Would a Salary of $161,000 Make You Happiest?

It should, according to some new “research” my wife passed along to me. There was an article and vid on Today.com a few weeks back, and apparently $161,000 is the new $75,000 across the world ;) The amount every other study shows as being the tipping point for happiness (i.e. the optimum number where the ratio of extra happiness vs. extra income doesn’t scale as equally anymore)

This new study comes from a place called Skandia International, where they asked all kinds of people from all kinds of different countries/cities about their thoughts on money and being happy. Everyone except those of us in the U.S. apparently, haha… And $161,000 was the average salary needed to hit that plateau. Here were some of the breakdowns:

  • Hong Kong: $197,702
  • Singapore: $227,553
  • UK: $133,010
  • Dubai: $276,150
  • Germany: $85,781
  • Mexico: $185,169
  • Chile: $128,679

I guess our German friends are easier to please then others :) Although the number of wealthy people per area are skewing the results too, according to the article. The wealthier you are, the more you need to remain happy it looks like. Which I guess makes sense, especially if your lifestyle keeps getting more and more expensive too! That just makes me want to vomit all over the place though, haha… I can’t wait until I’m a minimalist millionaire!

Here are the net worths people need in order to feel wealthy, as well:

  • Global average: $1.8 Million
  • U.S. (non millionaires): $1 Million
  • U.S. (millionaires): $5 Million
  • Singapore: $2.91 Million
  • Dubai: $2.5 Million
  • Hong Kong: $2.56 Million

I’m still sticking tight to my $1 Million here too, regardless of the inflation/purchasing power/etc etc that naysayers like to throw out all over the place. If you can’t happily live off a Mil in the bank (or in investments/real estate/etc), it seems like there are other factors getting in the way there. At least for the common person. Which seems to be right on target too according to those results for every other Average Joe! Not that the average joe necessarily knows what’s always good for him or not ;)

Anyways, I thought this new “finding” was pretty interesting and you’d enjoy thinking about it for a hot second. I keep putting all those quotes around this stuff ‘cuz I really can’t tell (or even care?) what surveys are legit and what aren’t these days… All I know is that if you’re happy with your own income right now, or are working towards bettering it as the weeks progress, you’re on the right path at the end of the day. That’s all that really matters. $300k a year would be great, but I certainly don’t need it to fulfill my happiness requirement. I’m just as elated with my $100k+ salary now as I was making $75,000! It’s more about what you DO with your money, than how much you get.

And that’s the word of the day.



[Photo credit: Dan4th]

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  1. interesting December 21, 2012 at 8:27 AM

    Interesting. I make $161,000 on the nose, but here in New York City, that’s pretty middle-class. I think I’d be happier if I made more, but only because I’m planning to retire early and am pumping up my investments as much as I can in order to make that happen.

    1. GaJef February 27, 2013 at 4:45 PM

      You are sure right about that! Actually, I think the middle-class is disappearing. Either you are rich or poor. Wages for many jobs here aren’t that high, ranging from 40K and up depending on your career and I know a few people are still living at home and rooming with at least two other people. NYC is no joke.

  2. Greg December 21, 2012 at 9:38 AM

    Is the $161k per person or household? I skimmed the links but it’s vague.

  3. Lance @ Money Life and More December 21, 2012 at 9:51 AM

    If I made $161,000 in my town in Florida I’d be pumped. I’d be saving like 75% after taxes and would be able to retire in no time!

  4. Mistress Susan December 21, 2012 at 9:52 AM

    I would say to shoot for a net worth of $10M because that is the point where anything after that doesn’t make a difference. In other words, it has been shown that whether you are worth $10M or $100M, your lifestyle is still going to be the same. Robert Frank’s book, Richistan, talks about this concept. http://www.nytimes.com/2007/06/10/books/review/Beam-t.html?_r=0

  5. Warren Talbot December 21, 2012 at 9:59 AM

    When I left my career I was making above $161,000 and felt I was reasonably happy. Now I make ~20% of this and have never been happier in my life. Today my life is filled with travel, exploring the world, and writing. I am following my dream, which is not tied to my salary at all. Of course, I also cut my spending by over 70% which ensured this life was possible.

    I don’t believe that happiness is tied to a number. Instead, for me at least, it is tied to being able to follow my dream each and every day.

