Given my family’s background as intellectuals and my own goal to just fit in, my success in generating wealth has left me ambivalent about it. I take seriously the fiduciary duty to my family to continue to make investments that increase rather than diminish the value of our portfolio. I am still just as vicious when real money is at stake in a competitive situation.
But with wealth has come the need to worry about the wealth: the need to fit in with people that I am not sure I fit in with, the need to figure out our obligation to family members who are struggling, the need to face into our responsibility to human beings in general who are struggling, the need to raise kids that aren’t spoiled by privilege.
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Angus Deaton, a professor of economics and international affairs at Princeton University, recently worked with Gallop to poll 450,000 Americans about their state of well-being or happiness. While happiness increases along with annual household incomes up to about $75,000, beyond that, earning more money has no effect on day-to-day contentment, according to the study. These findings were published in the Proceedings of the National Academy of Sciences. Higher incomes did increase the people’s longer-term perception of the direction of their life, however.
This makes sense. As long as food and shelter are at risk, day-to-day happiness is highly correlated with money. But beyond that point, the issue becomes quite a bit more complicated. In addition, the average household income in 2008 was $71,000 (the median was actually $51,000 because of the impact of small numbers of very wealthy families), so doing at least as well as most other people—think my Echo Hill problem—also has an impact.
Above the threshold where money makes the difference between being able to feed, clothe, shelter, and transport your family, the “hedonism” trap comes into play. We work harder to get more stuff to make us feel better about ourselves, only to work even harder to buy even more expensive stuff with the false expectation that money will ultimately buy us happiness, when it cannot, no matter how financially successful we become.
Harvard Professor Tal Ben-Shahar has become famous for his positive psychology and books on happiness. He says:
There is a common misperception concerning the relationship between happiness and success. Much research illustrates that contrary to what most people think, success does not lead to lasting happiness. The opposite, in fact, is the case: happiness leads to success. When we increase our positive experiences, we enjoy a whole range. By raising our levels of well-being we can enjoy more success in our personal lives and in our organizations.
“There is a common misperception concerning the relationship between happiness and success. Much research illustrates that contrary to what most people think, success does not lead to lasting happiness. The opposite, in fact, is the case: happiness leads to success.”
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I, personally, am not ready to throw the towel in completely on being rich, but it certainly isn’t enough to create sustained happiness. And it often comes with a heavy cost (see: “Crash & Learn”). To me, the real issue is about meaning. What really means the most in our lives and how does money relate to that?
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When all you do is hang around with rich guys, you end up in a pretty boring bubble. I thought the guy driving the Porsche was an asshole, and that I too must be an asshole, not really because he was driving an expensive car but because that was how I was defining him and myself. I don’t really hate rich guys. I hate guys who are only rich. And it turns out few are, as much as the false bravado of deal jocks like me would sometimes lead you to believe that were the case.
For me, what cuts through the superficiality of money and toys and greed is the connection created from hearing or reading a true story about another man’s life who has struggled with challenges completely different from my own. My motivation in becoming a writer was to seek out and spend time with guys who I thought were cool or inspirational: athletes, soldiers, scientists, musicians, and inmates.
In my interviews with these guys, money—mine or theirs—rarely came up.
What we talked about was far more important. That’s what I think we all collectively, myself included, forget all too often: that real life is way more important than money in and of itself.
But then that’s pretty damned easy for me to say. The wealth gods have been very kind to me. It’s a hell of a lot harder to get philosophical when they are foreclosing on your house.
If money is overrated as a source of happiness for the top half, it is still profoundly important for those with not enough. And the disparity between the two is widening to the point of collapse. To even the most draconian rich guy, I say the current American way of life is not sustainable if the majority of people have no real chance.
Just listen to Jon Stewart:
Fixing the education system is easier than hoarding gold, securing a food source, and stashing weapons against a coming class war, about which at least a couple of my craziest wealthy friends are quite serious.
I am not going to pretend any of this is easy even to talk about. It’s hard for me to get much clarity on even my own ambivalence about wealth. But it’s time to break the silence. Until we do, we are all operating under a system that looks more and more like a third-world country where all the money is in a few hands, and those few suffer the delusion that it alone will make them happy.
