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Comment by simonh | Hacker News Reader

A while ago I read about a study that surveyed people with inherited wealth. IIRC they ranged from having inherited tens to hundreds of millions. No matter how much they had inherited, when asked how much they would need to have inherited to feel financially secure and not have to worry about money, they said they would need something like half again to double.

I may be misremembering the details, but that was the gist of it but I couldn't find the article again. I suppose expectations scale up with means.

On the other hand discovering people they know are actually very wealthy seems to have a massive negative effect on people's levels of empathy. Wealthy people who have suffered bereavement or personal tragedy report people who are less wealthy than themselves rarely offer sympathy and they often get comments along the lines of 'knowing what it's like for the rest of us now', or 'what it's like to have a problem you can't buy your way out of'.

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There's this in The Atlantic: https://www.theatlantic.com/family/archive/2018/12/rich-peop...

“All the way up the income-wealth spectrum,” Norton told me, “basically everyone says [they’d need] two or three times as much” to be perfectly happy.

It references this study: https://www.hbs.edu/faculty/Pages/item.aspx?num=53540

Thanks, that's the one. I suspected I was under-shooting the multiple.

I remember reading it initially some time ago - and visiting it anew I'm surprised how high the multiple is. In my head it was "10% - 25% higher".

My personal hunch is too many of us "shoot just too high" in terms of what we can afford, be it housing, cars, whatever.

Granted there are plenty of disciplined individuals and families out there and it's certainly not impossible to live within one's means.

But human nature is what it is - why "settle" for a $400,000 home when the bank will give you a mortgage for $500,000? Why settle for a Ford, VW or Toyota when the car finance payment for a BMW or Merc are just a little bit higher each month?

There's definitely a status thing goes on too...

Maybe it’s because I grew up in a frugal household, but I have basically never felt like I needed more money since properly starting my career.

I mean it helps that I have tended to live in lower COL cities, but I have always saved a sufficient portion of my income, and I have never had the feeling that I want to buy something or travel somewhere and I can’t because I can’t afford it.

I don’t fly first class, and I rarely stay in luxury accommodation, but those things just don’t matter to me, especially compared to the freedom of always having extra money.

I feel like this is such a relaxing way to live, and I have never understood the lifestyle treadmill or conspicuous consumption.

Yeah, I pretty much ignore my bank balance and autopay my bills and mortgage and never have to think much about money. By the apparent standards of SV techs I'm well below the poverty line. I find it difficult to empathize with them.

Never having to think about money is an incredibly privileged position though. That’s true regardless of your standard of living.

This comment seems to fairly controversial for some reason. If someone reads this still and disagrees, can you let me know why?

Hi! I'll give it a try, though I didn't downvote you. My reading is that your comment is trying to argue with the one above it, even though you're both coming from the same direction.

GP says that "SV techs" are unrelatable because they always want more $, and mentions that they're satisfied with what they make. They don't try to say that they're not in a privileged position, just that they don't see the need to always be wanting more.

Your comment, then, is a bit of a non-sequitur - even though it's correct, you don't really have an argument to have with GP. Maybe it's just your phrasing that's throwing people off.

Thanks, I read it all a few times more and I think I can see what you mean, though it’s quite hard.

No matter how, I keep coming away with GP sounding like they’re humblebragging :) I don’t have issues with the literal content, just with the meaning I read into it.

Either way, thanks. This is the first time I’ve seen a comment on HN flip flop around so much on score.

> They don't try to say that they're not in a privileged position, just that they don't see the need to always be wanting more.

Indeed, I recognize my position is privileged, especially on a global scale.

I've observed that brushes with mortality or ill-health can also quickly alter one's perspective. Once one gets the perception that there's a threat of being physically unable to work for much longer, I think the drive to have an increasingly large "safety net" can become very strong.

Or, you’ll realize that you could die at any moment, so you might as well enjoy your money while you have it.

