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Can money buy happiness? While it’s a centuries-old debate, research suggests a threshold—a “happiness income”—beyond which additional earnings have diminishing returns on emotional well-being. But what exactly is this magic number, and are you earning enough to live a happy life?
Studies by Nobel laureates Daniel Kahneman and Angus Deaton found that in the U.S., a yearly income of $75,000 marked the point where emotional well-being plateaued. More recent studies, including one from Purdue University, refined this figure, suggesting that happiness peaks globally at around $60,000 to $90,000 annually for emotional well-being and $95,000 to $125,000 for overall life satisfaction. However, these numbers vary based on location, living costs, and cultural expectations.
The rationale is simple: A certain income level relieves stressors tied to basic needs—food, shelter, healthcare—and allows occasional indulgences, like vacations or hobbies. But as income rises beyond the “happiness income,” individuals often face new pressures, such as longer work hours, increased responsibilities, and societal comparisons, which can erode well-being.
Curiously, the happiness income isn’t just about meeting material needs. It’s about balancing financial security and time to pursue relationships, hobbies, and passions. In low-income countries, happiness income tends to be lower because fewer resources are required to meet basic needs. In high-cost regions, however, people may need substantially more.
So, how does your income measure up? If you find yourself below the threshold, remember that happiness isn’t only tied to finances. Building strong relationships, practising gratitude, and prioritizing well-being are invaluable. And if you’re above the threshold but still unhappy, it might be time to rethink how you spend your time and money. Happiness is as much about the quality of life as it is about the quantity of income.
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