It’s only a fraction of the millions you dream about.
2 min read
How many times have you thought, If I just made $5,000 or $10,000 more per year, then I’d be happy?
Turns out, a marginal raise like this might be the key to feeling satisfied and happy for some. Psychology researchers from Purdue University and the University of Virginia crunched Gallup World Poll data and found that people reach peak life satisfaction when they earn $95,000 a year.
The researchers determined this by examining self-reported income and life satisfaction data from 1.7 million people across 164 countries. However, satisfaction is different from emotional well-being. If you’re satisfied, all of your needs have been met, but more money might bring more problems.
Individual earnings of more than $95,000 a year are correlated with lower life satisfaction. Once people pass that income threshold, most are able to meet all of their needs and pay off their debt before long. From there, their financial priorities shift toward materialism and keeping up appearances, and their life satisfaction declines.
They also might be less careful with money if they’re not living paycheck to paycheck, causing themselves financial strain that someone in a lower bracket never would have gotten themselves into.
The amount it takes to achieve emotional well-being is much less — between $60,000 and $75,000. Maybe you can’t afford every creature comfort or you have some debt at this level, but you’re more likely to be happy than someone who makes six figures or even millions.
This range encompasses the $70,000 minimum salary that Gravity Payments CEO Dan Price famously began paying his entire team back in 2015. Price based his decision partially on 2010 research out of Princeton University which echoed the findings above — that happiness drops off after $75,000.
Related video: 5 Reasons Why Productive People Are Happier People