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Comment by rahimnathwani | Hacker News Reader

I recall a colleague once (~10 years ago) telling me that some people he knew felt that 5k GBP would be enough to solve all of their (money) worries.

I thought it absurd, i.e. too low given things like planning for old age. I guess there are people who would think my estimate too low if I said I needed 5m for the same purpose. (not saying 5m is the right number for me or anyone else.)

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It's difficult to see beyond your immediate problems when you're broke and living month-to-month. My guess is that anyone who says $5k will solve 'all of their money worries' is probably not including retirement in that figure.

Those people are thinking they will never be able to retire, so why include that?

For what it's worth, I think most people think their financial situation will eventually improve (even if they're wrong).

One of the projects I want to do is to map living expenses, inflation and life expectancy to know exactly how much money is "enough". My problem is that we forget that we tomorrow should be more valuable to us than today and by the time we get this realization, we might have lost many years (of adulthood).

> One of the projects I want to do is to map living expenses, inflation and life expectancy to know exactly how much money is "enough".

There you go: http://www.nileshtrivedi.com/2012/07/10/how-much-is-enough.h...

Or, just create a blank web page with black font saying "it's never going to be enough, give this thought up".

Reminds me of another saying that software development time is never enough, except when you have hard borders and deadlines with the right priorities and vision - it will take exactly that time.

Getting more money loosens the borders - you buy better houses, better cars, have bigger family, make bigger investments..and you need more to support that.

That's true to a point for everyone: that having more money from a low starting point primarily increases lifestyle. But as you add more and more money, I think that most people reach a turning point where "enough really is enough" and their worries about money truly diminish, but that lifestyle stops increasing.

As I've grown in my own career, for sure my lifestyle increased. I literally subsisted on Ramen and $2 frozen pizzas in my first startup. Then as I achieved more income, I added a convertible, then a 401-k, then a new SUV (worst decision to that point), then a first house, then maxing out 401-k, then an airplane, then a classic Mustang, then a city apartment because my house was too far away and I got tired of the constant commute, then moved to a house in the city, then had 2 wonderful kids, then added 529s (college savings plans), then a bigger airplane, then...

All of those things, except the 401k and 529s, also came with additional expenses in time and money. (Technically, those 2 did as well, but in an immaterial way compared to orchestrating the maintenance on a house, classic car or airplane.)

However, I can also see that increases in income from here won't go towards (current) lifestyle inflation, as we have "enough" now. That could be because I'm older and wiser now, rather than a natural knee in the lifestyle vs income curve, but I'm inclined to think it's a natural knee.

For very few people does that knee hit before $100K/yr in a major US city. I'd guess that for a great many people, it doesn't hit until after $250K/yr, which is why people for shorthand say that it doesn't exist.

If you'd like to challenge yourself to bring that knee closer to the left side of the graph for yourself, I recommend Mr Money Moustache, Len Penzo and JLCollinsNH as bloggers who write extensively (and well) about this topic. Quick Googling will find them all.

I believe that getting to the right side of that knee, where you can stop worrying about money, is worth so much more mentally and emotionally than any amount of lifestyle inflation (beyond the basics of food and shelter). So, whether you can manage to increase your income to pass to the right of the knee, or move the knee to the left of your income, either way you'll be happier than a new car, new house, splendid vacations or 100 great dinners out.

The two major studies I've seen on this topic have both said that the magic number is actually 60-75000 a year. After that happiness plateaus. I would source you but I'm on mobile.

I actively worry about this and I'm skeptical of your thesis that people will naturally reach a point of "enough really is enough". Even in your own story you are saying that you have enough now, but up until this point your expenses have grown to meet your income. The same is true for me, and I worry that it will always be so. I tend to believe that the majority of people will continue to grow with their income to very high numbers. I don't see the majority of people making $1M/year living a comfortable $250k/year lifestyle and investing/donating the rest. Some yes, but certainly nowhere near 50%.

Airplanes must be cheaper than I thought, if a classic car and a city apartment comes after an airplane.

