Earn $75K, Be Happy? It Depends.

Now that the recession has been declared officially over, it's time to focus on being happy.  Time magazine reports on a Princeton study about wealth and happiness, and concludes that $75,000 per year looks like a rough pivot point in the balance: "At that level, people probably have enough expendable cash to do things that make them feel good, like going out with friends."  There's a lot of academic research on the subject (check out Stumbling on Happiness, by Harvard professor Daniel Gilbert), but it all seems to point to what your parents told you growing up -- friends, family, and health are way more important to happiness than money.  Here's an international take on that homespun wisdom from SmartMoney:

And what do we find from large-scale, international surveys of life satisfaction? According to two new working papers from John Helliwell and Christopher Barrington-Leigh, economists at the University of British Columbia, we find that money matters to happiness — but not entirely in the way one might think. Money does matter quite a bit when it comes to the difference between poverty and Western levels of prosperity. The difference in happiness between Denmark and Zimbabwe is large, and it’s mostly (though not entirely) explained by per capita income.

But once you’ve reached a level of prosperity such as that in the developed world, income starts to pay diminishing returns. For instance, in Ireland, according to Gallup, 97.5% of people report having a network of friends they can count on; in France, this number is a bit lower, at 93.9%. The difference that living in a country with an Irish level of having friends makes in happiness, though, as calculated by Helliwell and Barrington-Leigh, is equivalent to roughly a 20% boost in income. Similarly, they’ve found by looking at data from the Canadian General Social Survey, feeling like one “belongs” to one’s community, province, or country can have a much bigger impact on happiness than variations in one’s income.