  6. Money Beagle December 21, 2012 at 10:30 AM

    I’d be jazzed to no end if I made that much money. I think for me, $120k would be my tipping point. After that, I know I’d be able to save enough to meet every goal as well as have enough left to enjoy things without worry to the degree that I wish (and I’m not talking anything lavish).

  7. Budget & the Beach December 21, 2012 at 10:44 AM

    I used to make around 75k and felt very happy and satisfied, even living in expensive LA. But this past year I made 38k, and it was a struggle…and although I won’t say I was “unhappy,” I definitely was not satisfied by any means with that number…not even close. I think I have a better perspective on things now that I had that and lost it. I can really appreciate 75k that much more. Although I have to admit a lot more would be better, JUST so I can catch up on retirement savings. That’s a practical reason, right?

  8. Jay @ effumoney December 21, 2012 at 11:13 AM

    It is impossible to know what number in either salary or net worth will make you happy until after the fact. If you make $75k now and think $161k will make you happy, how can you know, you don’t make $161k you have no idea what the take home will be as the tax situation changes, you also have no idea what parts of your lifestyle will inflate at higher salary points, everyone always says they will not inflate their lifestyle as their salary or net worth rises, however almost everyone spends more when they make more, and everyone makes their own decisions on what is important whether it be travel, a nicer car, eating out more, big screen TV’s etc… If you make $200k and have found your lifestyle is no different than when you made $161k then you will know $161k was enough. Almost everyone also has their own rationalization to explain why they “deserve” whatever it is they spent more on, and that doesn’t really matter, you never have to explain to anyone why you do what you do if you feel it is the right decision for you. Almost everyone also says they will be content with their current lifestyle even if they had more money, or that they choose frugality regardless of their net worth or income, the reality is most people say that because they don’t have a choice, when frugality makes the difference between saving or going into debt of course frugality makes sense, if you are frugal with $10 million in the bank then you are choosing frugality as a lifestyle, so many people claim they want to be frugal, but more times than not it is not a choice so they run with it.

    The grass is always greener on the other side, when your net worth is $300k and you set a goal of $1 million you think that is what you need and everything will be great when you hit your goal, problem is you are just speculating, when you have $1 million you can then decide if that is enough or if you need to set another goal, the data above indicates that $1 million is not enough. For those with less than $1 million, $1 million is enough, for those with over $1 million now they need $5 million, so it looks like once people hit the $1 million goal from before they were millionaires that they then revise their goal upwards to $5 million. The first million is the toughest.

    I can personally vouch for this change in mindset, when I was younger and in debt I thought the magic $1 million was the be all end all of financial success, fast forward to the present we have a net worth of over $1 million and income over $161k, my current goal is $7 million as I think that will be enough. I know $1 million isn’t enough but I can only know that from having more, maybe $7 million is enough maybe it’s not, if I get to $3 million and keep saving/investing and realize at that point it no longer matters then $3 million was the magic number, however I will only realize after I get there and pass it.

  9. Anne @ Unique Gifter December 21, 2012 at 11:36 AM

    Hmmm. I feel rich but not wealthy. I don’t know that $1M will make me feel wealthy either. I very much agree with Jay’s comment above.

  10. Edward Antrobus December 21, 2012 at 11:42 AM

    $161,000? Wow. Shave that first digit off and we could live pretty comfortably.

    I can see why a millionaire would consider $5 million the threshold for wealthy. With $5 million, I could put it into low-risk income-generating investments and live off the dividends at a decent middle class income.

  11. Matt December 21, 2012 at 11:43 AM

    I think $100,000 would be perfect for me and my wife. I don’t really need much more than that. Just a home, a vacation once a year, and ability to see family each year. I don’t want to live an extravagant life, but a simple one. My investments will eventually make me a millionaire.

  12. Slackerjo December 21, 2012 at 11:47 AM

    I would be leery of a job that paid me that kind of money. It would seem like an on duty 24/7 kind of job. No thanks.

  13. Joanna @ Our Freaking Budget December 21, 2012 at 12:05 PM

    This study makes me kind of sad… it’d be one thing if it were polling the income necessary to be financially satisfied, or to feel financially secure. But necessary for happiness? Everyone says money doesn’t buy happiness, but I guess deep down people actually think it does! Lame!

  14. Levi December 21, 2012 at 12:16 PM

    It is all about what you do with the money. If you have a ton of money but just use it for your own selfish needs you are going to feel pretty empty once the money high wears off.

