How Much Money Do We Need?

So, in life, happiness is determined by how less you complain rather than how big your "hat" is. These two articles below will demonstrate my point:

1) Article 1: "All We Want In Life Is To Get Paid & Get Laid!" From http://blog.penelopetrunk.com

How much money buys happiness? A wide body of research suggests the number is approximately forty thousand dollars a year. Daniel Gilbert, professor of psychology at Harvard University, says once you have enough money to meet basic needs – food, shelter, but not necessarily cable —incremental increases have little effect on your happiness.

Aaron Karo, comedian and author of the forthcoming book, Ruminations on Twentysomething Life, responds to the number with, “If you want to draw a line in the sand, happiness is having enough money so you don’t have to move back in with your parents."

To someone who just spent four years in college living off nine-thousand-dollar loan stipends, an increase to forty thousand means a lot – moving from poverty to middle class. But it’s a one-time rush. After you hit the forty-thousand-dollar-range money never gives you that surge in happiness again.

Twentysomethings who are looking for happiness from their careers will benefit from research about their parents’ choices. Richard Easterlin, professor of economics at University of Southern California says previous generations have proven that our desires adjust to our income. “At all levels of income, the typical response is that one needs 20% more to be happy." Once you have basic needs met, the axiom is true: more money does not make more happiness.

So then one asks, what does matter? The big factors in determining happiness levels are satisfaction with your job and social relationships. And in case you found yourself slipping back to thoughts of salary, according to Easterlin, “How much pleasure people get from their job is independent of how much it pays."

Unfortunately, people are not good at picking a job that will make them happy. Gilbert found that people are ill equipped to imagine what their life would be like in a given job, and the advice they get from other people is bad, (typified by some version of “You should do what I did.")

Gilbert recommends going into a career where people are happy. But don’t ask them if their career makes them happy, because most people will say yes; they have a vested interest in convincing themselves they are happy. Instead, try out a few different professions before you settle on one. For college students, Gilbert envisions this happening with part-time jobs and internships at the cost of “giving up a few keggers and a trip to Florida over spring break." But even if you wait until you enter the workforce, it makes sense to switch from one entry-level job to another; no seniority and scant experience means you have little to lose. So it’s an ideal time to figure out what will make you happy: Use a series of jobs to observe different professions at close range to see if YOU think they make people happy.

It’s simple, proven advice, but few people take it because they think they are unique and their experience in a career will be different. Get over that. You are not unique, you are basically just like everyone else. Gilbert can, in the course of five minutes, rattle off ten reasons why people think they are unique but they are not. For example: We spend our lives finding differences between people to choose teachers, band mates and spouses, so our perception of peoples’ differences is exaggerated… And then Gilbert gets to grapes: “If you spend seven years studying the differences between grapes, no two will look the same to you, but really a grape is a grape."

So your first step is to stop thinking you’re a special case. Take Gilbert’s advice and choose a career based on your assessment of other people in that career. You next step is to focus on social relationships, because in terms of happiness, job satisfaction is very important but social relationships are most important.

And by social relations, most researchers mean sex – with one, consistent partner. So consider giving your career aspirations a little less weight than you give your aspirations for sex. For those of you who like a tangible goal, David Blanchflower, professor of economics at Dartmouth College says, “Going from sex once a month to sex once a week creates a big jump in happiness. And then the diminishing returns begin to set in." He adds, to the joy of all who are underemployed, “It’s true that money impacts which person you marry, but money doesn’t impact the amount of sex you have."

Maybe all this research simply justifies the twentysomething tendency to hold a series of entry-level jobs and put off having children. Says Karo: “All we really want is to get paid and get laid."

2) Article 2: "$75000 is the amount you need to be happy! Any increment would mean a diminishing return on your utility!" From: www.time.com

People say money doesn't buy happiness. Except, according to a new study from Princeton University's Woodrow Wilson School, it sort of does — up to about $75,000 a year. The lower a person's annual income falls below that benchmark, the unhappier he or she feels. But no matter how much more than $75,000 people make, they don't report any greater degree of happiness.

Before employers rush to hold — or raise — everyone's salary to $75,000, the study points out that there are actually two types of happiness. There's your changeable, day-to-day mood: whether you're stressed or blue or feeling emotionally sound. Then there's the deeper satisfaction you feel about the way your life is going — the kind of thing Tony Robbins tries to teach you. While having an income above the magic $75,000 cutoff doesn't seem to have an impact on the former (emotional well-being), it definitely improves people's Robbins-like life satisfaction. In other words, the more people make above $75,000, the more they feel their life is working out on the whole. But it doesn't make them any more jovial in the mornings.

The study, by economist Angus Deaton and psychologist Daniel Kahneman, who has won a Nobel Prize for Economics, analyzed the responses of 450,000 Americans polled by Gallup and Healthways in 2008 and 2009. Participants were asked how they had felt the previous day and whether they were living the best possible life for them. They were also asked about their income.

The authors found that most Americans — 85% — regardless of their annual income, felt happy each day. Almost 40% of respondents also reported feeling stressed (which is not mutually exclusive with happiness) and 24% had feelings of sadness. Most people were also satisfied with the way their life was going. (See TIME's special issue on the science of happiness.)

So, where does the $75,000 come into play? Researchers found that lower income did not cause sadness itself but made people feel more ground down by the problems they already had. The study found, for example, that among divorced people, about 51% who made less than $1,000 a month reported feeling sad or stressed the previous day, while only 24% of those earning more than $3,000 a month reported similar feelings. Among people with asthma, 41% of low earners reported feeling unhappy, compared with about 22% of the wealthier group. Having money clearly takes the sting out of adversities.

At $75,000, that effect disappears. For people who earn that much or more, individual temperament and life circumstances have much more sway over their lightness of heart than money. The study doesn't say why $75,000 is the benchmark, but "it does seem to me a plausible number at which people would think money is not an issue," says Deaton. At that level, people probably have enough expendable cash to do things that make them feel good, like going out with friends. (The federal poverty level for a family of four, by the way, is $22,050.)

But in the bigger view of their lives, people's evaluations were much more tied to their income. The more they made, the more they felt their life was going well. The survey asked respondents to place themselves on a life-satisfaction ladder, with the first rung meaning their lives were not going well and the 10th rung meaning it was as good as it could be. The higher their income, the higher the rung people chose. "Importantly, the same percentage increase in income has the same effect on evaluation for everyone, rich or poor alike, even though the absolute dollar amounts differ," the authors write. So every 10% rise in annual income moves people up the satisfaction ladder the same amount, whether they're making $25,000 or $100,000. "High incomes don't bring you happiness, but they do bring you a life you think is better," conclude the authors. Might it be time for Oprah to give these guys their own show?

Past research on money and happiness has also found that it's not absolute wealth that's linked with happiness, but relative wealth or status — that is, how much more money you have than your neighbors.

It's no surprise, then, that when the same polls are done in different countries, Americans come out as a bit of a mixed lot: they're fifth in terms of happiness, 33rd in terms of smiling and 10th in terms of enjoyment. At the same time, they're the 89th biggest worriers, the 69th saddest and fifth most stressed people out of the 151 nations studied. Even so, perhaps because of the country's general wealth, they are in the top 10 citizenries where people feel their lives are going well, beaten out by such eternal optimists as the Canadians, New Zealanders and Scandinavians.

Right. Now that Princeton researchers have untangled that life mystery, maybe someone at MIT can look into the optimal amount of money required to buy us love.