One could certainly ask the question: isn’t speaking the truth about money not only part of being a happy man, but being a good man too?
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Money photo: borman818/Flickr
Graffiti photo: FOUND by ansahe onyslio
“…the brutal facts of the growing inequity of wealth distribution…” Objection your Honor! I’ve yet to see ANY “distribution” of this nations wealth. Was I born into a world where zillions were already settled somewhere? Yes! Is there anything I can do about where the dollars settled after my birth? Yes! The day anyone distributes free-market wealth in the USA (beyond welfare etc), I’ll move to Italy where they are already proficient at the game. (I know “distribution of wealth” is a catch-phrase for a sense of economic and social equity, but I just wanted to drive home a point… Read more »
guess I’m banned now.
Oh well. Probably for the better.
But Tom, haven’t you been paying any attention? It’s all just a myth that the evil patriarchy forces upon us.
Here are two articles that get some much needed perspective on the whole money obsession:
http://www.brightmillionaire.com/articles/opinions/money-is-not-everything-bull
http://www.brightmillionaire.com/articles/opinions/money-myths
Men caring about being rich (having status and power and coming off as “providers” to women is paralleled in our evolved psychology by women caring about being beautiful. Bottom line, it’s about appealing to the opposite sex. Lamenting our evolved adaptations is silly.
” Lamenting our evolved adaptations is silly.”
And yet, you still took time to read and comment on this ‘silly’ article.
As soon as you make money, and lots of it people get jealous. Two partners and i have created over 120M in income, in the last 16 months with oilfield related investments. People just assume this comes with no work. Everyone can create somthing from nothing if you want it bad enough. And i get constant comments about how i just throw money away. If i make it i’m gonna spend it, just like anyone else.
Interesting mind-trip especially regarding your own self-awareness about your own want or desire to be rich. It is a very nuanced and layered issue. Thanks for sharing.
What a GREAT article! I have always said that most women have a “love-hate” relationship with money, but now you’ve spilled the beans for me… men do, too! Even financially successful men. I appreciated the honesty with which you were able to sort through your own feelings about money, including the judgment placed on others who might be not so different from you. It has always struck me that prejudice against the rich is a great way to keep ourselves stuck in not-so-empowering financial positions ourselves, since we tend not to move towards that which we despise. As you said… Read more »
You description of the “family shareholders” is so funny…My neighbor is dating a guy from a wealthy family (oilfields in Texas!) but it seems that all he does is play golf and constantly drunk call her….Charming, ay? She broke up with him for 9 months and then he won her back with a huge diamond ring…I don’t know him that well but it seems that he just thinks people are just his little playthings to entertain him…
Great article…Thanks for digging deep!
The truth of this recession is not just one issue there are many things that have taken place. Just like many things take place to create wealth there is also the other side of the coin. All of the people’s actions, the government, the laws and mentality are what has brought this country down. People don’t want to worship god anymore and they expect to be wealthy. The government is doing a horrible job at protecting civil and religious liberties. Socialism is creeping in from under the door due to stupid choices that have been made by our liberal leaders.… Read more »
Tom, thanks much for having the guts to talk about this (and I’m sorry that I missed it when you first wrote it). I think it’s really one of the most important issues our country faces, and it’s kind of astounding to me what a blind spot people really have about it. You’re completely right, of course, that money does buy happiness up to a certain point – the point at which you can pay the bills and have enough left over to do some things that mean something to you, and hopefully put away a little in savings against… Read more »
I think rich people don’t even realize how lucky they are.
I think rich people feel like martyrs.
Agreed. I’m pretty sure that it’s been established the the rich almost always underestimate their wealth. You see it very often with rich people who are in 1% who do not feel they are wealthy.
I’m a musician. Well, I’m really a musician, artist, writer… but I don’t really get to do it much. I spend most of my days in severe depression. I went to college – two of them in fact, and I’ve been employed during the entire economic crisis. Most days, I see my income – 66% of it after taxes – going out the door so fast I have just enough to buy groceries and gas for my car to get to work. I have one luxury – a cell phone that’s far removed from the top of the line, gotta… Read more »
This article reminds me of when I was a kid and tried to keep all the cookies for myself. I told my little brother that the cookies were bad. They tated awful, you wouldn’t want any, you’re better off without them. They have raisins in them (I said, even when they didn’t have raisins), and you don’t like raisins. Never seemed to work….
