“Like the elite of ancient Egypt, most people in most cultures dedicate their lives to building pyramids. Only the names, shapes and sizes of these pyramids change from one culture to the other. They may take the form, for example, of a suburban cottage with a swimming pool and an evergreen lawn, or a gleaming penthouse with an enviable view. Few question the myths that cause us to desire the pyramid in the first place.” Yuval Noah Harari, Sapiens
The acquisition of wealth is one of the primary driving factors of many people’s lives. It seems to be a given that we should pursue more money.
And yet we do not often pause to contemplate the true sources of our drive for wealth, or precisely what we are trying to achieve. Very often we are so engrossed in how to acquire more wealth, that we rarely ponder why we should acquire more wealth.
This post attempts to discuss this problem, and specifically answers these questions from my personal perspective. I hope some of the content is useful to you, the reader, as you think about the function and role of wealth in your life.
1. What does the data tell us about happiness and money?
You’ve probably heard the phrase “money can’t buy happiness”. This is not entirely true.
There are studies that show that the higher income people have, the less negative emotions they experience (example). (While happiness is not the mere absence of negative emotions, having less of them certainly goes a long way!) This example is in the US and so naturally, the exact impact can depend on a number of socioeconomic factors (E.G housing price). It makes sense that this would translate in one form or another to other cultures and places. However, the correlation disappears at an income of about $200 000 USD per year, and the gains drop rapidly after $90K to $100K USD / year.
So in summary: Money can improve well-being, but the improvement has diminishing returns, and drops off entirely at not particularly high incomes.
We shouldn’t tell ourselves that money can’t increase happiness or well-being. Nor should we be taken in by the idea that this effect scales infinitely.
2. To seek money is to seek a feeling
“Everything we do is for the purpose of altering consciousness. We form friendships so that we can feel certain emotions, like love, and avoid others, like loneliness. We eat specific foods to enjoy their fleeting presence on our tongues. We read for the pleasure of thinking another person’s thoughts. Every waking moment—and even in our dreams—we struggle to direct the flow of sensation, emotion, and cognition toward states of consciousness that we value.” Sam Harris
When we strive to acquire wealth, we are often convinced by the story that if we just manage to get more (more money, more assets, a better house, a nicer car, etc.) that we would finally be satisfied in the present and have licence to enjoy this moment and be happy.
Acquiring wealth is the attempt to alter many future moments of experience. E.G by owning a house we hope to repeatedly bump into the fact that we own and live in this beautiful house in the future. We want the future of our life to be enriched by the experience of having wealth continuously. Implicitly or explicitly, this is ultimately what we are seeking — an alteration in the flow of our future conscious experience.
However, like many things we do in an attempt to be happy, the acquisition of wealth is deceptive and of only mixed effectiveness. The satisfaction that we feel from acquiring wealth fades.
Thus, my second point is: The satisfaction that comes from acquiring wealth will diminish. So I argue that we need a deeper philosophy than merely “I should get more”.
Perhaps a better starting point of this philosophy is exploring the topic of what is enough for you? How much wealth are you trying to acquire and why?
3. How much money do I need?
Imagine that there were a magical button that you could press, and upon pressing it, you will receive as much money as you genuinely want, but no more than that. Imagine further that this money is only to be used for your own well-being, and cannot be given away altruistically.
When you pressed that button, how much money would you get?
Well, probably not $30 trillion.
And $1 trillion would A) Be functionally no different from $30 trillion for you, and B) Still be way too much.
So how much would it be really?
I’ve spent time thinking about this question in my life. What are my goals? Why? What lies underneath those goals?
For me the answer to these questions is “enough to purchase assets that result in a passive income roughly equivalent to my current working income”. Or in other words, “enough to make me work because I want to, not because I have to”. Returning to point #2, seeking money is seeking a feeling; which feeling are you trying to have? For me the feeling is the freedom of mind — the knowledge that my lifestyle is established and my time is truly mine and I’m truly free to seek out any creative pursuits that I’d like to.
As it turns out, my favourite creative pursuit is to build great organisations — so it’s unlikely I would functionally be doing anything different before / after achieving this goal, but the background mindset would be different.
4. Is the grass truly greener?
Imagine after a period of time (say 20 years) that you achieve your financial goals and you’ve finally “arrived”.
Would you then look back at the previous 20 years and realise you spent all of that time yearning for this day to arrive, and thus missing out on many moments of possible joy and satisfaction?
Hopefully not! And that’s why it’s super important to enjoy the journey.