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Is $50,000 Enough To Buy Happiness? What About $161,810?

Do you make less than $161,810? If so, please accept our condolences. According to a new Skandia International poll, that's the annual income you need to be happy. Or maybe it's $50,000, if you believe an April 2012 Marist poll. Or $75,000, says a September 2010 Princeton study. Don't be misled: The role income plays in our happiness is rife with conflict.

Myth 1: Salary = Happiness

If you ask someone how many cookies she's eaten and then ask how happy she is, she'll answer based on the cookies. Same with how much money she makes. It's called the "focusing illusion," and it skews polls like these.
Be happy: The Marist and Princeton polls correlated people's happiness and their income. The new one asked people how much money they would need to be happy—and it was a lot. That goes to show: Take your focus off the money, and suddenly happiness becomes a lot more affordable.

Myth 2: Lifestyle upgrades are life upgrades

"Hedonic adaptation" is a psychologist's way of saying "the novelty wears off." Pretty soon that smart TV you were saving up for is going to become just another thing you own. It's the same with achieving the income you've had your eye on: Your lifestyle adapts, and you're back to wanting more.

Be happy: Focus on experiences—brunches with friends, interesting vacations—and less on actual things. Compared to fancy things, psychologists say, happy memories are adaptation-proof.

Myth 3: Communities are always supportive

The critic H.L. Mencken once wrote that wealth is "any income that is at least $100 more a year than the income of one's wife's sister's husband." Twenty-six years later, economist Richard Easterlin proved that relative income trumps personal income when it comes to happiness.

Be happy: Focus on your own achievements. If you need help (and who doesn't?), try tweaking your social media feed. One person's celebratory tweet can be another's anxiety spike.

Were we once easier to please? Yes. In 1963, 40% of Americans making less than $3,000 a year ($22,000 in today's dollars) declared themselves very happy and 59% of Americans making $15,000 ($112,500) or more said the same. By 2004, only 22% of Americans who made less than $20,000 ($24,300) said they were very happy, as did only 43% of those making $90,000 ($109,400) or more.

[Illustration by Jeremyville]

A version of this article appeared in the April 2013 issue of Fast Company magazine.

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