    I only make $21K but I am a college student living in North Texas. Our cost of living is really low and I have no problem surviving on that much. As far as financially stable I would be happy with $50K, but I like to set my goals in the stars so I am working on making a million a year. My main goal is to take care of my family and friends, give them good paying jobs if they want them, and make life better for all those around me…and that takes a good chunk of change.

  15. SavvyFinancialLatina December 21, 2012 at 1:46 PM

    I am not sure if I would be satisfied with 161K. It would be a nice salary, but between my husband and I are our earning potential should be more. We currently make $100k before taxes or anything, and we are just starting out.

  16. Brian December 21, 2012 at 3:35 PM

    I’m happy with what I make now, so I guess I would probably be happy with that amount… until they asked me to miss important life moments. I know my dad sacrificed some earnings and promotions because he valued time with family more. I know for a fact he only missed one baseball game I played between 5th grade and my last year of high school. He did this because he would rather watch me do that and spend time with me practicing that making money in an office away from his family… So if 161K meant I had to spend too much time away from my family… No deal

  17. debtgirl December 21, 2012 at 7:01 PM

    I would be doing pretty well with that salary.

  18. Gajizmo.com December 22, 2012 at 4:43 AM

    Obviously, as the common mantra goes, money doesn’t buy happiness, but so much of life’s hardships revolve around money that just having it and being comfortable financially will allow an individual to focus on the other things in life that make them happy.
    On the flip side, similar to Mistress Susan, my goal is a very high number. One quote I always appreciated is “Lord, grant that I might always desire more than I can accomplish” by Michelangelo. I aim for a high number, and even if I miss it, I’ll be very comfortable and successful.

  19. Tahnya Kristina December 22, 2012 at 11:25 AM

    Wow $161k would be nice but I am living comfortably with my $85k and I’m happy. Imagine the amount of work involved to earn $161k? I wouldn’t want to give up my personal time for money…been there, done that! Happy Holidays J.

  20. J. Money December 22, 2012 at 2:05 PM

    Thanks for all the great discussions everyone! Happy holiday weekend!!

    @interesting – Wow, what are the odds of that? Maybe you should go play the lottery this weekend and see if that helps with your early retirement plans ;)
    @Greg – Hmmm… I’m pretty sure its per person since it talks about personal happiness and the $75k/salary is compared there, but I could be wrong… Either way it’s something to think about :)
    @Lance @ Money Life and More – Oh yeah! Depending on where you live it could totally do some damage. You’d have more of an advantage over “interesting” up there who lives in NYC.
    @Mistress Susan – I can see that. But as they say, the first million is the hardest! So I’m taking baby steps :)
    @Warren Talbot – YES!! I should print that out and put it in my Blogger Cave :) That is right on the money, sir! Pun intended! You guys have a blessed holiday wherever you are in the world right now, k?
    @Money Beagle – Well the good thing is that it’s more attainable than $161k too! You can certainly get there one day :)
    @Budget & the Beach – “I think I have a better perspective on things now that I had that and lost it.” That’s some pretty powerful stuff right there, actually. And most billionaires at some point have those lows and then regroup and come back even stronger! And appreciate it even more just like you :) So keep pushing yourself over there – it’s just a matter of time until you hit it again and THEN some!

    @Jay @ effumoney – I think you raise some excellent points there for sure, though I’d argue that it’s more about always setting HIGHER goals for you once you reach them, over the amounts of money that would make you happy. Because when you’re choosing a set number at any given time, you’re still evaulating your situation as it currently stands. So my $1 Million for example is what would make me completely content if I were to have it banked by tomorrow. Maybe not in 10 years or whenever I actually *hit it*, but at this given point in time. And then ofcourse I won’t stop there and I’ll keep going because it’s important to keep on pushing yourselfe in my eyes – know what Im saying?

    But yes – overall we don’t know what the future will be like exactly, or how our own priorities/feelings will be, etc. But right now we know what that is so it’s all we can go on :) Btw if you haven’t blogged about any of these topics we’ve been doing here lately, you totally should! Your recent comments could pretty much be copied and pasted into your blog for new articles! Haha…. They really are interesting to read, so I appreciate the time you’ve spent thinking and dropping them. Merry Hollidays, my friend.

