There is no doubt that having money provides an individual a certain level of comfort. If someone does not have enough money to eat, pay rent, or provide for other basic needs then they can only be so happy. However, there are plenty of people that have low levels of income that are happier than high earners.
Money can afford you many luxuries but some of the greatest experiences in life are free. Spending time in nature, connecting with family and friends, taking up a new skill, exercising, and many other experiences are just a few examples. This is because it is not about how much money you have but how you choose to spend your time.
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Mo’ Money Mo’ Problems
Having money comes with new challenges
The phrase more money more problems definitely holds merit. Once you are in a position where you have built wealth, you go in one of two directions: a focus on capital preservation or a desire to create more wealth.
Capital Preservation
Fear of losing everything
Some people are so scared of losing the money they worked so hard to earn, that they start to develop an unhealthy relationship with money. They become anxious, irrational, and very risk adverse when it comes to decisions about money and sometimes other life choices. The focus on not losing what they have worked for becomes all-consuming to the point that they are not able to enjoy what they have because they too focused on the possibility of not having it.
Manage your risk
There has to be a certain level of caution and focus on capital preservation when maintaining wealth. However, an individual focused on maintaining and growing wealth should also be comfortable with a moderate amount of risk. Nothing in life can be completely controlled so we need to become comfortable with the uncomfortable.
The Desire for More
Don’t let ambition blind you
For some people, they is never a cap on how much money they want to have. There is nothing wrong with this. As humans, we always have the desire for more. Once we have conquered something, we are on to the next challenge.
Knowing when you have enough for the life you want
Ask yourself why you want more. If you can only come up with the argument that it is only logical to keep growing and striving for more, I would think about what you are sacrificing in your life to potentially earn more than you may need. Are you missing out on time with your family? Do you have time for hobbies you enjoy? Are you taking care of your health and well-being? Put a price tag on those things and truly evaluate if you have enough. If you decide that you do have enough, come up with a plan for capital preservation and enjoy your life!
Alone at the top
Know who you can trust
While wealth affords many luxuries, it can also be very isolating. You never know who wants to be with you for who you are or for your money. It can be difficult to trust people new people that didn’t know you before you had means. This is why a lot of people either stay friends with the same people they know prior to building wealth or stay aligned with people in similar circles.
Associate with like-minded people
It is also very common for people that have similar income levels to do the same type of activities. This makes it difficult for someone that has come into means because you don’t want your other friends to feel insecure if they cannot afford to do the same activities. You also don’t want them to feel like a charity case if you offer to pay. If you pay too often, it may lead to resentment on your end because you feel used and unappreciated. This is where people run into problems when they interact with people on different income levels. Studies show that for all of the reasons mentioned above, people typically align themselves with others that are on similar income levels.
What would you do if you had all the money you needed?
The fisherman parable
There is a parable about a fisherman that fishes early in the morning and earns enough where he can live by the water, spend time with his wife and kids during the day, and then go and have a drink with his friends at night. He is approached by a businessman who tells him if he works really hard he can expand his business, have an IPO, and sell his stake in the business to be able to live by the water, spend time with his wife and kids during the day, and go and have a drink with his friends at night. Sometimes we are so focused on the goal of having more, that we don’t realize that we have enough to obtain all of the things that we want in life.
People often get so caught up in wanting more that they lose sight of why they originally wanted. Studies show that once you start making more than $70,000 a year, money becomes less important. The reason for this is because at that point, your basic needs are being met and you have extra money for the things that you want. While $70,000 isn’t going to cut it everywhere, the point is that once you start making a certain amount, money is less important. The reason for this is because money alone has no material value. It is simply a tool to buy and experience things that are of value.
Choose the life you want
Money affords you the liberty to choose. Once you are in a position to make those choices, it is up to you on how you make the most of those circumstances. Many rich people continue to work on their own terms after they accumulate wealth because they realize that the journey to accumulating wealth is what made them happy. The journey is usually more rewarding than the destination. As human beings, we are always striving for more. Once we achieve one goal, we are on to the next one. Do things in life that give you a sense of purpose. Whether it’s is a hobby, providing for your family, or your career; it is the way that we choose to live our lives that make us happy. The materialistic objects are just an added bonus.
