In the past two years, I have sat down with hundreds of people to discuss their financial lives and one thing has stood out for me. For most people, more money often leads to more problems. I’ve sat down with people who make crazy amounts of money but they are stressed about money more than the poor who live in extreme poverty.
You would assume that once you get that promotion, or once your business starts doing well and your income increases, that your money problems will come to an end. For most people, it’s usually the opposite.
The taste of having more increases ambition faster than satisfaction.
In the psychology of money, Morgan Housel writes,
“The hardest financial skill is getting the goal post to stop moving. If expectations rise with results, there is no logic in striving for more because you’ll feel the same after putting in extra effort. It gets dangerous when the taste of having more – more money, more power, more prestige-increases ambition faster than satisfaction.
In that case one step forward pushes the goalpost two steps ahead. You feel as if you are falling behind, and the only way to catch up is to take greater and greater amounts of risk.”
What I mean is, when most people improve their living standards, they don’t look back to appreciate how far they have come and how well they are doing. Instead, they increase their ambitions of wanting to live on even higher standards. They focus too much on people who are doing better than them and forget about people who are dreaming of the lives they are living.
It goes from affording money for an Uber, to wanting to buy their first car. From buying their first car to wanting to buy a family car. From buying a family car to wanting to buy a sports car. From buying a sports car to wanting to buy a luxurious brand.
And that goes on and on with other parts of their lifestyle including houses they live in, holiday destinations they go to and the schools their children go to.
And just like a moth that tries to circumnavigate the light bulb dies from exhaustion, they too die from running a race they will never win. They die in depression of not achieving their over ambitious goals. They die from stress caused by getting into very high debt despite their high incomes.
Why You Will Never Feel Rich
In an interview with the Financial Times in 2020 ,Ex Goldman Sachs CEO and Billionaire Lloyd Blankfein, claimed that he couldn’t even consider himself rich.
In his exact words, “I can’t even say rich. I don’t feel that way. I don’t believe that way. If I bought a Ferrari, I’d be worried about getting it scratched.”
Lloyd Blankfein was worth an estimated $1.1B in 2015. He’s probably in the top 0.01% of the wealthiest people in the world but still doesn’t consider himself rich.
In his book, Just Keep Buying, Nick Maggiulli describes Blankfein’s situation perfectly when he writes,
“When you regularly hang out with people like Jeff Bezos and David Geffen and look at Ray Dalio and Ken Griffin as your peers, having only $1Billion doesn’t seem like much.”
This is why no one feels rich. Because it’s always easy to point at someone who is doing better. The trick is not to forget all the people who could be pointing at you.”
Knowing That You’ve Got Enough
Kurt Vonnegut, the author of Slaughterhouse-Five, and Joseph Heller, the author of Catch – 22, were once at a party in a fancy neighborhood outside New York City.
Standing in the palatial home of some boring billionaire, Vonnegut began to needle his friend.
“Joe,” he said, “how does it feel that our host, only yesterday, may have made more money than your novel has earned in its entire history?”
“I’ve got something he can never have,” Heller replied.
“And what on earth could that be?” Vonnegut asked.
“The knowledge that I’ve got enough.”
When most people increase their incomes, they think of upgrading their lifestyles. They want more and more without figuring out when they’ll ever have enough.
What very few people do is take time to appreciate the far they have come and control their desires for more. We quickly forget the humble backgrounds we are coming from.
The Values That Really Matter in Life
When most people say that money doesn’t buy happiness, what they mean is that money doesn’t buy values that matter in life. Money can buy the fanciest of cars, the biggest of mansions, the vastest of land, but money will never buy you contentment. Money will never buy you the knowledge that you’ve got enough. Money will never buy you a manual on how to count your blessings and appreciate how far you’ve come in life.
And without contentment, gratitude, and satisfaction, you can have all the money in the world but you will never be happy.
As Ryan Holiday remarked in his book, Stillness Is The Key,
“You will never feel okay by way of external accomplishments. Enough comes from the inside. It comes from stepping off the train. From seeing what you already have, what you’ve always had.
If a person can do that, they are richer than any billionaire, more powerful than any sovereign.”
For what does it profit a man to gain the whole world but lose his soul?