to you. Fortune 500 CEOs look up to you. Presidents and Kings look at you as a peer.
PERSPECTIVE. The wealthiest person I have spent time with makes about $400mm/year. i couldn't get my mind around that until I did this: OK--let's compare it with someone who makes $40,000/year. It is 10,000x more. Now let's look at prices the way he might. A new Lambo--$235,000 becaome $23.50. First class ticket internationally? $10,000 becomes $1. A full time executive level helper? $8,000/month becomes $0.80/month. A $10mm piece of art you love? $1000. Expensive, so you have to plan a bit. A suite at the best hotel in NYC $10,000/night is $1/night. A $50million home in the Hamptons? $5,000. There is literally nothing you can't buy except.
Love. Sorry to sound so trite, but it is nearly impossible to have a normal emotional relationship at this level. It is hard to sacrifice for another person when you are never asked to sacrifice ANYTHING. Money can solve all problems for someone, so you offer it, because there is so much else to do. Your time is SOOOO valuable that you ration it. And that makes you lose connections with people.
Anyway, that is a really long answer, but I have a very unique perspective because I have seen behind the curtain of the great and mighty OZ. just wanted to share
EDIT: Wow! An unbelievable response to this (8x gold and 6000 upvotes. OMG) Thank you for all the comments and PMs. I am working 14 hour days right now, so I can't answer most, but to answer the most common PMs:
Seeing all of this doesn't make me want to get into the top tier. Different lives have the same emotional degree of difficulty: I met Sylvester Stallone at a party a few months back for the first time. Great guy. Has a beautiful, smart wife and a great career. He had a special needs son who died young.[1] Nobody has it all. Nobody.
[1] - Poster's comment - He's referencing Sage Stallone, who had a rare heart condition and died at the age of 36.
Having that much wealth and power concentrated in the hands of such a few is a societal sickness.
They're effectively stealing a disproportionate amount of our world's resources for their own pleasure, at the expense of everyone else.
Not really. Think about this way. One share of Amazon costs $3,292.23. If someone gathers $3,300 and offers to buy that share at that price, Jeff Bezos's wealth just went up $424,000,000. But it's not like he took $424MM from anyone. And he wouldn't actually be able to get that $424MM, because if he started selling his shares, there would need to be enough people with $424MM more than they had before that want to buy it.
At that level of wealth, most of the money doesn't actually exist. It just represents control. It's basically created from nothing.
I agree, and that's part of the problem as well.
But also, to use your example of Bezos, he cashes out a few billion dollars of shares per year for his own personal gain. All while Amazon's workers (whose hard work enabled him to do this) are being treated so badly.
I was having a small group lunch with the founder of eBay once when I worked there, and someone asked him how his life is different now that he's a billionaire. He started to mention some of these things, and at the end he said, "I'm still just as ugly as I ever was, but now lots of smart beautiful women seem to be interested".
He posted a video of his daughter singing a song on YouTube about 9 months ago.
And the most heartbreaking is his post about what its like to date someone vastly richer than you, which is to say, pretty awful.
There's ample evidence that happiness still rises with income, just logarithmically: https://www.washingtonpost.com/news/wonk/wp/2013/04/29/yes-m...
Which honestly makes a _lot_ of sense to me, since most human senses work on the log scale for better magnitude compression: Light sensitivity, Hearing and lots of others.
The log scale just fits very well with any perception application designed to not overload neural networks — and if you plot this on the linear scale, it always looks like there's a knee in the curve where it stops rising, when in reality, it's just gradually getting slower.
The median sale price of a house in the US in the year 2000 was around $163,000. Now it's $324,000.
Meanwhile $48,000 in income then is now $75,000 today inflation adjusted, according to the BLS. If you stayed in that general income bracket, you've been royally punched in the face economically.
And then we get to the cost of healthcare and education over the past 20 years. Someone in the $75,000 tier has spent the last two decades being financially tortured as their disposable income is being eroded by persistently rising costs they can't do much about (go without healthcare, don't buy a house, don't send the kids to college, don't have kids).
That $324,000 house today will cost you $1,500 per month. After all taxes are accounted for, in a normal tax state, you're going to likely have ~$4,250 per month; after that house, you're down to $2,750; and that's before you get to any bills or saving. The only shot a person at $75,000 has today, is to live somewhere where the cost of living is quite low, or to pair up with someone and hopefully double that income (and that still won't be enough if you're in a more expensive location).