Death is one thing; a long life of fragility is another. The latter costs more, and I think can cause some people to suddenly look much differently at their wealth.

Or you realize you may not die at any moment and find yourself too old or infirm to earn enough support yourself and you need to not enjoy the money now so you might be able to scrape by later.

depends on your goals. I don't worry for myself. I save about half of my take-home (and I don't make an SV salary). unless the bottom falls out of the software market completely, I'll be fine. I do worry for my friends and my young cousins who haven't yet found their path in life. it's not my responsibility to do so, but I won't have "enough" until I can protect them too.

For me the feeling of needing more money does not come from wanting to spend more now, but rather a foreboding feeling that any moment jobs could dry up and I'll need to support myself and others via savings in an extended recession.

Interesting. I'm solidly upper-middle-class (typical income for this forum, I imagine). I don't think doubling my net worth would make me much happier or financially more secure. It would allow a new Tesla instead of a used BMW. And flying business class for vacation. With the state of health care/insurance in the US, despite being a ridiculous amount of money by most measures, it wouldn't allow me to retire in the 50s or remove the concern that I'm one bad car accident or cancer scare away from financial ruin.

Yep, the US healthcare system basically means you have to be a multimillionaire when you've retired if you want to have any semblance of a comfortable retirement, because any serious injury or health issue (which will happen at some point) will do a damn good job of sucking up most or all of that money away super fast.

If you're younger at least you might get lucky with GoFundMe "insurance", but that requires your story being sad or unusual enough to go viral, or you have a large family and friends network (starting a donation campaign on GoFundMe.com, what just about every American has to rely on for serious health expenses nowadays). If you're old you're probably not going to be pulling at enough heart strings to rely on this, though.

I thought everybody over 65 in the US got free national healthcare?

They get free national health insurance, but it doesn't cover everything and dealing with the bureaucracy is a non trivial amount of effort. And there are still out of pocket deductibles to pay even with this national coverage. As a result people often purchase supplementary insurance.

It's the US, so of course "free healthcare" still leaves you with lots of large bills if you actually use any healthcare. Usually one pays for "gap coverage" insurance, running low-hundreds of dollars per person (consider: married couples) to cover things that aren't covered, or are poorly-covered, by Medicare[0] and those still don't mean you aren't going to have a substantial hospital bill if anything goes wrong (as they usually don't cover 100% of a bill, just like normal US health insurance)

[0] Medicare is our insurance program for old people, and I think also kicks in for those who are disabled at younger ages. Medicaid is the name for our HC program for the very poor. People get these mixed up because the names are so similar. Then of course there's our coverage for the active military and their families (Tricare) and VA healthcare coverage for retired military. And programs for other government employees, and their families. By the time you add it all up, a huge percentage of the US population is already covered by government healthcare schemes, actually, which is reflected in our spending enough on publicly-funded healthcare that we should be able to cover everyone with just that money, if our costs were similar to the rest of the OECD. Instead we still have the costs of private insurance and bills to individuals even when covered by healthcare (these can run into the five figures per year, easily, on top of insurance costs) and, for some of the above, huge expenses in addition to the costs of the government portion of the HC program.

[EDIT] Medicare gap coverage tends to run low-hundreds of dollars per person per month, in case that wasn't clear.

Medicare is reasonably cheap (assuming you paid Medicare taxes for at least 7.5 years; if you did not, it's at least $471/month). To be clear, "relatively cheap" is "at least $148.50/month; more if you have more income during retirement".

But past the premiums, there are deductibles, coinsurance (e.g. for hospital stays longer than 60 days), you still have to pay for medicines (how much varies), etc. See https://www.medicare.gov/your-medicare-costs/medicare-costs-... and the links from it for details.

> Yep, the US healthcare system basically means you have to be a multimillionaire when you've retired

That's just not true. Everyone qualifies for Medicare when they are 65 years old. An extra $150/month gets you supplemental insurance, with a lower deductable than many work plans.

