$526,000 a Year for the Intangibles That Make You Happy?

If we add up all the studies that put a price tag on the intangible sources of happiness, it's a lot—but is it enough?

Updated:

$50,000

+$15,000 for a Worse Fit

I wasn’t earning as much as I would have liked, $50,000 a year, so I decided to change my job. I accepted an offer from the Nigerian Natural Petroleum Corporation (NNPC). 

While I had no interest in the oil industry, the role was pretty slick. I got to do lots of analysis work, which I enjoy and excel at. It’s only four days a week. And they promised me autonomy.

Though the job aligned 25-30% less with my interests compared to what I did before, the increase in my salary to $65,000 made it an acceptable trade-off.

According to the ‘Populace Insights The American Workforce Index’ (PDF), an increase of 33 points in “achieved-ideal work score” is associated with a 0.84 rise in current life evaluation on a 10-point scale, an effect roughly equivalent to a $15,000 to $25,000 income bump. 

$65,000

+$35,000 for Less Personal Time

I performed so well in my first few months with the NNPC that management asked me if I could work five days a week instead of four. That meant giving up my Fridays, which I spent playing beach volleyball, hanging out with my wife, and blogging. They won me over with a 50% raise.

From Todd Rose’s book, Cognitive Illusions, “Populace [the think tank Rose founded]’s research has shown that when we spend 20 percent more time accomplishing things we find personally rewarding—gardening, playing with our pets, making music, spending quality time with our kids and grandkids, enjoying chocolate ice cream instead of someone else’s preferred vanilla, you name it—the improvement in life satisfaction is the same as if we have been given a 50 percent pay raise.”

$100,000

+$3,000 for No Satisfaction from Volunteering

Because of all this extra time working, I struggled to squeeze in my monthly volunteering at the local YMCA. When I brought this up with my boss, she suggested I not over-extend myself. She offered me an extra $250 monthly salary as an incentive to give up volunteering. I accepted.

Daniel Fujiwara et al report in ‘Measuring the Social Impact of Community Investment’ (PDF) that the uplift in life satisfaction from volunteering is worth approximately £2,357 per year. 

$103,000

+$9,000 for Less Trust at Work

The NNPC reassigned me to a similar role in the top-secret “Political Relations” department. I can’t give you more details about it. My new colleagues were super competent, but also shady. I missed the friendliness of my old team. But I got a $9,000 raise, which made up for it.

Johannes Orlowski and Pamela Wicker write in ‘The monetary value of social capital’ that “on average a one standard deviation increase in interpersonal trust (people’s fairness) is worth an extra €7,913 per year in terms of foregone income.”

$112,000

+$63,000 for Worse Sleep

I had to be on call 24/7 in my new role. My sleep quality plummeted. On the bright side, I got a $255,000 bonus! I had to earn it out over four years, so it effectively increased my salary to $175,000.

A 2017 study by Nicole Tang from the University of Warwick found that improving sleep quality can be as beneficial to your health and happiness as winning a  jackpot of around £200,000. (Press release and link to paper.)

$175,000

+$40,000 for a 20-Minute Longer Commute

I finally got the dreaded but anticipated call a couple of months later: 

The NNPC wanted me to relocate to Lagos. No more working remotely from home. 

They lined up an apartment for me and my wife, subsidizing my rent so we’d pay the same as back in Canada. But now I had a twenty-minute commute. They gave me a 23% raise to compensate, which felt fair. 

A study by the UK Office of National Statistics found a 20-minute increase in commute time has the same negative effect on job satisfaction as a 19% pay cut. Summary here.

$215,000

+$63,000 for Worse Sleep

The part of Lagos we moved into was wealthy but a lot sketchier than our old neighborhood. Armed guards, electric fences, no walking at night. HR offered me $20,000 in annual “danger pay” to compensate. 

According to Daniel Fujiwara et al’s 2014 report, ‘Measuring the Social Impact of Community Investment’ (PDF), not being worried about crime is worth on average £11,873 a year. 

$235,000

+$41,000 for Not Seeing Friends and Family Regularly

We made some new friends in Lagos, but only saw them about once a month. This marked a sharp decline from seeing friends and family regularly back in Canada. I brought up this concern with HR and they were kind enough to offer $41,000 in additional annual compensation. Crazy to think that’s 80% of what I used to earn.

Nattavudh Powdthavee’s 2008 paper, ‘Putting a price tag on friends, relatives, and neighbours: Using surveys of life satisfaction to value social relationships,’ calculates that meeting friends and relatives once or twice a month is worth as much in well-being as earning £57,000. But seeing friends and relatives most days is worth £85,000, a boost of £28,000. Full paper here.

$276,000

+$35,000 for No Exercise and Worse Health

I couldn’t find the time or space to play sports or work out anymore. To offset this, my boss and I worked out an annual $5,000 “wellness” bonus for me.

