
Is Getting Rich Worth It? - ph0rque
http://www.scotthyoung.com/blog/2012/12/28/is-getting-rich-worth-it/
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aaronbrethorst
I'd love to have $10 or $20mm socked away. It would allow me to pay off my
mother's and sister's mortgages, not have to ever worry about how to pay
bills, and be able to take trips at any time to anywhere. But, I don't think
that would make me any happier than I am now at my current level of income.

And, as it works out, there's a recent study that backs this up.

    
    
        "Beyond $75,000 in the contemporary United States,
        however, higher income is neither the road to
        experience happiness nor the road to relief of
        unhappiness or stress, although higher income
        continues to improve individuals' life evaluations."
    

[http://www.inc.com/news/articles/2010/09/study-
says-$75,000-...](http://www.inc.com/news/articles/2010/09/study-
says-$75,000-can-buy-happiness.html)

My (totally wild-assed) guess is that an income of $75,000 is, _on average_ ,
enough in the United States to always satisfy the first and second levels of
Maslow's hierarchy of needs
(<http://en.wikipedia.org/wiki/Maslows_hierarchy_of_needs>), at least as far
as money can address the enumerated needs.

~~~
rasbonics
I wonder what the typical household looks like in that study. I'm the sole
breadwinner for my family of four, and with a mortgage and some school loans,
a $75000 salary is barely enough to make ends meet.

~~~
joshkaufman
I included this study in the second edition of my book, so I have the numbers
handy. The study was conducted in 2008-2009. Average household income was
$71,500 USD. An annual income of $75,000 USD represented an income in the top
third of US households during those years. (Source:
<http://www.pnas.org/content/107/38/16489.full>)

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ChuckMcM
This is such a personal spin kind of thing. I've noted in the past that people
with more money can develop a sense of fearlessness in their actions, with the
levels being

Paid off the house - So housing expense consists of property taxes, insurance,
and utilities.

Saved enough for kids to attend college - So you know that if you die tomorrow
your kids will at least have had the chance to get through school without
crushing student loan debt. Note that this has shades from 'can go to some
college', to 'can go to any college they get into'

Have enough such that spending 4% of it per year is enough to pay your basic
bills (those property taxes, insurance, and utilities we mentioned earlier,
and food to eat)

At each stage your tolerance for risk at what you are doing failing, goes up.
So if you are at level 3 and the company your at explodes or your startup has
to roll up. Its sad but its not like you're out hustling for the next job, you
can reflect on what went right and what didn't and plan your next one with
that in mind.

Of course there is completely different kind of 'Getting Rich' and it is most
closely associated with people whose goal is "to be rich" rather than "to cure
malaria" or "to feed the homeless" or "create the next parallel processing
language at scale." I saw a number of those folks growing up in Las Vegas
where you could go from having $1,000 in the bank to having a million dollars,
in the clink of a slot machine's wheels. Lotto winners can be these people
too.

Those people freak out. They try to "live like rich people" do, which is
usually some weird mash-up of the Beverly Hillbillies, 90210, and Dallas. They
buy a really fancy car, and a flashy house, they add huge on-going costs into
their lives (pool maintenance, vehicle maintenance, catering services). They
have no idea what managing a chunk of cash like that entails so they dump it
all in their local bank's "wealth management" group. They insist on getting
check writing (or worse debit card) access to it so they can pay for something
whenever they need to, completely unaware of the tax consequences of having to
sell securities to cover the cash demands. Surprisingly or not, they give a
lot of gifts to people. Including people they probably shouldn't.

Those folks burn through the windfall faster than a fire at a month old
Christmas tree lot. When they run out, they usually declare personal
bankruptcy, try to get people sued for putting them into the poor house, often
ask for gifts they gave to be given back, and sometimes never recover their
balance. For them, "Getting Rich" was the worst thing that ever happened to
them.

Then there is "rich" where you have 100MM+ in the bank to draw on. Note that
4% of 100M is 4M$/year or 300K/month. If you have that level of stability then
you can actually sustain a lot of the stuff that the crazy people burn out on.
You can own a jet with a pilot to fly you around, and the parties and gifts
can go on for essentially forever. You also need to hire security to protect
your family from being kidnapped, etc etc but that isn't a very common level
of 'rich.'

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endtime
I suspect that if your life isn't on track and you think everything would be
solved by money, you'll be disappointed if/when you get it. But if you
basically have your shit together and want to have more than a couple kids and
be able to go on nice vacations etc., then I bet wealth makes things a lot
easier.

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EvanAnderson
I think it depends on how you define "getting rich" and what you find
fulfillment in. I think "getting rich" would be worth it, if "getting rich"
means being able to be more thoughtful about the work I'm doing and less
enslaved by it.

Years ago I had a "side job" on weekends that paid roughly 2/3 of my "primary"
job. Working on my weekend job felt stress free and enjoyable, as compared to
the daily Monday thru Friday grind. I attributed a significant fraction of the
enjoyment I felt in the weekend job to the fact that I didn't really _need_
the job. (Sure, it was _different_ work from the M-F grind, too, so that also
factors in.)