Also, and this is significant, medical bills can't collect against retirement accounts. The law is that they can't touch it. Same with your house and car. You can have $10k, $100k, or a million dollars in a 401k, an ira, or a roth, and withdraw it as you need it, to supplement your social security income.

So how come I keep hearing that a significant portion of homeless in the US have lost their houses in a medical-event-realted bankruptcy?

Retirees qualify for nationalized health insurance. In theory, those 65+ would be mostly immune for health-related bankruptcy (although co-pays/deductibles can still be problematic).

Anybody younger has to pay for health care out of pocket or buy insurance. The cost of paying OOP is exorbitant. Even buying insurance on the open market is outrageously expensive. In either case, major medical issues can easily escalate to be financially disastrous.

Edit - in my original post, I stated doubling my net worth (or income or whatever) wouldn't allow me to retire in my 50s due to potential medical costs. This is what I mean - even with a few million in the bank, retirement isn't feasible due to the cost of buying healthcare in the US.

I had this conversation with an uncle who lives in Scotland. He didn't understand why my dad was still working (at age 60). Medical insurance was the only reason. As soon as he got Medicare, he retired.

For the benefit of others who may be reading I'll mention a couple of other programs...

There's Medicaid, the federally funded healthcare program for the poor. It is free. As a single person there are really low limits on how much assets and income you can have and qualify. Kids are more easily qualified, even if there parents may not be. Doctor choice is limited, there are lines, etc.

There's also the VA, available for veterans. I'm not sure of the rules around this. But those qualified get free care.

Throughout the country hospitals are supposed to patch up anyone who shows up with an emergency. The patient will get a bill after, but they won't be left to bleed to death. This doesn't help with slowly developing problems, though.

Beyond these free programs, (and Medicare for retired folks, talked about earlier), there's also Obamacare, which subsidizes medical coverage for those making too much to qualify for Medicaid. Someone working full time for minimum wage and making $14k per year (which is enough to rent a room and have a junk car), might end up with a subsidized plan having a $6k+ deductable (which they don't have!), someone making double that (enough for an inexpensive apartment and a used car) would pay $175 a month for the same plan. Obamacare details vary by state.

People with jobs making more than the above often have health care offered through work, and no longer qualify for Obamacare plans. At the low end these plans may not be as good as the Obamacare plans. Typically these plans might cost the employee $100-$200/month and up if there are multiple plans to choose from (the employer may be contributing 2-5x that, depending on the job), and have a deductable of several thousand dollars, with yearly exams and routine screening included for free. The problem becomes that you have to pay for everything else up to your deductable, then costs are shared up to a max limit perhaps $15k, then the plan covers all costs for all covered care. The deductable and maximum double for family plans.

One big problem with all the plans with deductables is that it is near impossible to find out what anything non-trivial will cost, which is discouraging when you have to pay some of these costs.

Government employees typically have the best plans, similar to what the average white collar worker had 20-30 years ago. Small copayments instead of large deductables. These plans were phased out by most private employers because they were too expensive, for both employers and most employees.

I would guess the typical example of this might be a working age person who lived paycheck to paycheck then had a non-trivial medical issue to deal with. They may have already had other house/car/student/credit-card debt. The medical problem may have interfered with their ability to work. They may qualify for other free-care programs after they burn through all their savings.

(That's where putting those savings in retirement accounts would have helped, but with few exceptions you can't access that money before the age of about 60, and also remember that it's a borrow and spend culture here, not saving for a rainy day.)

The best one could say is that bankruptcy is a way to get a clean slate, wiping out prior debts, and to be sure that the homeless statistic you are looking at doesn't count those who moved back in with family as homeless (some do).

The worst one can say is that the system is optimized to extract as much money as possible form as many people as possible...

After doing the math, it's looking like my rough estimate was a little high, but I suspect the numbers I'm about to share is higher than you're thinking.

