Is being rich worth it?

Is being rich worth it?

Lady Jeanne Malcolm (“Lady Malcolm”) born in 1881 was an only child of the celebrated actress Lily Langtry. She was part of the English upper class which meant eyebrows were raised when in 1923 she began: Lady Malcolm’s Servants Ball. In which domestic servants could dress up, socialise and dance until midnight for one night of the year. Servants were treated as sub-human beings at the time, often ignored by their employers, so this was one night of dignity. Speaking of Lady Malcolm, the late genealogist Charles Mosley said:

“She had a very odd childhood. Her mother touring, doing her stage appearances, cavorting with her boyfriends, left her alone … So the little girl is taken out by servants and makes friends with servants. She sees that they are not just human beings but, in many ways, nicer human beings than the grand folk with whom she is expected to spend her time.

[BBC documentary: Servants: the true story of life below stairs]

Undoubtedly Lady Malcolm organised these events as a way to give back to so many servants that were mistreated at the time. What struck me was Charles Mosley’s comments, that in fact, Lady Malcolm prefered the company of the servant class than that of her own. I’ve sometimes thought that people with less are more genuine than those with more. There’s less pretence. Which also makes me think, is being rich worth it?

Why be rich?

Why do so many people want to have abundant wealth? For some, it’s to escape the drudgery of a 9-5 job but you don’t need to be rich for that. For many it’s the thought of a luxury lifestyle, eating at fancy restaurants, staying at swanky hotels, holidaying on tropical islands, and a life of leisure.

As nice as all of that sounds — after a while, you’d adapt to this new lifestyle (hedonic adaption). It’s no different to how we take technology for granted — internet banking and food delivery make life easier but there’s no happiness gain as it’s now baked into what we expect from life. So is being rich a logical goal?

Internet anecdotes

What do those that have become rich say on the matter? With a healthy pinch of salt, what insights can be gleaned from q&a websites? When asked the question: what about being rich did you not expect? A couple of Reddit users replied:

“The biggest change for me has been motivation. I used to love working and now I’m struggling to be excited about anything. The biggest challenge is teaching my kids how to be self-sufficient. I had house cleaners and cancelled the service. We do our own house chores. I do my own yard work. I still want them to have pride in ownership and recognize that there isn’t a magical money tree.”

“Self-made millionaire and business owner. I didn’t have any changes I didn’t expect, but the opposite.. I expected changes which didn’t actually occur. There was no ‘woohoo!’ victory moment on becoming a millionaire or paying my house off. It was more like ‘ok, well that’s nice I guess’. Probably because it happens organically, rather than a sudden windfall, so you just get accustomed to your income growing over time”

Moving to Quora and answering the question: is getting rich worth it? One user replied:

“Here is my opinion: my poverty-stricken parents started a printing company in our spare bedroom. Eventually became millionaires. My mom became addicted to the money, and was constantly striving for more. Nothing was ever enough. My dad just wanted comfort and family …they divorced …  having seen the entire gauntlet, I would say that getting comfortable is worth it. Getting rich is not.”

Why we obsess over money

Michael Norton, a Harvard Business School professor and co-author of Happy Money has extensively researched the rich and the relationship between money and happiness. Norton’s research tells us that the measurability of money makes it so appealing.

We all want to know whether our life is improving and whether we’re doing better than other people. For things like happiness or how good we are as a person, it’s impossible to know. Other than our height (if you’re male because it matters) very few things in life are as quantifiable as money. For the ultrarich, this depressing comparison game doesn’t stop. We compare and look at people doing better than us whether we have little money or a lot.

Money is just a database entry

Elon Musk is really rich but is being rich worth it?

Elon Musk was quoted as saying that money is “just an entry in a database”. I guess it’s easy to say when you’re worth hundreds of billions. But Musk’s comment gets to the crux of the matter, at some point, the number in your database stops making a difference. There are diminishing returns. It’s all the other things in life that make it memorable. When you die, no one talks about the car you drove.

What would you choose?

Try and imagine this thought experiment for a moment. You can have Elon Musk’s wealth, so hundreds of billions but you’re persistently unhappy or you can have the money of average Joe (a median salary) but you’re constantly happy. What would you rather? If like me you’d go for the latter option then it shows being rich doesn’t make sense as life’s primary goal.

Charting life satisifaction

The charts below are split by gender and show how life events affect wellbeing (positively and negatively) with ‘0’ being the point at which the event occurred. At the least, these charts signal how we adapt to what life throws at us, and although “lottery win” isn’t listed, I’d be surprised if it didn’t show a regression to the previous state of satisfaction.

[These charts are from Our World in Data which has an entire section dedicated to happiness and life satisfaction.]

Charts on how events affect life satisfaction for women

How much is enough?

“Being rich means you get to worry about everything except money”

Johnny Cash
Johnny Cash - is being rich worth it?

Satisfaction from money rises to a certain point and like everything else, there are diminishing returns. How much is enough varies depending on what you read, one number that’s bandied about is earnings of $75,000. The number doesn’t matter though, the point is there’s a limit. I like Johnny Cash’s take on things, you have enough money when you reach the point that it isn’t a worry. Which probably doesn’t mean being rich. Once achieved maybe focus on the next thing. Like a hobby.

So, is being rich worth it?

If you’re doing something you love and the side effect is becoming rich, then yes, being rich is worth it. But if you’re working an unenjoyable job just to get rich, then no, it’s not. Alternatively, an approach from the FIRE community is to save enough money so you can get out and then do something you enjoy — this approach, at least minimises the pain.

According to evolutionary theory, we’re wired to keep accumulating resources as a survival tactic from our hunter-gather days. But when we think about it for a moment, we’re obviously being misguiding by our prehistoric genes. We obsess about wealth but less so about health and what we’re doing with our lives. Just as money is only a database entry, life is a series of memory entries added to our brain’s database. Given the choice between living an unmemorable rich life and a memorable unrich one, the choice is simple. Yes, but I want to live a memorable AND rich life, I hear you cry. That would be great but money’s mesmerising allure means it doesn’t always pan out that way. But is being rich worth it as a life goal? Definitely not.

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3 thoughts on “Is being rich worth it?

  1. It’s easy to get lost in the numbers when taking into account such concepts as FIRE. It’s something I struggle with, thinking about how to maximise income when in all likelihood it wouldn’t solve all my problems. It’s just one problem, an important one, but not the sole blocker.

    It’s also worth mentioning social mobility, for the most part people don’t stray too far from the economic class they were born into. Not that one shouldn’t try to change their circumstances. But that one should recognise the limitations in believing so.

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