    @Anne @ Unique Gifter – No shame in that – it just means you know yourself well :) Or your financial habits, really.
    @Edward Antrobus – Oh yeah. And really it just kills all remaining worries/stress/etc – as long as you don’t increase your lifestyle too much in the process ;)
    @Matt – That’s good that you know your selves well like that :) I would be (and am) very happy with a $100k salary, but I still find myself pushing to grow it higher to get places quicker… where you can then use the money for all types of good! But I agree that $100k should give a comfortable life for most people.
    @Slackerjo – Haha… you’re probably right.
    @Joanna @ Our Freaking Budget – I used to think it doesn’t buy happiness too, but now I don’t ;) Money gives you optoins and freedom which in turn bring lots of happiness. But I think up to a certain point, like that $75k number. For me once I hit that things have remained pretty leve on happiness factor, only I’m even more motivated to keep it going just to secure more happiness for our baby and future babies – wee!!
    @Levi – I like it :) And that’s exactly why I don’t get when people say they “don’t want any more money” than a certain amount, as if more money only brings greed or negative stuff. I’d actually argue the opposite and say if you’re content with only making enough to satisfy your own life, you’re TAKING AWAY from all the good it could do in your community! Money is just as powerful doing good-hearted things than bad stuff… But I digress.
    @SavvyFinancialLatina – I like hearing that! You’re not trying to get complacive and settle for less – you’re going out there and killing it! So keep it up, friend! :) I agree you’ll hit, and even surpass one day, that potential of yours.
    @Brian – Awwww, that is so cool of him!!! And look how impactful that was in your life – you remember the 2 days he was gone just cuz it stood out from all the others! So bueatiful my man… getting me all sorts of sentimental over here :)
    @debtgirl – Well that’s good to know! If you wouldn’t, I’d have a few questions for you, haha…
    @Gajizmo.com – Awesome quote! I like that… and I’ll be stealing it to use later, thanks ;) Happy Holidays!
    @Tahnya Kristina – Haha, sounds good my friend :) You guys have fun out there and enjoy the best day after Xmas! Boxing Day aka my birthday – woo! God bless…

  21. Tony@YODTO December 22, 2012 at 2:58 PM

    I agree with all the Northeasterners here: 161k does not go very far in the NYC area. The difference between 160k and 200k over here is enormous! That said, I have been blogging about how I am about to go from 250k to 150k next year (by choice) and maintain happiness. We shall see!

    Great post!

  22. Cherleen @ My Personal Finance Journey December 23, 2012 at 1:35 AM

    I so agree with you. It is not how much you receive that matters, it’s what you do with the money you receive. Hence, I believe that whether you make $161,000 or not, as long as you are happy with what you do with your money, then the numbers should not matter a all.

  23. Jacob @ iheartbudgets December 23, 2012 at 3:35 PM

    I’d say this is pretty spot on, except my number is closer to $170k (because of IRA phaseout limits) :)

    Though I don’t measure happiness with income, financial freedom is definitely a goal.

    Basically, I need $70k to live on, would max out retirement accounts and fund college with another 30-40k, pay off the house in a few years, buy a truck and a boat (because WHY NOT?!), and then start buying businesses.

  24. J. Money December 27, 2012 at 1:45 PM

    @Tony@YODTO – Cool! I bet you’ll totally be fine too – cuz it’ll be on your OWN terms which is always the most preferable. Great leap!
    @Cherleen @ My Personal Finance Journey – Yep! Exactly… At least in *most* situations. There are certainly exceptions to the rule, but overall I find it to be pretty true :)
    @Jacob @ iheartbudgets – Haha I like the way you think! And once you KNOW what you need for x,y,z, then it’s MUCH easier to set yourself up to achieve them too. ‘Cuz without goals/dreams you’re just hustlin’ for the sake of it!

  25. Canadian Budget Binder December 28, 2012 at 3:22 PM

    Sure the money would be great as long as there is a balance of happiness with my career and on the home front. No amount of money is worth tearing a family apart because you just don’t spend enough time with them. You can’t get back time. So bring it on if I can make that kind of $$$ at 40 hours a week or less, I’m golden!

  26. Kin December 29, 2012 at 4:59 AM

    Certainly, it depends on area of living and also in general, more money would allow more convenience in our life but is it worth it to sacrifice time/effort/health for more money. That is important to think about and each person is different. Bottom line, I think a person can be happy if he knows what “enough” means to him, from a well known story involving the famous authoer Joseph Heller.

  27. J. Money December 29, 2012 at 2:45 PM

    Oh yeah, “enough” is hard to judge sometimes too. And I agree with you too, Canadian Budget Binder – you can never get back time!