Sure, they qualify for Medicare, but that doesn't mean they won't be still be spending serious money on healthcare. According to CNBC, if you were retiring in 2019, as a couple in good health you'll need on average of $390,000[1]. That assumes you're on Medicare as well. I'm guessing most people here are about 35 years old or younger, so not eligible for Medicare for at least another 30 years.

If I assume 2.5% inflation over the next 30 years (the default given in the following link[2]), that $390k in 2019 becomes $860k in 2051.

Granted that seems to be the average, and there will be people with less expenses. But that's just healthcare. While you'll probably own your home outright by then, there's the eventual assisted living that might be in your future as well, which already can cost up to $1500-4000 a month today (with monthly expenses another $2k+)[3], let alone 40-50 years from now. Although I suspect some people help pay for that by selling their homes at that point.

So okay, maybe you don't need to be a multi-millionaire when you retire to be comfortable, but you probably should try to be a millionaire, at least you and your spouse together (assuming you're going to have one).

One thing I didn't take into account was Social Security, which assuming it's still around in 2050 that will offset some of this. I do have a bad habit of assuming Social Security is going to be either severely nerfed or fall apart by the time I retire, so I tend not to account for it in my retirement planning. Maybe you could knock off $300k thanks to Social Security checks, I don't know and don't have time to dig further.

[1] https://www.cnbc.com/2019/07/18/retiring-this-year-how-much-...

[2] https://smartasset.com/investing/inflation-calculator

[3] https://www.assistedliving.org/the-average-cost-of-senior-li...

I think that I follow your logic.

But retirement funding is so dependent on an individual's expenses, ability to generate income, expectations, risk tolerance, and available resources such as assets and family. These are all different for different people. Life expectancy and related health expenses are a huge unknown. Rich or poor we are all going to die, but we don't know when or how.

I think it's reasonable to retire as a healthy 50 year old with a million dollars. I know that may be unconventional around here. The existing (subsidized) obamacare and (supplemented) medicare options are a pretty good deal, in combination with savings to cover deductables, out of pocket maximums, and dental. Medicaid would be the backup for the worst-case scenarios, typically long term nursing home care. But that'll bankrupt most people, in most countries [0]. Is it reasonable to expect otherwise?

I was curious about the $390k figure you quoted, there wasn't any detail provided. I wonder if these are expenses over and above what medicare covers, like elective surgeries, or if this figure includes money for private nursing home care, etc. It was for two people.

Back to your original post, it is easy to keep retirement savings in a qualified 401k/ira/roth account that, along with a primary residence up to a generous maximum, is protected from medical debt with the exception of long term care. A retired millionaire should have around half of their money protected in such accounts. Do other countries give someone in similar financial circumstances a better deal?

[0] https://www.thinkadvisor.com/2014/11/24/12-countries-who-in-...

What about private insurance?

This is patently false and what mikem170 says is true. My mother has little-to-no savings and had a serious issue happen where she was in the ICU for a couple weeks and then in a rehabilitation facility for a month and a half, and paid nothing.

As I become more wealthy, I have started to tackle problems that I never really thought about when I wasn't as well off, things that cropped up when I thought I'd finally have peace of mind. In retrospect, the insecurity was always there, but I had the luxury of ignoring it when I was poorer.

Once I started making enough not to worry about rent, the problem was then saving enough for things like retirement, setting up tuition funds for the family, etc. Now the problem is managing my mix of investments and having a big enough pad to insulate myself from the occasional recession. But, I think even if my net worth were to triple there isn't really anything I can do to avoid a great depression-level economic catastrophe. Beyond that, I know not what money problems people with eight or nine figure net worths are scared of but I would assume if I ever made it that far the anxiety won't go away.

Just remember that your anxieties are child's play compared to the anxieties of people worrying every day about paying for their place to live, food or health care. These worries are tally different.

People out there having bigger problems does not diminish your own. To me, getting my children into a good public school is a current problem which is giving me anxiety. Someone saying "that's not really a problem, at least you can afford to feed your kids" doesn't come off as helpful or ease my concerns.

