If No Less Than Six Figures Will Do, Are We Doomed to Fail?
Experts weigh in
The saying goes "money can't buy happiness," but it seems many would beg to differ. A survey of people in 13 countries finds that the average annual income people said they'd need to be "happy" is $161,000. In addition, according to the Skandia International’s Wealth Sentiment Monitor, Americans alone said they'd need to make at least $1 million a year to feel "wealthy."
Considering the still struggling state of the economy, are we fooling ourselves? As of September, median U.S. household income had dropped to $50,054, 8.1 percent lower than when the recession began in 2007. So could income expectations in the six-figure range lead to a lifetime of unhappiness?
Steve Siebold, a critical-thinking expert and author of "How Rich People Think," says no. If anything, what could be deemed a delusion by some can be channeled into determination.
"Most psychologists in these tough times recommend setting your financial expectations low so you're not disappointed," said Siebold. "This is borderline criminal advice. People need to set their financial expectations high and get excited. If you make $50,000 a year, start thinking about how you can find solutions to problems people are going to pay for that could increase your income to $500,000 or more."
Skandia International also found that one's ideal income differed depending on country: while residents of Germany could happily live off $85,781, Dubai dwellers preferred more than three times that at $276,150 -- a staggering disparity that licensed clinical psychologist Noel Goldberg says may be understandable depending on an area's cost of living. But he says he still advises his patients to define their "happiness" first before wildly (and maybe unnecessarily) wishing for a puffed paycheck.
"Depending on where one lives, $161,000 could be a little or a lot of money," said Goldberg. "But underlying income -- and its association with happiness -- is what the money allows one to do. Can it lead to better vacations, peace of mind, and less anxiety? Many people don't take a step back and ask what will make them happy, assess their marketable skills, or come up with a plan to achieve the financial goals they set. After [you do that], if you can make a realistic assessment, you may not be disappointed or have unrealistic expectations."
Goldberg added, "If you work at a pizza place, are single, have no education, and are barely making ends meet, thinking you need $161,000 to be happy is probably going to be difficult, without a plan. But if having a nice place to live, a reliable car, and a significant other are your goals, then depending on your job, a $161,000 income can be achievable -- although obtaining that mark may not lead to happiness."
Skandia's findings are a noted detour from that of Princeton University's Woodrow Wilson School, which, in 2010, found that an income of $75,000 would make Americans happy -- not the kind of happy that makes you "more jovial in the mornings," but the kind that at least makes you feel like your "life is working out on the whole." In fact, at 85 percent, the majority of Americans surveyed reported feeling happy every day, despite their income.
It's a notably positive outlook that Siebold stands by.
"If you're not happy without money, you're not going to be happy with it," he said.