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Gernot Wagner Headshot

$75,000 Buys Happiness, Twice as Much Buys More

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"Money doesn't buy happiness." Ask anyone who had been slaving away on his desk late last night. Happiness seems to stop going up at $75,000. Make more and you are no better off.

This is only a third of the story.

Double my income today and I'll tell you tomorrow that I am happier for it -- another piece of conventional wisdom. I might get used to my increased riches eventually, but for now let me enjoy the extra cash.

There's another, even more profound complication lurking in the background: Ask me how I evaluate my life overall, and the threshold goes away altogether. More money suddenly does buy more happiness, even for a household raking in more than $75,000 per year.

$75,000 itself, of course, is already high. Two thirds of American households make less. Half make less than $50,000. And that's Americans. Most of the world has a ways to go to hit any kind of plateau.

Even if we moved from our obsession with money to maximizing "happiness," we'll be accumulating quite a bit more stuff for a while.