Similarly, billions of poor people in developing countries would kill to swap places with the poorest American, but that doesn't mean the latter has a good life.

I once read something that resonated with me (though I can't remember where), in essence that everyone has a default level of stress and anxiety that they feel (a "stress bubble" if you will), and it does not matter so much what your particular life situation is, you tend to fill up the "bubble" with whatever is going on in your life at the time. The idea is that you feel the same amount of stress as a teenager with your social issues as you do as a successful adult with more than enough money to live comfortably.

This really impacted me because I definitely came from a poor-ish background where I lived month to month and only thought about paying rent and whatnot. I then went to community college at 29 to give myself a chance at something else and then ended up making well into 6 figures having worked up to a director of a software company (unheard of in my social circle growing up).

At the time that I read this I remember feeling just as stressed about work things and family issues as I was when I didn't have health care and could barely pay my rent. Looking back, I remembered that I would feel just the same way about friend issues as a teenager when that was my whole world - something I would now scoff at as unimportant and incidental. It helped me realize that a lot of my stress levels were "baked in" to me - but that also meant I could affect my stress levels by being aware of my bubble.

Now when I am feeling stress about my financial portfolio or my kids getting proper education during the pandemic, I make a conscious effort to compare it to the helpless feeling I had when I made no money and felt powerless and that allows me to shrink my stress bubble. I also empathize much more with my kids and when they are stressing about something that my adult self realizes is not consequential. I remember that this is just them "filling their bubble" and to them it is just as important as the things I am dealing with. It also makes me appreciate those people who have a naturally small bubble and realize that that is also often a factor in their success (e.g., though I don't know Elon Musk, I can imagine that he has a naturally small stress bubble that allows him to drive so hard for success).

This is not to criticize you in any way, on the contrary, I agree with you 100%. But it is an empowering way of looking at your life.

This kind of dismissive attitude toward peoples' problems is unhelpful. Following your line of reasoning, there are people with crippling diseases in the world. People worrying about a place to live etc should remember that their problems are child's play compared to theirs. And those people should remember their problems are child's play compared to someone being targeted by genocide.

There are nearly 8 billion people in the world. You can always find someone worse off, that doesn't mean people are undeserving of empathy if they aren't the one single worse off human being. This sort of worst-off competition is dehumanizing.

That is really a terrible argument. I am sorry but I am not going to feel sorry about you just because you are stressed about which crazy expensive private school your kids should go to. It is not really a worst-off competition it is just that at absolute level of suffering your issues are ignorable.

> it is just that at absolute level of suffering your issues are ignorable.

I'm curious, how do you go about establishing that level? Do you think it's really absolute, rather than relative to the stressors the observer feels? In reality, I think that's how most people actually operate. Something (extremely roughly) along the lines of: T >= O, where T is suffering of the target and O is suffering of the observer, results in empathy.

That gets caught up in the fact that suffering is more about perception, and is itself relative. So maybe we have to say both are level of suffering as perceived by the observer.

Something along the lines of "if I perceive you as suffering more than I do, I can have empathy for you". For what it's worth, I think this gets at the heart of the difference between sympathy (largely pity) and empathy more generally.

They're really not child's play. At least not for me.

I've been poor. Not homeless poor, but paycheque-to-paycheque, zero dollars in the bank, $1500 on some maxed out credit cards, just budgeted out the non-negotiable bills (rent, heat, credit card minimum payment) for this month and I need to find $8.47 in the sofa to break even and guess I'll hit up the food bank to feed myself again sorta poor.

I make... decent money now.

Is my life objectively better? Yes.

Does the stress of figuring out where my next meal comes from and the stress of figuring out where my meals 30 years from now and how to finance my child's education feel different? No.

Anxiety is anxiety. Just because in a global context it's not as bad doesn't mean it's not as bad to the individual.

