Getting the GoalPost to Stop Moving (How much do you need to be happy)?

[newwurldmn]

Actually pretty much all the research on happiness has shown that once you reach something in the $75-$100k income range (obviously adjusted for cost of living where you live), those who spend their money on experiences are happier than those who spend their money on things. Obviously each individual has different things that make them happy, so your plan may very well work well for you and I would never try to dissuade you from it. But it's not universal and those who don't share that viewpoint aren't necessarily nihilists/fatalists, they're actually just pursuing the track that has been shown to be more likely to lead to more happiness.

As an alternate way to look at it, I raised my kids on experiences. As they graduate from high school they've traveled around the world, learned how to sail, fly, dive, survive in the woods and the jungle (at least for a few days!) and have a solid basic education and more importantly a huge amount of intellectual curiosity. That's all due to us spending our money on experiences rather than things while they were growing up, or if we did buy things it was things that provide the ability to have more and richer experiences. I firmly believe my children are far better off even if all I cared about was their ability to build and have wealth (which I actually don't) than they would be if I'd forgone all those experiences to save money.

And I don't have a regret in the world for "squandering" my time and resources on experiences. It would be my definition of failure in life to die with lots of money and a bunch of things left I wanted to do, that's squandering the one thing we can't make more of, time. Moreover, I managed to become a successful entrepreneur after 20 years in the military, so I ended up with plenty of intergenerational wealth anyway. What would have been horrible to me is if I had spent those 20 years foregoing hundreds of once in a lifetime experiences to scrimp together what, $500k, only to come to the point later on where that was a completely insignificant amount for me but the loss of 20 years was irreplaceable.

Just another perspective, not necessarily the "right" one because there isn't really a right one.

while studies have shown happiness is maximized at 75k, I believe happiness is maximized at financial security. If your needs are are truly more expensive then the income required to support those needs and maximize happiness will be higher.

while I didn’t agree with my wife initially, we have outsourced so much of the mundane parts of our life like cooking weekday dinner, maintaining our yard and home (inside and outside), and dealing with the annoying parts of managing our kids that we are able to 1. Work maximize our earnings and 2. Maximize the quality time and energy we can exert on the things we value the most.

 

[Sig]

while studies have shown happiness is maximized at 75k, I believe happiness is maximized at financial security. If your needs are are truly more expensive then the income required to support those needs and maximize happiness will be higher.

while I didn’t agree with my wife initially, we have outsourced so much of the mundane parts of our life like cooking weekday dinner, maintaining our yard and home (inside and outside), and dealing with the annoying parts of managing our kids that we are able to 1. Work maximize our earnings and 2. Maximize the quality time and energy we can exert on the things we value the most.

Couldn't agree more on the second part. To expand on the first part, from leaving college to somewhere between mid 40s and mid 60s depending on the person, financial security generally means having enough money to pay the bills, live comfortably, and have enough saved that you're not living paycheck to paycheck and could afford an emergency. And maybe being able to contribute to your IRA/401k. At some point financial security shifts to "can I comfortably live the rest of my life on the money I've saved", which catches you a bit by surprise even if you know to expect it. And even if you weren't on the moving goalposts treadmill before it becomes harder to avoid. Not because you want bigger better stuff but because you start thinking "What if my real investment returns end up at 2% below inflation instead of 2% above? That's another $2M I need to save" or "What if I live to 95 instead of 85? That's another $2M". If you're not careful you can talk yourself into needing at least low 8 figures to feel secure if secure means investing all your money in TIPS and having enough to last to 100.