The more important thing is that HE thinks that he's underpaid. It's clearly something that he's put quite a lot of thought into. I think that ultimately he's looking for a push, or some confidence boost, to approach his boss. So OP, my advice is this: look for a new job. You don't have to get a new job, but you can look. There's really no downside to it. Perhaps after a month you'll realize "damn, I can't find anything without taking a pay cut" and your problem is solved. OR, you'll find a company that loves and wants you for more money. Then you have ammunition (and confidence) to approach your boss.

Thanks for your input. Yes but are you implying that i tell my boss that another employer is willing to higher me for X amount? I feel a little uncomfortable taking that approach.

It's actually done pretty commonly. Usually as a "hey, I love working here and would love to stay, but I have an offer from company XYZ for $X. Is there any way we can work toward that number?" My friend just got a $10k raise in a day doing that last week. Granted, you have to actually have an offer in case they tell you to GTFO.