My "getting rich" goal involves being more reliant on my investment income
than my consulting income. My experience with that old weekend job makes me
believe that, as my reliance on consulting income fades, my enjoyment level
with the consulting work will grow. Having more freedom to be selective about
work I take on, being able to do more charitable and volunteer work, and being
able to work on fewer jobs simultaneously are all goals that I know will make
me happier and decrease my stress level.

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davidkatz
Most of these discussions really miss the point. Money is merely an amplifier,
an enabler. You can think of it like technology. Does the Internet make people
happier? Nope, but it sure enables a lot of opportunities to be happier.

How would you answer the question 'does technology make people happier?'.
Surely, having (say) a computer is not what life is about? When you stop to
think about it though, having a computer is a gate to all kinds of things -
communicating better with friends and family, a more flexible (and hence less
stressful) work environment, and so forth. Does a computer necessarily lead to
these things? Of course not. Is it a huge enabler for these things?
Absolutely. Should you want a computer? In the vast majority of cases — yes.
There's a qualifier though: the happiness you get out of a computer depends
mostly on what you do with it, not you owning it.

Bringing the discussion back to money. Does it necessarily lead to happiness?
No, but it sure opens a lot of opportunities. The same qualifier also applies:
the happiness you get out of money depends mostly on what you do with it, not
you owning it.

Should you go after money? That's a question that probably has no universal
answer. My father likes to jokingly say: 'it's better to be rich and healthy
than poor and sick', and he has a point. All things being equal, it's hard to
see how money could be a bad thing. Problem is, all things are not equal. If
what you want to do with your life leads away from money, then doing what you
want to do surely matters more than being rich.

If you do choose a path which will not lead to money however, don't try to
belittle money's benefits by saying things like 'money does not make people
happy'. That really is not the point. Money is a wonderful enabler of
opportunities, and we should recognise that so that we can make better
decisions.

~~~
ChuckMcM
For some money is a 'score' which they use to compare whether or not they are
winning or losing.

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nikster
I havent given up on getting rich, but I recently thought about what David
Deida said: Whatever it is that you really want, imagine you have it, pretend
you have it, right now, and think about what would be different. Act like you
have it. Not just money - fame, a huge mansion, three ferraris, or maybe you
want a harem full of sex slaves. Whatever it is.

I thought about $100M in the bank and I realized that it would solve only one
problem in my life: The problem of not driving a Ferrari. Now frankly, put it
this way, it sounds like a pretty idiotic, petty "problem" to have. There are
certainly many other challenges I face every day that are worse than "not
driving a Ferrari", pretty much anything, relationship issues, balancing time
with my kids, figuring out what I really want, etc - none of these other
things would be any different with money. In fact money and more worldly
possessions would be yet another time sink. It would have to be managed,
things would have to be managed, managers for the yacht and the 5 houses would
have to be hired and managed, and fired, and so on. Likelihood of having more
time to do whatever: Low.

Maybe Id get a bigger house - but I am on the verge of building a new house
anyway and its going to be big enough until the kids move out. Also "not
having a bigger house" is not an issue I think about very often. Or ever. Same
with not having a super yacht.

Do you want to change the world? You dont need money. If youre telling
yourself that you are just making excuses. I guess maybe that is why we all
strive for money - because we can very conveniently tell ourselves that we
would be these super people if only we had a bit more money. Yeah right. Stop
making excuses and start living your life.

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paulhauggis
Yes, it is.

Being rich means you have the freedom to do whatever you want.

~~~
mikepk
The factors limiting our freedoms are not always financial constraints.

I've known many people who were not rich who had a great deal of freedom to do
what they wanted. Sure they couldn't buy a ferrari every week, but they were
able to travel, explore, move around, do creative work and be pretty happy
doing it even though they had almost no material wealth.

We make choices to take on responsibilities and to follow certain paths, but
it's a double-edged-sword. There's something to that quote from 'Fight Club':
"The things you own end up owning you".

~~~
shard
One limit is the fear of some medical catastrophe in your family wiping out
all your savings. This is the main freedom that being rich would give me.

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reasonattlm
If you don't want to change the world, and you don't have a concrete plan for
doing so, then possibly not.

If you do want to change the world, it means you have to comprehensively
persuade perhaps ten or twenty fewer people of equivalent net worth than you
would otherwise have to.

My impression is that next to nobody wants to change the world earnestly
enough to make inroads in either persuasion or fundraising. The pity of it is
that this is also true for the vast majority of people who have managed to
become very wealthy by their own efforts - they have no idea what to do with
all that money other than keep on trucking with the process that's making it.
See the general flailing around for by-the-numbers Big Charity, for example,
among those with enough wealth to be brand names.

~~~
rednukleus
Sounds like you want to change the world. In what way, and why?

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Tycho
I imagine it depends how much of an appreciation of material things you've
managed to cultivate.

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nacker
Try Googling "unhappy lotto winner". The question is, can you _handle_ being
rich?

~~~
paulhauggis
There is a big difference between winning the lotto and making your money by
working for it.

~~~
mikec3k
Exactly why I never play the lottery. I'd rather strike it rich by working.

