AKA your economic “it’s only…” line.
This zone is easy to define numerically : it is the maximum amount of money a person can spend without thinking about it. The maximum amount they can spend without it “counting”. The most they can spend without it meaning they have to go without something else.
For the very poor, this zone is either nonexistent or measured in pennies. That is the root of what makes poverty so stressful. Every purchase means less money for something else. There is no purchase, no matter how small, that can be made without stress and worry.
A pack of gum can make the difference between eating every day or having to skip a day.
Add in the stress caused by a world full of ads exhorting you to buy things you know you can never afford and the acute awareness of how low your status in the world has become, and the fact that you cannot afford any luxuries, and it’s no wonder that poverty and depression are so intimately linked.
They both cause the other.
Moving up the economic scale, you have people getting by on minimum wage income. It’s very tough, and there’s not a lot of money to go around. But small pleasures can be afforded, or rather, the cheapest of everything is no longer mandatory and small high-yield pleasures, like big screen TVs or video game consoles or a trailer for camping, can be contemplated.
But you have no choice but to rent. And your job is humiliating, frustrating, and possibly even depressing as hell, and you too are acutely aware of your low status in society, and how people in your position are held up as examples of the biggest losers in society :
“Do that, and you’ll end up flipping burgers at McDonalds!”
“He came on to me like he was a big shot, but it turns out he’s just a barista at Starbucks. Lame. ”
“Well who are you going to believe, me or some office temp?”
At this point, your Economic Comfort Zone is probably around five to ten dollars. You can get a sub from Subway for lunch every day and it’s not that big a deal.
Things get murkier from here on up the ladder. As income rises, your economic comfort zone grows, and that has the effect of lowering your stress levels because you worry less and less about money and you can afford more and more pleasures to sooth the stress that remains.
Research shows that this begins to plateau at around forty thousand dollars a year. At this point, your economic comfort zone is between twenty and thirty dollars, and that’s enough to cover the basic consumer-level indulgences like shopping, eating out, going to see a movie, and other similar things. Disposable income as a percentage of income has never been higher and that makes you feel good.
It also means that you can afford to buy things which are at the top of the middle class quality scale. This both yields superior results (that $10,000 TV is way better than the $2000 we had before) and assures people in a thousand ways every day that they have the highest status in society and that society is, in most ways, designed by and for people like you.
Past this point, the amount of happiness increase per dollar of annual income decreases, and by the time you reach an income of around one hundred and eighty dollars a year, the curve is nearly flat.
So while the person or family living on forty thousand dollars is twice as happy (or more) as the one living off twenty thousand, the person with an eighty thousand dollar income is not twice as happy as the one at forty, and a person making three hundred and sixty thousand is nearly as happy as the person with one hundred and eighty thousand.
This is highly counterintuitive, because most of us will never get anywhere close to that one hundred and eighty thousand dollar plateau, and most of us have experienced some form of poverty even if it’s the poverty of a freshly graduated college grad or a lawyer who just passed the bar.
And if your entire economic journey takes places between minimum wage and something like forty grand a year, then indeed, the system is true and you do get proportionately happier as your income rises.
So it is easy to think that this progression continues infinitely, and that someone making a million a year truly is twice as happy as the person making five hundred thousand. But research does not bear this out.
And when you think about it, it makes sense. If you ask people what they would do with a large amount of money, the answer invariably involves extravagant large scale purchases.
But those are not what make people happy in the long term. Once your economic comfort zone is big enough to support doing whatever you like on the everyday consumer level, what you have does not change much. Only the superficial quality level. That $10,000 TV might give you way more happiness than the $2,000 model, but the $20,000 gold-plated version with slightly higher resolution and a fancy remote does not produce twice as much happiness at all.
In fact, pretty soon, it’s just the TV. Just like the other one.
But people don’t know this. They reach a certain level of financial success and expect that it will not just make them happier than before, but proportionately happier than before.
And when that doesn’t happen, they feel like something has gone horribly wrong. Maybe they blame themselves, maybe they blame their partner or their kids, maybe they blame the poor, but there must be a problem because they are not nearly happy enough.
Imagine that. Happy, but not happy enough.
If only people could accept that past a certain point, it doesn’t make you proportionately happier and past a higher point barely makes you happier at all, they would know the solution to the “problem”.
But that would mean everything society tells you about wealth and the wealthy is a big fat lie.
People would rather be miserable than face that.
I will talk to you people again tomorrow.