If you have a reasonable level of wealth invested in a diverse range of products you really don't have much to fear from a great depression.

A brutal and unfair characteristic of recessions is that the pain is very unevenly distributed. I've lived through several severe recessions here in the Uk and myself and my family were fine because we had comfortable jobs and incomes. Our house prices didn't appreciate as much and our wages were stagnant for a while, but we were fine. The pain falls on people who lose their incomes, lose their investments and come out of college with no jobs to chase.

I'm in no way diminishing the real hardship that these events cause, it sucks.

I've been thinking about this a lot lately. There seem to be two "problems" to solve for.

1. A permanent loss of wealth. When you've got more cash, you've got more to lose. People have more to gain from robbing/suing/hacking you. Being sued when you only have a year of savings is much different than being sued the day before retirement. The various life/house/health/car/umbrella insurances should hopefully put these worries at ease. Or at least that's what I've been telling myself. Being in the earlier part of my career, I've been looking more at life and disability insurance if fate messes me up before I've built up a nest egg.

2. A temporary loss of wealth (Plan for a rainy day. Then solve for an even rainier day). This one gets me good, since there's always another increasingly more obscure edge case I didn't plan for. Like you said, these always existed before, but there were just larger problems eclipsing them. I think it's important to remember that there can always be a rainier day to plan for, and that it becomes a slippery slope into the prepper lifestyle (not a bad thing if that's your jam!). I think what's been giving me a break from this anxiety is a flexibility of lifestyle. If there's some sort of crash, I don't need to diversify to the magical ratio that happens to survive that crash - I need to keep from drawing a significant amount of money until the markets recover. Maybe this means dropping cost of living (where a more lavish lifestyle will have more fat that can be trimmed in difficult times). Or, if I'm still lucky enough to be employable at that time, I can work to ease the burden. This doesn't blanket over "world has devolved into chaos" scenario, but having stock in oil or a collection of gold bars probably wouldn't help much in those cases either. You'd have to go full prepper :)

> they would need to have inherited to feel financially secure

It seems ridiculous to most of us, but I can see how it happens. I grew up pretty poor - my father was a police officer and my mother didn't work because she had to watch the four of us. But I graduated with a degree in CS in '95 (if you're thinking about graduating with a degree in CS, try to do it in '95 because that may be the best possible year to do it) and am much better off financially now than my family was when I was growing up. Still, I keep worrying about my kids: I can pay to send them to college, but I can't afford, say Harvard or MIT. I have to keep reminding myself that they're far better off than I was at that age and I managed to turn out OK - I think part of it is that I end up comparing my situation with the people around me, many of whom are far better off than I am.

The average software engineer makes around 100k. If you have been working for 20+ years, has it been difficult for you to save up enough money for college?

Not during at least three quarters of the mentioned period and not for every location even today.

> save up enough money for college

Depends on the college. MIT says to expect to spend ~ $70K/year. $100K * 20 years = 2 million. Two kids * 4 years = $560K. That's a little over 1/4 (before taxes). So yes, it would have been difficult to save up that much money. I have enough to send them both to a public in-state school debt-free, but not an elite private school.

What in gods name could they be spending $70k a year on?! They hire a private teacher for every student?

I don't know MIT but my first reaction is that number probably does include room & board, which in a college town might be $20k a year.

$50k a year in tuition is still not a bargain, of course.

Not at all, considering my tuition was €1500, with the total my university received for me (with government supplement) being around €5000 / year.

I really cannot imagine what they’d do with that kind of money. Besides build super fancy buildings of course.

Professors don't make much these days, but check out the salary for university administrators in the US. The top of the food chain has quite nice compensation, and the amount of administrators is probably too high.

Universities also compete on who has the best food and nicest dorms. Prospective student often tour campuses, so having a pretty one with lots of rose bushes, ivy, and brick is good for recruiting. That all costs money.