The problem with Americans in general is our shortsightedness and our microcosm view of the world. If someone earns $40,000 annually, do you realize they are in the top 3% of the wealthiest people worldwide? The World Bank reports that 85% of the worlds population earns less than $2100 annually with over 50% earning less than $850. The sheer amount of poverty in this world is staggering and the best Americans do is complain about what they don’t have. We have completely lost sight of our fellow man, viewing their problems as being “over there”. The idea of money making… Read more »
“The problem with Americans in general is our shortsightedness and our microcosm view of the world. If someone earns $40,000 annually, do you realize they are in the top 3% of the wealthiest people worldwide? The World Bank reports that 85% of the worlds population earns less than $2100 annually with over 50% earning less than $850. ”
I see your point. It’s a good one. I would point out that the situation looks a tiny bit better if you factor in the cost of living. A thousand bucks goes a lot further in some places than others….
Chopperpapa,
I’m a little confused. Are poor people unhappy with their lives or not? If pursuing money does not make one happy, then does that mean poverty is liberating? Presumably those who are poor also waste their lives chasing the dream about having more. If rich people are being punished by their own wealth, then it sounds like the system is working just fine.
Well done, Tom. Great insights and raw honesty.
I think that the principal reason men want to make money and be rich is to be able to attract beautiful women. If there were a society where the women disdained security and privilege, then the men in that society would be much less interested in wealth and money, as a matter of course. If there were a society where the women were obsessed with pomegranates, say, then the men of that society would strive to accumulate, plant, and hoard pomegranate trees and fight each other over them. And, conversely, women are overly focused on their beauty in order to… Read more »
Everyone wants to be rich. Some people are born into wealth or luck into it. Many others work hard or smart and to earn wealth and then there are scores of others who don’t want to put forth the effort required to become rich and instead whine about the wealthy. I have zero respect for the whiners. Most of the wealthy do pay their taxes honestly and in fact pay far more in a year or two than most of us will ever pay in our lifetimes.
And another: http://www.telegraph.co.uk/news/uknews/7493521/Kwik-Save-tycoon-gives-up-riches-in-pact-with-God.html
Granted, he’s a pretty old dude, so it’s not quite the same, but still…
Anonymous male, ask for a multimillionaire to give away his fortune and you shall receive.
See here for more details: http://digitaljournal.com/article/287885
Google the name Karl Rabeder for more info.
I applaud you Tom for writing this article and addressing critical issues about wealth at a time when people would rather fight and blame each other than learn. Its instructive that making more money increases happiness until we reach about $75,000/year. From my experience working with addicts, people who continue to want “more” even though it doesn’t make them happier and in many cases makes them more unhappy, is an addiction. Most people understand that drinking more than is good for you and continuing to do it despite the problems it causes, is an indication of alcohol addiction. Few people… Read more »
Great personal reflection on a very thorny, murky subject. It’s Maslow’s Hierarchy of Needs. If you’re worried about surviving, you don’t think about personal fulfillment. You think that money will solve your problems, because it will — it will buy you food and shelter. If your basic survival needs are well accounted for, then and only then do you have the luxury to think about whether or not money makes you happy and/or what good things you can do with the money you have. I was married to a very rich and VERY ruthless man and was miserable. I left… Read more »
If any man feels that his enormous wealth is a huge burden, that the pursuit of money has not been worth the hassle, he can always put his money where his mouth is and give it away. If your wealth has spoiled your life more than helped, then get rid of it. When someone complains about the downside to something but still holds onto it, I find it hard to believe that person. I’m calling the bluff that it’s more trouble than it’s worth.
Post like this make me glad not to live in the U.S. It’s lousy education system which tilts the playing field so heavily against the less well off is a disgrace. I’m happy I live in a country where equality of opportunity means a something more than it does in the US of A. I’ve spent many years chasing the money too. It’s not all its cracked up to be. Yeah, the six figure job is nice and working with the real wheeler dealers of society doing the multi billion dollar deals is interesting, but not very fulfilling at all.… Read more »
Money doesn’t have to be part of the equation.
http://www.thevenusproject.com/a-new-social-design/resource-based-economy
humblebrag.