Well, I was in my 20s working for a hedge fund, and caught the aviation bug BAD, so don't read much into that prioritization other than, "I had money burning a hole in my pocket and all the sense of a 20-something..." :)

You can buy a functional single-engine airplane for $30-50K. $50K even gets you into something that I'd consider pretty nice for an entry level airplane. They go way, way up from there, of course...

Based on the following research, I guess $75K?

http://www.npr.org/blogs/money/2010/09/07/129703291/new-stud...

That's per year and doesn't keep up with inflation. To have financial independence, you need enough money so that $75k or whatever annual number you want is derived from the earnings of whatever your your sizable chunk of money is invested in.

What does financial independence have to do with that number? The article is about "happiness" and "enough". Fuck-you money is not required for either of those things.

The theme of this discussion is about freedom. That includes not having to rely on an external source of spending money, yearly income, "fuck-you" money, or whatever you want to call it. This is also known as financial independence.

The $75k per year has to come from somewhere. If it's not interest from an investment or some other automatic payout, then you are not free because you have to work at making sure you always get that $75k a year to be happy.

In paraschopra's comment about calculating how much is enough, he mentioned life expectancy. That tells me is isn't just considering an annual amount of money to be happy, but a greater amount from which the annual money comes from.

Ah, you are right, I missed the part about life expectancy.

Of course, the $75k number is based on working individuals- I expect the number will be completely different for non-working individuals. People who are not working both do not enjoy the same life-satisfaction that can be had from rewarding employment, and do not suffer the stresses of that employment, so who knows where the balance of happiness lies. Perhaps if we are talking about someone who is not working for their money, there is no such thing as "enough", as they have no happiness "cost" to simply having more money (as they do not need to work for it)?

For me personally I know it's way more than $75k but less than $200k. I have expensive hobbies and like to to travel without blowing my savings.

Of course expensive hobbies require more money. However the point of that article is (vaguely and generally across the people they studied) your expensive hobbies and traveling do not increase your happiness as much as the pursuit of the extra money decreases it. In other words, you get some combination of diminishing returns on happiness per dollar, and increasing cost of happiness per dollar. $75k is the proposed sweet-spot, where happiness gained per dollar spent is still high and happiness lost per dollar earned is still low to moderate.

The study says no such thing. It only makes claims about averages, not about individuals, just like every other study.

Right, the study does not say exactly those things about individuals; I'm loosely extending those conclusions to the individual poster, to help my parent understand what the study means and why it suggests $75k is more happy than $200k. After all, it is not immediately obvious why $200k wouldn't be more happy than $75k- isn't $200k more money? Doesn't more money always make you happier?

To put it another way, for me, I am way less happy making $75K than I am now. That's even considering I have to do more to get the extra income.

The way I read the original article is that most people pursue things like luxury goods, houses, and cars which don't increase your happiness. If you keep your standard of living low, but income high, you can do more traveling, use the money to spend time on your hobbies or with your family.

I disagree a bit on houses not increasing happiness. I enjoy owning my house much better than renting.

Find an actuary. This is what they do for a living.

5k seems absurd, though there is a big differential in the UK between those who own a house and those who do not. If I lived in London, 1e6 GBP would be necessary for housing alone, a ridiculous sum compared to the average wage.

Do you have a large family or a need for an enormous space?

London's expensive, but it's not that expensive. You can get a nice, but not huge, apartment in a central area for £400 / week which would work out to £20K per year.

Source: this was true as of 2011 when I stayed with friends in a 2BR apartment paying exactly that.

I was going to make the same comment, but:

- I then realise he's probably talking about buying rather than renting

- I read this report which claims that the median value of residential property in fancy parts of London (what the report calls 'Prime London') is 1m GBP, and the mean is about 1.4m GBP: http://www.marshandparsons.co.uk/news/research/item/1519-lon...

I do live in London, and while it's expensive, I can't see how you could need £100k annually simply for accommodation. Unless you have a very large family to support too?

Only an unwashed pleb would live in anything less than 20,000sq-ft, eh?

1e6 is a million. I assume he's talking about buying a place rather than renting.

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