We have such a skewed view of money in our society, it is just crazy. I reworded my title on purpose, because this version also applies. Like with everything else, there is a balance to be struck that lends itself to happiness. There are no guarantees in life, we all know that. Having tons of money doesn’t absolve you of problems, in fact in many cases is means that you’ll have a whole new set of problems on your hands. Being flat broke all the time is no picnic either; and living paycheck to paycheck is like perpetually walking a tightrope. One little slip up or gust of an unforeseen wind and down you go.
I have never been obsessed with the idea of being rich. Maybe growing up a farm boy in rural PA had a lot to do with that. I was active in sports, but I didn’t see a path to superstardom and wealth that can come hand in hand, so maybe I just assumed I wasn’t destined for a second home in The Hamptons. Hard to say. As I grew older and moved to AZ, my lifestyle changed drastically, but I wouldn’t say my view of money did. We went from farm folks to lower middle class to middleclass in a very big city. My grandfather retired early, able to cash out on a business that allowed him and my grandmother to have two homes and travel quite a bit. I thought they were rich, but obviously this is a sliding scale.
As I progressed through life, I met many different people and some of them were very wealthy. I saw a pattern of those who wanted to be seen as wealthy were not as rich as those who tried to hide that fact. Two of the people with the most net worth I have ever met wore the same t-shirt and shorts to every racquetball lesson I ever gave them. Others not in the same income bracket drove up to the racquet club in their leased Range Rover or Jaguar, parking as close to the front door as possible for all to see how they had “made it”. So it begs the question, what is the right approach?
Only you can decide that for yourself, but I can share my thoughts and experiences on the topic to maybe help a little. According to this study by Princeton University, there is a “sweet spot” that you can aim for. In this study, the happiness quotient hits it peak at $75,000 a year in earned income. At this level of household income, you can afford reliable, fairly new vehicles, a nice house in a decent neighborhood, and have “discretionary money” to spend on a vacation or two a year. This is the foundation of a happy life by comparison to most, but it does not mean that you are guaranteed to be blissful every day. And doubling the income does not make you twice as happy according to the study either. You can be happy or miserable regardless of the amount of money you earn.
Think about it this way; if you bust ass all year long, working two jobs but never see your kids or spouse, you are probably not enjoying life. If you start a company and pay yourself $250K a year, but never get a break from it, are you really living life to the fullest? Many people work a job they hate just to fund the lifestyle they live. My question to them is: WHY are you living that lifestyle? Are you doing it for you, or because you think this it the image you should project to show you are successful. If you live for the weekend and dread Mondays starting on Sunday night, you may want to reevaluate your priorities. Do you need a house that big? Or a car that cool (expensive?) NO, YOU DON’T. You WANT these things, but you do not need them. If you are paying more than 20% of your annual household income on car payments, you are not rich, you are flashy. If you don’t use every room in your house on a regular basis, you bought more house than you needed. And don’t give me that “real estate is a great investment” bullsh*t argument. If you are living in the home, it is your house, not an investment property. If you are house poor now, you are not winning the game. And another thing, it’s only a good investment if you time your sale of the home right based on market conditions. Plenty of people have lost a lot of money trying to play this game. Live more frugally and give your monthly budget a chance to include savings and investing as well.
On the other end of the spectrum, if you only work part time because you are lazy, you are making yourself vulnerable to the world. If things change, such as a pandemic hits, you are one of the first to suffer, and you will likely suffer the longest. You likely haven’t built up enough financial reserves to weather that storm. If you are a server in a casual dining restaurant or bar, that is hard work and a decent job…until you are in position to get a better one. Do you really want to be a server forever, or are you just coasting along now? Yes, the lifestyle is a good one, but there is not much security in this. Do you want to get married, have kids, buy a house, etc.? If so, better start upgrading your skill set and get more marketable.
Money does not buy you happiness, and choosing a happy, leisurely lifestyle over making decent money are both misnomers in my opinion. There is a sweet spot to aim for, and it is incumbent upon you to find it. If you really want to take matters into your own hands and set yourself up for a happy life, you need to look long(er) term and plan accordingly. Find a career that pays the bills. Strive to find a job within that career that you at least like. You may not love it, and it is called “work” for a reason. But if you can again find that happy medium, you will be much better off. Get your personal finances in order, and take one of the biggest stressors in life off of the table. As a personal example to share, my wife and I debt free except for our house, and we are closing in on having that paid off in the next two years. Imagine the freedom this provides, and the peace of mind too. You could do the same; we were $70,000 in debt when we got married a few years ago, but we took control and changed our lives with some focused effort and a game plan. Soon, we will do whatever the Hell we want…because we can.