Another thing is that elite private universities often have strong need-based financial assistance (discounts). MIT, for example, claims that the average need-based scholarship is about $47k (on tuition of 53k). They also claim 31% attend tuition-free.

Making a small inference: Those who actually pay the full $53k in tuition are helping those who pay nothing.

> Making a small inference: Those who actually pay the full $53k in tuition are helping those who pay nothing.

Possibly, though it's also possible that those who have paid into the University's endowment in the past are helping those who pay nothing.

My kids are getting to college age and its worth considering that MIT has 11376 students whereas google claims there are 19.6 million college students in the USA at this time. So if distributed purely randomly, in the "everyone MUST go to college" USA, something like 99.942% of kids will not be paying MIT tuition.

Another thing to consider is if you're investing $280K in the MIT brand, do they offer any bachelors degrees worth $280K other than maybe CS and pre-med?

I get your point, but the bursars for those other colleges didn't seem to get the memo that they aren't MIT.

The thing is, MIT's tuition is fairly typical for a private university. If anything, MIT (and other elite private universities) offer better discounts than lower-ranked schools.

I would argue that it's hard to save enough for college at any income, due to need-based financial aid (aka perfect price discrimination by ogopolists). Most need-based systems take into account parents' income and college savings, and children of software engineers in particular are going to be near the part of the curve where that starts to bite.

I randomly chose Princeton's financial aid calculator because it was close to the top of Google. For a family with two working parents, two kids (one entering college), and $250k in home equity in Illinois (the middle of the USA):

* For a $100k/year SWE + a $25k/year something else and no college savings the expected family contribution is $30k/year

* The same family with $250k saved in a 529 college savings plan is $45k/year

* For a $125k/year SWE + a $50k/year something else and no college savings the expected contribution is $50k/year

* The same family with $250k saved in a 529 college savings plan is $66k/year

* The same family with $450k in home equity is expected to pay $75k/year (I guess you're expected to take out a home equity loan to pay for college).

* Make the family renters with $50k/year income (30k+20k), and their contribution drops to $4.4k/year.

The point is: The more you save, the more you need to save. And the more you make, the more you need to make.

That's not to say need-based tuition is bad policy. But, it does mean that "surely it's easy to pay for college with your level of income" doesn't really come into play until you reach the top 1-2% of income.

Everyone below that is going to have their tuition adjusted to make the out of pocket cost painful but bearable, and the average SWE isn't a 1%-er.

It is never about how much money you have, rather what situation you are in, what you are expecting and what others around you have.

Yep!

As someone from a former socialist country, I can confirm.

Situation has got a lot better in the last ~30 years, people have alot more, but since a few people got even more than that, some complain a lot. Average worker family has gone from bicicyles and maybe one yugo (or a "fico" - even smaller/cheaper) to two, maybe three european-mid-range cars + all the modern extras, but are not happy, because their neighbor has as 100k€ mercedes.

Comparison is the thief of joy.

Theodore Roosevelt

Indeed. Comparison is not bad as that is what current academia is based on. However also be aware comparison is NOT the ONLY way to experience life.

One of the effect of comparison is that it diminishes one thing over another.

I often find new the thing when I just experience one thing for itself without comparing against a pre-existing experience and thing.

it makes some evolutionary sense tho - because objective wellbeing is only part of the competition. Relative wellbeing is what "counts" for real, esp. when competing for scarce resources.

Well, this is ok when you work more, to get more for yourself...

...out here, people want their neighbours to have less.

There's a local saying that in Finland, people would prefer paying €100 to the neighbour getting paid €50. I take it that's true elsewhere too? :)

Here it's "let my cow die, just if two of neighbours' die"

But yeah... we earn relatively little (compared to you), and have better cars than most of the northern europe... most of them on long year loans... It's not rare to see an (eg.) BMW X7 owner at a gas station pump 9.85eur of gas, than slowly fondle the pump handle, because he only has 10eur for gas. The neighbors see the car, not the amount of gas inside :)

Also a lot of "not in my back yard" behaviour.

