Becoming wealthy is a universal human desire. But what is wealth? What is real wealth?
The word wealth derives from well or weal. Both forms of the old English word are synonymous with wellness. Nowadays, wealth refers to a more narrow concept, typically centered around finances. But is this real wealth?
There is no doubt that below a certain level of wealth or income, people suffer. We need food, shelter, clothing, medical care, etc. We suffer without an adequate level of income to meet our basic needs and to allow us to freely participate in the activities that meet those needs. Below this level, more money means more happiness, or at least, less unhappiness.
We should, then, put our energy into making as much money as possible, right?
Some people may agree unconditionally. However, I think most of us would agree that spending every moment of our lives making money and growing wealth isn't the best course of action.
What really matters is not what we would say to a hypothetical question, but what we do. Most of the population lives as if there's no such thing as too much money.
Is there such a thing? Have I gone completely off the deep end here?
Let's first talk about the advantages of financial and material wealth. Then we'll talk about the other, non-financial aspects of wealth. After that, we'll discuss the downsides of the relentless pursuit of financial wealth or security. Finally, we'll talk about how we can weigh matters to make the best decisions.
Advantages of material wealth
- Higher status
- Greater control
- More influence
- Ability to enjoy richer experiences
- More stuff!
- Lack of dependence on others
- The ability to signal strength to others
No doubt you can think of many more.
Money can't buy happiness. What are some other things money can't buy?
Here's Nassim Taleb's list, from his book Antifragile:
- Worry-free sleep
- A clear conscience
- Reciprocal gratitude
- The absence of envy
- A good appetite
- Muscle strength
- Physical energy
- Frequent laughs
- Not eating meals alone
- Some physical labor (or hobby)
- Good bowel movements
- No meeting rooms
- Periodic surprises
Would you give up any of these things in exchange for a certain amount of money?
Think about each item on this list and determine what someone would have to pay you in order to completely remove it from your life. If one or more items are already missing, how much would you be willing to pay to have them back?
Take another minute and think about this: What have you recently spent money on? What are you considering spending money on?
Now, ask yourself why you bought that recent item or are considering that future purchase.
- Is it solving a problem?
- Are you buying it to improve your life?
- Is it something you've never owned before or a newer version of something you've already owned?
- How did you become aware of the option to buy this item?
- Learned about it from a friend or coworker?
Then ask yourself, Did I do a personal values inventory before making this purchase? How many of my core values was this purchase in line with? If the purchase was costly, this question becomes more relevant.
Being able to afford what you want is good, but understanding what you want is better. One way to achieve true wealth is to make decisions that are in harmony with our values, whether they involve money or not.
True wealth contributes not only to our own well-being, but also to the well-being of others.
According to Harry C. Triandis, pioneer of cross-cultural psychology, there are four “universal truths,” criteria that people globally believe to be valuable and important: mental and physical health, subjective well-being, longevity, and preservation of the natural environment.Reference to his book Fooling Ourselves: Self-Deception in Politics, Religion, and Terrorism in L. Walls, J. and C. Triandis, H. (2014), "Universal truths: can universally held cultural values inform the modern corporation?", Cross Cultural Management: An International Journal, Vol. 21 No. 3, pp. 345-356. https://doi.org/10.1108/CCM-12-2013-0186 Surely any objective measure of wealth will take these factors into account.
Throughout their lives, close relationships keep people happy, according to the longest-running longitudinal study ever conducted. Interestingly enough, those in the best relationships over their lifetimes also tended to be the wealthiest financially.
A person who has true wealth will have fewer end-of-life regrets.
Disadvantages of material wealth
In spite of wealth's obvious advantages, it also has a number of fairly obvious downsides. There are also some less-obvious drawbacks.
Pursuing wealth can lead to:
- Neglecting family
- Neglecting friends
- Neglecting one's own health
- Excessive stress
- Viewing others, including friends, as a source of competition
What are some of the hidden drawbacks?