The money covered massages and physio but didn’t help my fitness. I went from being decently healthy to not being in good health. When I requested a lighter workload so I could get back to working out, HR countered by offering a $30,000 raise. I took it.

Fujiwara et al, whose report I linked to above, estimate that being in good health is worth about £20,141 per year and doing frequent moderate exercise can valued at around £4,200.

$311,000

+$20,000 for Reduced Healthy Life Expectancy

My friend, who’s a doctor, told me my current lifestyle would likely cut my healthy life expectancy by three years. This stressed me out. My boss found out and bumped my salary up an extra $20,000 per year to make me feel better. 

“A hypothetical intervention that increased life expectancy by just one year at birth is worth $118,000 to the average American—but an extra year of healthy life expectancy is worth $242,000,” writes London Business School economics professor Andrew Scott. That’s a difference of $124,000. 

$331,000

+$200,000 Bonus for Unhappy Separation

My wife passed her breaking point. Her social life was way worse than before and I was hardly ever around, less fun when I was around, and getting rounder and rounder. So she moved back to Canada. 

Being separated sucked. I decided to follow my wife and try to win her back. Word of these plans somehow rose the higher-ups at the NNPC. They dangled me a $200,000 bonus to lure me into staying. I bit.

Powdthavee’s paper finds that being separated is as detrimental to one’s well-being, on average, as losing £139,000. 

$331,000 + $200,000 Bonus

+$85,000 for Not Being Married

My long-distance attempts to resuscitate my marriage didn’t work. We got divorced. Being single was lonely, so I worked harder than ever, earning a $75,000 raise. I felt extra flush and free to live up my bachelorhood during my precious hours off.

According to Powdthavee’s paper, after someone is divorced, the pain of separation fades and their well-being reverts to that of a single person, on average. But being married is better for well-being. It’s worth about £51,500. The paper doesn’t elaborate on whether having two spouses is worth double. 

$406,000 + $200,000 Bonus

+$220,000 for Becoming More Neurotic and Less Agreeable

I took a personality score for the first time since joining NNPC. My levels of neuroticism had gone up and agreeableness had gone down, both by about five percent. I could feel these changes hurting my day-to-day well-being, and considered therapy. The NNPC saw things differently. They felt I was “moving in the right direction” and promoted me. Along with the promotion came a $220,000 raise. 

From the 2012 paper, ‘Is Personality Fixed? Personality Changes as Much as “Variable” Economic Factors and More Strongly Predicts Changes to Life Satisfaction’: “[O]ur results suggest that a one standard deviation change in openness to experience is associated with approximately the same change in life satisfaction as would a AUD $61,000 (*USD $62,000) increase in annual household income. The dollar values for one standard deviation changes in the other personality traits are as follows: Conscientiousness—AUD $91,000 (*USD $92,000), Extroversion— AUD $222,000 (*USD $225,000), Agreeableness—AUD $147,000 (*USD $149,000), Neuroticism—AUD $309,000 (*USD $314,000). The average annual household income is around AUD $87,000 (*USD $88,000).” According to their calculations, standard deviations represent roughly +/- 0.4 points on a 7-point scale. The average participant scored 5.25/7 on Neuroticism and 5.38 on Agreeableness, so a 0.4 jump represents a 7-8% increase.

Related: In Transcend, the New Science of Self-Actualization, Scott Barry Kaufman writes that, “psychotherapy is at least 32 times more cost-effective in raising life satisfaction than nearly gaining more income.” He references Money or mental health: The cost of alleviating psychological distress with monetary compensation versus psychological therapy, which finds that “psychological therapy alleviates psychological distress by one and a half standard deviations at a cost of £800 over 4 months.”

$626,000 + $200,000 Bonus

-$576,000 and -$200,000 to Go Back?

Now I’m making more than twelve times as much as I used to. For all that I’ve had to sacrifice, I’m using this money to compensate. My well-being remains high. Honestly.

Even so, I’d be lying to you if I said I don’t miss a lot from my $50,000 life. I wonder: Could I find other ways to make this much money without making so many trade-offs? Do I need to? 

I’ll reflect on it during my next vacation at Amangiri.

Me and my wife happy with all of the intangibles but less money.

What Are Your Trade-Offs?

Consider scanning back through the studies and examples above and asking yourself:

  • How much worth of intangibles are you sacrificing for the sake of salary?
  • What intangibles do you enjoy that you might be undervaluing?
  • What intangibles could you pursue that might give you a greater well-being boost than a major raise?

Alternatively, pick apart the admittedly flimsy methodology of valuing intangibles to save yourself from having to make “costly” decisions.

About the author

👋 I'm Chris. Everything you read on TheZag.com is my fault. This site is like a gym for your comfort zone, full of challenges to make your status quo sexier. Join my 'Consider This' newsletter for a fun new challenge every 10 days. Try it!

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