FIRE.120 Income Satisfaction Fallacy?

Why do we keep hearing that life satisfaction perception levels off at $75k of income?

What is the core?

Is that research statement related to spending all of your take-home pay?  Are they really saying that having a salary higher than 75k only delivers incremental satisfaction?

I wonder if that amount is a target for a household to live nicely—living from paycheck to paycheck —thereby eliminating the extreme stress of being able to pay one’s bills.  Thinking back to when we were both in college and working (I had three part-time jobs at once, for years) we made far less than $75k, yet we managed to live well, travel, and save.  Even with inflation adjusting, I have to believe our incomes were 20% below that threshold.

Our perspective

On to our professional careers, we made less than $75k starting out and we still lived well and saved.  But when I think about it, we lived in a small 1000 square foot home (still our home) and drive older used cars that work perfectly fine.  Maybe we just didn’t inflate our lifestyle to match the lifestyle of others?  Maybe we didn’t have instragram and facebook (aren’t they the same?) to judge our lifestyle/success against others—other’s glamour posts.

So did our lifestyle increase multiplicatively when our salaries multiplied over the years?  No, it did not, not at all.  Yes, we did grow our spending some, but our home and cars remained extremely constant for a decade at a time.  That in and of itself kept our inflation adjustment quite low and in our control.

Did our not upgrading everything give us a sense of lacking, a sense of wanting?  No, not really.  If we wanted something—needs were always taken care of—we just planned for the want.  We determined the best item for us and then purchased it when the time was right.  We have always been satisfied with our purchases because they were thought out in advance.


So did I feel more satisfaction as our salaries grew beyond the magically $75k.  I’d say with absolute certainty, yet.  It wasn’t a “spending” thing.  It wasn’t an “I make XX amount” statement.  It wasn’t status, or value, or accomplishment.  I think it was the deep-down understanding that we had control of so much of our destiny at any given time.  Even related to a health issue, we had the funds to attempt resolution of such an issue.

I believe part of that comfort is that I personally get an immense amount of satisfaction saving and investing the top portion of my income.  It is the act of putting my money into a protection mode.  I get plenty of satisfaction seeing my net worth—hard placed planning/savings effort—grow and progress.  It’s not the dollar amount, it is by far the freedom of everything that amount may entail for the future.

There is a reason many surveys ask people “do you have $400 for an emergency” or “do you have $1000 saved for an emergency?”  Those amounts may allow someone to resolve an issue before it turns into a crisis, or worse, a downhill financial spiral that can be extremely hard to escape.

So is “satisfaction” the ability to fulfill one’s needs?  Is satisfaction the knowing you can handle an upcoming incident?  Is satisfaction the feeling of working towards an all-encompassing goal?  Then how would you define your personal increase in satisfaction, and can a salary over $75k provide that increase?  In my personal experience, yes, a higher household income increased our ability to progress to all our goals.

No Salary Slant?

Here’s a different take on the $75k life satisfaction analysis.  Our current “salary” is $0, and our “income” has been in the $20k range yet our satisfaction is extremely, magnificently high.

Living a lifestyle that ties closely to your personal beliefs is quite core to feeling purposeful.  A life of purpose seems to present satisfaction.  It’s even possible that a life of leisure—that contained previous amounts of purpose—can provide satisfaction.  It’s entirely possible that if you are intentional in how you live each day that you are increasing (compounding) your life satisfaction. 

Maybe all of this just comes from someone how worked through college degrees, to then develop a career, while living below their income level and taking an opportunity to leave their career to do something different.  In this case, to do whatever we want, whenever we want.  And yes, some of that includes giving to others, because that’s what we choose to do.  That’s how we get our life satisfaction.

So, others have found the same conclusions I’ve come to. Those are some serious high-incomes.

*** Nothing in this article is to be construed as financial advice.  I am not a financial planner, nor do I pretend to be.  You should always consult your own professional when seeking advice. This post is not a piece of literary mastery, just a random thought I had.

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