It sounds like the basic idea is the same; perceived relative status is more important than actual status, though the details obviously differ.

Yes, according to one of my old economics teachers, above the subsistence level, happiness is approximately how much better off you are than your neighbors.

If you choose to play that game. In my experience focusing on what you need to be happy and ignoring your neighbors is a better recipe for happiness and a whole lot cheaper.

A quote about personal happiness that has lived with me for some time: "comparison is the thief of joy"

Growing up poor and now being more well off than most of our community is actually a source of stress for my wife and I.

I wonder how much of that is innate rather than being driven by consumerist propaganda though. Do I really want a new car because the Jones's next door have one, or because advertising makes me feel somehow inadequate because I don't have one?

I think advertising has a role but it’s amplifying an existing cultural value rather than creating one. A culture which conceives of itself as capitalist naturally encourages thinking of wealth as your score and at least in the U.S. we lack much counter pressure pushing other values as equally important. Even things like religions which discourage this have been distorted to fit, as anyone who’s ever seen a prosperity gospel believer try to talk their way around the clear meaning of the needle’s eye parable can attest.

I think this comes back to basic primate social dynamics. We evolved tracking our social standing relative to others and wealth is pretty easy to compare. Advertising exacerbates that tendency but I don’t think there’s any way to get rid of it with standard issue humans.

This study maybe true. But there are levels of poverty where people don't just have a subjective desire to have more money but have real hard worries about paying for food, health care or a place to live. That's totally different from people wanting a nicer car or nicer house and way more psychologically stressful.

The lack of empathy for the wealthy goes both ways. The wealthy traditionally haven't had much empathy for people with less money so it's not too surprising that people with less money don't have much empathy for them. It makes me really angry when I see multimillionaires in the news warning about the risks raising the minimum wage. It's actually pretty sad.

The thing is, humans can't sense a constant velocity, we can only sense change. People always want more. Some people get addicted to the feeling of more and then a constant velocity actually feels like they are losing something. It's even possible to get addicted to the second derivative, ie. your upgrades getting bigger and more frequent. It's impossible to talk to people objectively about how good their life is because you just don't know what they are used to.

In all cases people struggle because they've absorbed things into their life that they now consider essential. The things you own end up owning you.

> I suppose expectations scale up with means.

Isn't that social pressure? No matter how much you start with, if you end up with less than that, people see you as a failure. A person who inherits 10 million dollars and is afraid of going down to 1 million isn't as much afraid of selling his yacht as he's afraid of what his peers would think of him.

I know it doesn’t matter much but just to ground these numbers a bit - anyone owning or trying to own a yacht with “only” $10M is indeed heading towards $1M very quick.

Upper middle class know-it-alls sneer at the bad financial decisions of the guy living in the double wide with a brand new corvette in the driveway while the lower middle class looks up to his efficiency and prioritization.

A yacht is the same thing with the decimal moved a couple places. If your income is fat enough to give you 10m in the bank then you can definitely own a yacht so long as you don't mind living in the kind of neighborhood where your neighbors are plumbers instead of surgeons.

yes, but only in a rough sense. the ratio of maintenance cost to purchase price is much higher for a yacht (or really any boat) than for a mass produced car like a corvette. if you can afford to buy/finance a corvette, you can usually afford to drive it too. the same is not true for any boat larger than a canoe. there is a reason for the old joke about a boat being merely "a hole in the water that you throw money into".

There is a distinction between a yacht (generally > 35 feet, needs a full crew) and just a boat:

https://www.tessllc.us/whats-the-difference-between-a-yacht-...

One thing I learned as a parent is that kids always compare up the wealth scale, never down. I'm sure my parents noticed that, too.

I've never heard about the negative effect on levels of empathy. I suspect that it is unusual for people to have friends far poorer or richer, and it is easy to be dismissive of the problems of those one does not know.

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