$100'000 a year vs happiness
Revisiting the myth that a fat salary will make you richer and happier
For some strange reason many people across the globe look at a salary of $100'000 as a bench mark to be able to tell themselves “I made it”.
Maybe its because humans like round numbers. Maybe its the amount of zeros.
The idea of making $100'000 a year equating to happiness and success is a lie.
Let’s take a look at why:
1. Living in an awesome city isn’t cheap
There are a few common cities where locals and expats alike (can) make the “big bucks”.
New York, San Francisco, Los Angeles, London, Toronto, Dublin, Tokyo, and Sydney make up most of this list.
These are dream cities to most people and for good measure. They’re generally excellent places to live.
Unfortunately, they all come with a big catch. Either the lifestyle of the city or the general cost of living is prohibitively expensive.
Needing a car to get around, go to work and go on a date? Insurance alone will crush your wallet in Toronto.
Want a cool, modern condo in Tokyo? Try $3000 a month for rent. Enjoy your 400 square feet of luxury.
Do you enjoy food, water and shelter? Better have at least $5000 a month in disposable income to be comfortable in San Francisco or Manhattan.
Yes you can make these cities work for much less, but that’s not why people live there. People live in these cities with the intent of truly enjoying themselves.
The struggle is that high earning people in these cities spend so much of their hard earned money just to be happy.
Everyone else spends all of their money just to survive.
2. Big city salaries mean big city competition
It takes quite a bit of effort to get a $100'000 a year job. You likely will have to grind it out in an expensive city for some years before you can make it big.
There’s always someone waiting to take your job and people hoping you slip up to make that easier.
There’s far more to competition outside of work.
Whether it’s the race to home ownership, cool cars, fancy clothes or just about anything else, you will face crazy competition in places you can make a $100'000 salary.
You’re also either too busy or too tired to enjoy the city. As a result, people compare each other on silly things such as who’s BMW has more options.
How does always brutally competing at work and outside of work make you happy? It doesn’t.
People in big cities tend to make more but keep less money.
Not escaping rat race isn’t going to make you happier.
3. The above combined with student loan debt, likely means you have to work most or all of the year
You might get your two weeks in Punta Cana a year but that’s not enough. We deserve more time to ourselves than the standard two weeks per year. A month off work which to some people is a dream, should be the bare minimum time you get to yourself.
Combine tons of pressure to compete at work, outside of work and just trying to survive while paying off debts and sustaining a comfy lifestyle and all that money quickly disappears.
Most people making $100'000 spend so much they save little and invest nothing.
The worst part is they are truly miserable while doing so.
“So what’s the better alternative?”
50/50 time, with side hustle sauce
There’s something interesting about working 12 months a year.
Some people work year round because they’re passionate.
Most people work year round because they’re enslaved.
A slave to looking cool on Instagram, a slave to a mortgage, a slave to a fancy car.
All it takes to free yourself is a slight shift in mindset.
For example, you make $120'000 a year and it costs you $60'000 to live comfortably.
Why not work for half a year and then live somewhere cheaper?
You’ll end up with the same amount of money at year end.
A co-founder of Google and unarguably one of the smartest men in history, agrees with this sentiment.
“The idea that everyone needs to work frantically to meet people’s needs is just not true.”- Larry Page
Simply put, everyone is working for most of the year to pay for things. They work to pay for a car, a mortgage or an expensive rental, clothes, etc.
If you detach yourself from the desire for things, you’d be more free.
Instead of renting out a huge apartment, why not rent a room? It would cost you less and you’ll likely be able to walk away from it without hassle.
Instead of buying a fancy new Tesla Model 3, why not buy an old Prius?
Fear of judgement is what stops most people.
If you weren’t tied down to a mortgage on a house you bought because of cultural pressure, you’d be more free to travel. You’d be more free period.
If you work in a expensive city for six months and save up $30'0000, you can live for six months or longer, without working, somewhere cheaper.
How does six months of relaxing in Bali sound?
Heck, if you’re smart you can even kick back for half a year in Tokyo.
The difference in cost of living can be so huge that you’ll spend $15'000 during those six months and still have another $15'000 left.
Yes, you could have worked a full year in your expensive city and made more. The problem is that city where you earn more also costs you more.
You’ll likely end up with same amount of money at the end of the year or less than if you’d had just lived somewhere cheaper after saving up for awhile.
The funny part is that most people assume they’ll get bored while not working their job. This is time for you to explore your passion, to learn and to heal.
Better yet, if you’d like to start a side-hustle business, you’ll have all the time in the world without any pressure. A bike rental business on an exotic island, or even freelance writing will earn you money.
If you’re smart and you value each minute of your life, you’ll stop trading it for nothing. A $100'000 a year income is great but actually enjoying your life while saving just is much money? That’s so much better.
