How Much Income Is Enough For You
The reason why you would never feel fulfilled
Two psychologists and economists, Kahneman and Deaton, conducted a survey of 1000 US residents and saw that beyond an annual income of $75,000, there was no extra gain in happiness level. They stated “higher income is neither the road to experience happiness nor the road to the relief of unhappiness or stress”
Easterlin Paradox also stated earlier that economic growth did not accompany more happiness. On an individual scale, more success did not generate more happiness in a person’s life.
What are the reasons that we never feel fulfilled no matter how much successful we become?
#1. Hedonic Adaptation — our happiness will soon fade away
A study of the relationship between happiness and success using data on the happiness of 7,812 people living in Germany from 1984 to 2000 from the German Socio-Economic Panel, claimed that 65% of the positive effect of an income gain dissipates within 3 - 5 years.
The most common evidence of hedonic adaptation is that a controlled group of lottery winners report their happiness level roughly goes back to the original set point after the novelty of the winning experience passes.
In brief, this theory implies that people have a tendency to go back to a set point of happiness despite crucial success happening in their life.
#2. Social comparison kills our sense of happiness
Let me tell you about an interesting experiment on a group of Harvard students who were asked the questions:
“Suppose you were asked to choose between living in two imaginary worlds, in which prices were the same:
- In the first world, you get $50 thousand a year, while other people get $25 thousand (average)
- In the second world you get $100 thousand a year, while other people get $250 thousand (average)
How would you vote?”.
Yes, you are right! A large part of the group chose the second world. People are willing to have a lower standard of living as long as they are the ones who have the highest income level.
“So long as the comparison is distinctly unfavorable to himself, the normal, average individual will live in chronic dissatisfaction with his present lot” — Veblen, The Theory of the Leisure Class
I believe no matter where you are on your success ladder, you would never feel satisfied as long as you keep comparing what you have to what other people have. It’s like poison to your peace and happiness.
#3. Aspirations are filled in a bottomless container
The economist Easterlin finds out that success - growth is actually not the cause of happiness level but rather the growing aspirations cause people less happy/ not happier with their current state of success.
Another economist, Layard, also runs a test on an actual income and the number of hours watching television, he finds that the more a person watches tv, the poorer and less happy he/she feels. This problem of advertising is also an explanation why Sweden forbids advertising to children. He then concludes that many advertisements these days make people feel that they need more money than they should.
Because what we want is limitless, there’s no way the increase in our happiness level will ever be able to catch up with the increase in our aspirations.
But aren’t there any other ways to increase the level of happiness?
I believe happiness is not a sense of euphoria, excitement, or mere pleasure, but it’s something deeper, larger, and more meaningful than we think. We don’t need more “happy moments” to increase our level of happiness because it’s not something we have to fight for, it’s already within us. All we need is a little awareness of all moments, you will surprisingly see that all the conditions for happiness are already in front of your eyes.
“Don’t think that happiness will be possible only when conditions around you become perfect. Happiness lies in your own heart.”
“You are what you want to become. Why search anymore? You are a wonderful manifestation. The whole universe has come together to make your existence possible. There is nothing that is not you. The kingdom of God, the Pure Land, nirvana, happiness, and liberation are all you.”
— Thich Nhat Hanh —
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