Edit: Lol, parent is < 0 at the moment. Downvotes sound fine in theory, but are usually low-effort, passive aggressive enforcements of bias in practice. If you have real counter arguments to make, please make them.
That $324K house in 2020 at 3% mortgage rate costs you $1366 in principal and interest. (assuming 100% financed, decrement both amounts as you see fit)
That's only a 14% increase in monthly payment over 2000, while general inflation has increased by 56% over that same time (all using your figures above, with the exception of researched mortgage interest rates for 30-year fixed mortgages). I'm not saying it's not hard now, but it wasn't easy then either. Life has pretty much always been a struggle for most people.
I like to think of money a bit like gasoline.
100 gallons of gas will last you pretty well forever if you ride around on a moped.
It will get you maybe an hour or two down the road if you're driving around in a fully loaded semi.
What most people need in order to be happy is somewhere in the middle. Unfortunately, many people are determined to live in a way where their reach always exceeds their grasp.
You can't outrun financial idiocy.
You mean being able to pay the rent, send their kids to university, pay their medical expenses without getting bankrupt? Because that's the kind of life most people aspire to.
> You can't outrun financial idiocy.
Following this line, most people are financial idiots, which means they are responsible for their poverty?
Your whole comment is conflating poor financial planning with actual poverty.
If you break people into: those legitimately without enough resources to get by, those who would have enough if they knew how to manage money, and those who have enough whether or not they can manage money; I would wager that the people with enough money but terrible planning skills would be the plurality, whether or not they were the outright majority.
Once you slip into the "I can afford this because I can make the monthly payments" line of thinking, you are pretty much by definition living at the cusp of your means. That's where most people are, whether or not it's a good idea for them to be.
Financial illiteracy is a better term, since I don't see why we should expect financial planning to be an innate ability.
At some point we have to decide if we want people to consume the most they can or if we want them to be "responsible".
I guess maybe the difference in my mind vs illiteracy and idiocy is that someone illiterate in a matter may still manage to put together that whatever they are doing isn't working and maybe they should try something else.
The idiocy comes in when people know it's not working, and know it's designed not to work, but dammit if they aren't going to live that way anyway and complain the whole time.
However, I believe part of the relationship below $50k is also status-related, in addition to the material comfort explanation. The people most opposed to the minimum wage are those earning just above it, presumably because it would decrease the status differential between them and the people earning less, which negatively impacts their genetic fitness.
I'd also hypthesize that the correlation above $250k is stronger for men than women, due to status being the likely driver.
I would say for much of the US, that's about where life becomes comfortable if you're single (can't comment on with kids, I've never done a budget with them). Bills aren't a worry if you don't make poorly planned large purchases, you can afford a decent place to live, and you've got some money left over at the end of the month to save or work on a hobby or whatever.
This is obviously not true in the hot cities, though. I think $75k is under the poverty line if you have children in the Bay Area.
Regardless, I think the point of 75K is that it's the threshold where you are generally confident that you can start thinking about future planning rather than immediate needs. Yes you still have to rent, think about budgeting, and be a bit cautious in spending, but at least you know that the basics of living are covered.
I can imagine that the ability to buy stability drives these happiness curves.
[looks around] am I..am I surrounded by lizard people?
That number for me is about half a million. We’re all different and I don’t appreciate being pigeonholed by the “experts”!
Yes it still rises at a significant rate past $75,000.
Yes this was already known before this study.
Yes our intuition was always correct, before scientists said it wasn't, than said it was to a level, then corrected themselves, then now gaslight us into thinking they haven't already corrected themselves.
Whoever authored the original 75k year study had a bias and/or agenda against our current economic system.
We didn't need a study to show that even above a 75k salary, more income is correlated with more well-being.
This is a prime example of why scientific research should be used as a tool to advance society, not as a religion.
* https://twitter.com/jonaslindeloev/status/135383426475696537...
* https://lindeloev.net/new-pnas-paper-income-is-a-poor-way-to...
Also, if you've experienced significantly different levels of salary then this is obvious.
Here’s the original graph from the study.
The study: https://www.pnas.org/content/107/38/16489
"Emotional well-being also rises with log income, but there is no further progress beyond an annual income of ~$75,000"
"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."
The study states that emotional well-being does not rise with income over 75k. The study also concludes that high income is not correlated to happiness.
These conclusions are clearly erroneous.
Edit: $75K is basically two people working at proposed min wage with moderate OT. $3000 per month with even laughably low $1K mortgage would leave you with just enough for family of four.