ThinkAdvisor: When Does Money Matter Most?

ThinkAdvisor recently ran a column highlighting a recent study that found a significant link between income and happiness for individuals between the ages of 30 and 50.

This article addresses the link between money and happiness in an interesting way. It points out how during the different stages of our lives, our corresponding level of income and happiness differ. Level of income and happiness seem to have the strongest relationship from your 30s through 50s. Whether it is the increased optionality that this provides in life or other reasons, I don’t know. The authors provide a nice overview of hypotheses.

From an investment point of view, I find it interesting because it brings to light the key concept of maintaining a “safe savings rate.” If your income is high, you can obviously save more (although somehow it doesn’t always work that way), and a disciplined savings strategy during your peak earnings year is as effective to your long-term success as a portfolio income distribution strategy is during retirement.

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