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How Much Money Do You Need?

Andrew Price
By Andrew PriceJun 27, 2009
Andrew Price
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The answer: just a little more than you have, dammit. As this graph shows, there's a psychological tendency Americans have to always feel like they need just a little more money before they have enough. And this is the case no matter how much money they're making. GDP per capita increased significantly over this period.A big driver in this phenomenon of perpetual striving is that people don't measure how they're doing in absolute terms, they measure it relative to others. And no matter who you are, you can be sure there are people who have more than you.So the bad news: if your personal happiness and life goals are closely tied to your status and wealth you're in for a lifelong tease.But, interestingly, this data could also be marshaled as a case for an extremely progressive tax structure. The smaller the differences between people's incomes the less likely they are to feel this relative status anxiety. And that would apply to people everywhere on the income ladder (except, perhaps, for whoever's in the number one spot). It'd be good for everyone's psychological health to have a more compressed income distribution.What lesson do you draw from this?Graph from a great post on The Oil Drum.

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