You now have more to lose. People fear losing more than they fear not gaining. As a way to avoid the fear of going without, you started pursuing wealth, but now you are even more afraid of losing what you own.
A wealthier person has more opportunities. The complexity of their life also increases. Every increase in wealth opens up new possible future selves. It's like opening Pandora's box. Having imagined yourself in a role, you will always feel poor if you cannot achieve it.
Does money change people? Research has shown that wealth and power correlate with certain undesirable qualities.
Higher social class individuals tend to be less ethical. They are more likely to steal, lie, and cheat.Piff, P. K., Stancato, D. M., Cote, S., Mendoza-Denton, R., & Keltner, D. (2012). Higher social class predicts increased unethical behavior. Proceedings of the National Academy of Sciences, 109(11), 4086–4091. https://doi.org/10.1073/pnas.1118373109
Power increases one's psychological distance from others.Smith, P. K., & Trope, Y. (2006). You focus on the forest when you're in charge of the trees: Power priming and abstract information processing. Journal of Personality and Social Psychology, 90(4), 578–596. https://doi.org/10.1037/0022-3518.104.22.1688
People with more power have a reduced tendency to understand how others see, think, and feel.Galinksy, A. D., Magee, J. C., Inesi, M. E., & Gruenfeld, D. H. (2006). Power and perspectives not taken. Psychological Science, 17(12), 1068–1074. https://doi.org/10.1111%2Fj.1467-9280.2006.01824.x
Power can lead to a false sense of control.Fast, N. J., Gruenfeld, D. H., Sivanathan, N., & Galinsky, A. D. (2009). Illusory control: A generative force behind power's far-reaching effects. Psychological Science, 20(4), 502–508. https://doi.org/10.1111%2Fj.1467-9280.2009.02311.x
Four studies found lower-class individuals to be more generous, charitable, trusting, and helpful than their upper-class counterparts.Piff, P. K., Kraus, M. W., Côté, S., Cheng, B. H., & Keltner, D. (2010). Having less, giving more: The influence of social class on prosocial behavior. Journal of Personality and Social Psychology, 99(5), 771–784. https://doi.org/10.1037/a0020092
Among the factors promoting "wise reasoning" are intellectual humility, recognition that the world is constantly changing, and the capacity to take into account contexts other than one's own. According to studies, wealth and power can impede those capacities.Brienza, J. P., & Grossmann, I. (2017). Social class and wise reasoning about interpersonal conflicts across regions, persons and situations. Proceedings of the Royal Society B: Biological Sciences, 284(1869), 20171870. https://doi.org/10.1098/rspb.2017.1870
Also, many people who pursue wealth their entire lives end up realizing that their lives have no real purpose.
How about charitable giving? The more wealth you have, the more you can help others, right?
There are many people who praise billionaires who hoard wealth for their entire lives so they can 'philanthropically' give it away after they die. But do rich people really give more? What does the evidence show?
A survey of consumer expenditures by the U.S. Bureau of Labor Statistics found that, in 2007, the poorest fifth of American households contributed an average of 4.3 percent of their income to charitable organizations, while the richest fifth contributed 2.1 percent.
The Atlantic Monthly reported that in 2011, those in the top 20 percent of income contributed on average 1.3 percent of it to charity. In comparison, Americans at the bottom of the income pyramid -- those in the bottom 20 percent -- donated 3.2 percent of their income.
One British report analyzed the donations of more than 1,000 donors to 10 British charities, finding that people with modest incomes donate almost 5% to charity, but those with incomes over £40,000 donate just over 2%.
What other problems does an emphasis on acquiring wealth cause?
The ego constantly compares itself to others. It has us measuring our self-worth against the looks, wealth, and social status of others. Giving in to the ego is not a good way to stay in control.
Money can't buy happiness, but materialism predicts a lack of happiness and satisfaction, according to Madeline Levine in The Price of Privilege. She continues:
It keeps us wedded to external measures of accomplishment for a sense of self— prestige, power, money for adults; grades, clothes, electronics for kids.
Beginning in the 1990s, a majority of students say that “making a lot of money” has become the most important reason to go to college, outranking both the reasons above, as well as “becoming an authority in my field,” or “helping others in difficulty.” This shift in values among college students takes place at the same time that rates of depression, suicide, and other psychological problems have risen dramatically among this group.
Materialistic kids have lower grades and higher rates of both depression and substance abuse than nonmaterialistic kids.
In 1976 Jane Fonda told a news reporter, "There’s a psychiatrist that goes with every swimming pool out here, not to mention divorces and children who hate their parents."The San Francisco Examiner from San Francisco, California on December 31, 1976 · p. 16
According to a 2020 literature review, societal emphasis on wealth can even negatively affect healthy eating habits among adolescents. The study observed that non-traditional diets of pies, soft drinks, and other junk food was perceived as a sign of wealth and fitting in with peers.Ragelienė, T., & Grønhøj, A. (2020). The influence of peers′ and siblings′ on children’s and adolescents′ healthy eating behavior. A systematic literature review. Appetite, 148, 104592. https://doi.org/10.1016/j.appet.2020.104592
Alan Weiss, in Million Dollar Consulting: The Professional's Guide to Growing a Practice, observed, "Too many people are racing around generating money while eroding their wealth. They are making money but losing time."
Nassim Taleb took note of the differences between people in cold weather and hot weather countries. He mused:
The fact that people in countries with cold weather tend to be harder working, richer, less relaxed, less amicable, less tolerant of idleness, more (over) organized and more harried than those in hotter climates should make us wonder whether wealth is mere indemnification, and motivation is just overcompensation for not having a real life.The Bed of Procrustes
How to balance pursuing financial and non-financial wealth
If any of the above made you question whether the relentless pursuit of wealth is in your best interests (and those around you), what can you do?
First, reevaluate your priorities. Beyond necessities, why are money and wealth important to you? Take another look at the list of advantages at the top of the article. With the knowledge that each upside has a corresponding downside, which of these are you now less likely to consider essential? Are there any currencies other than money that could provide you with these benefits?
Is your ego driving you to seek wealth and social status? Consider ways that you can put ego in its place.
Think about prioritizing your mental and physical health, subjective well-being, longevity, and preservation of the natural environment.
Make sure you prioritize social relationships.
Curate your inputs
We are influenced by those around us, as well as what we read and listen to. If your friends are focused on becoming wealthy at all costs, you will have trouble seeing things differently. Even the music we listen to can subtly affect us. A study of song themes among top-40 songs in the U.S. observed that references to lifestyle issues such as wealth and status increased substantially, particularly in the 2000s.Christenson, P. G., de Haan-Rietdijk, S., Roberts, D. F., & ter Bogt, T. F. M. (2018). What has America been singing about? Trends in themes in the U.S. top-40 songs: 1960–2010. Psychology of Music, 47(2), 194–212. https://doi.org/10.1177/0305735617748205
Stop playing the game
We often feel that we don't measure up because our income or net worth aren't as high as others. But in the grand scheme of things, these numbers are the equivalent of monopoly money. Ultimately, what matters most is how we will view our lives in the future. In this regard, we can refer to the advice of hundreds of people who were interviewed near the end of their lives. Not one of them wished they had spent more time working and earning more money.
Ultimately, getting a handle on our desire for more wealth comes down to ego strength. Stoic philosopher Seneca may have never heard of "ego strength," but his words indicate an understanding of the concept:
We are attracted by wealth, pleasures, good looks, political advancement and various other welcoming and enticing prospects: we are repelled by exertion, death, pain, disgrace and limited means. It follows that we need to train ourselves not to crave for the former and not to be afraid of the latter.
What is the proper limit to a person’s wealth? First, having what is essential, and second, having what is enough.
A man asked Epictetus, another Stoic philosopher, "What man is rich?"
He who is content (who has enough).
It is my hope that this article has convinced you that contentment is the shortest and most satisfying path to wealth.