I’m curious to see a finance perspective of this relationship. Since becoming unemployed and living on savings/UE Benefits, I really wish I had more money. I eat cheap, go to the gym/library daily, and always watch what I spend. Sometimes I find myself thinking if only I had enough to not have to worry so much about basic expenses. While I am not sad or stressed financially, I sure miss out on a lot of fun times my friends have. I’m curious to hear the perspectives of people who are doing well financially, how does it really feel? Aside from the toys and houses, do you really enjoy life more due to a lack of worrying about mundane things? I realize this is a unique question. After thinking about it the past few days, I’m wondering how the fine members of AF feel about it.
I’d say Law of diminishing returns, but I have yet to notice the curve flattening out with each incremental dollar. I would say keep your friends, but make a few who aren’t such high-rollers and penny-pinching doesn’t feel so miserable.
I predict a quote from the movie Boiler Room comming any moment now…
It’s all a matter of perspective and how you define “doing well financially”. I remember wishing I had a little bit more money so I could do/have more things, take trips with my buddies, etc. Then I saw my parents working at 70 and debating if they had enough to retire. That’s not going to be me. I’m willing to give up some things now for long term financial stability. The key is to control your desires and define what your “wants” and “needs” are. With a mortgage, MBA loans, and two kids in daycare we still save 40% of our take home pay each month. And we don’t make that much money. True, I don’t have a lot of things I can afford to buy (plasma TV, bigger house, newer cars) but who cares! I don’t have to worry about money all the time!
There are various levels of stress and problems change as you start making more money. It’s like a computer game. Once you get to the next level the problems get more complicated. As you start making more money you get less pleasure out of it and you start having problems which are more mental: depression, anxiety etc. The best way someone described it to me was: money cant buy you happiness but lack of it could certainly make you very unhappy.
Great post… People adapt quickly to income shifts relatively quickly. It’s argued that once you are used to a certain standard of living, it doesn’t mean you are happier then someone less well off, as you have become accustomed to and expect a certain standard of living. I have a article pinned in my office that I read every now and then (link is below), to put things in perspective. It recommends a few things… 1. Don’t equate money with happiness. 100% agree with diminishing returns comment above. 2. Exercise regularly 3. Have sex 4. Have close friendships/relationships 5. Reflect on the good things in life 6. Seek work that engages your skills, look to enjoy your job 7. Give your body the sleep it needs 8. Don’t pursue happiness for its own sake, enjoy the moment 9. Take control of your life, set achievable goals. For more info check out this research report by Dresdner Klienwort put out awhile ago. http://www.trendfollowing.com/whitepaper/happiness.pdf
I think it really is relative. My family moved here as refugees and took on stereotypical immigrant jobs. I don’t think my parent ever made more than 25k combined when they had 3 school aged kinds in Southern California- but everyone else in my schools was in the same situation so I can honestly say I never felt poor. Now I have upper middle class friends whose kids feel poor because their friends have chanel handbags and they don’t. I felt more money pressures and heard more complaining about it in my socialite filled liberal arts college than I ever did in the barrio. Looking back I think it was amazing what my parents did to entertain and educate us on such tiny budget in such a high cost area. They made sure to instill a culture or enjoying making art and reading and learning vs buying and that has definitely reaped tremendous benefits on me. You learn to use all the resources most take for granted- public libraries, free summer events/festivals/concerts, national parks, etc. I also think there is a different standard for travel. All of my european/latin friends find it a pleasure to host family and friends (even ones w/ degrees of separation) on their travels, whereas here no one wants to intrude and would rather stay home if they cannot afford a hotel. It was normal for my parents to spend a week at a time sleeping in the living room while visitors were invited into the bedroom. I think the fisherman anecdote posted in the other thread was really great.
This was my father’s take on whether money could buy you happiness: “If you’re poor and you’re happy, you’re stupid.”
MoneyMan_CFA Wrote: ------------------------------------------------------- > I predict a quote from the movie Boiler Room > comming any moment now… Enjoy your tubesteaks.
frisian Wrote: ------------------------------------------------------- > This was my father’s take on whether money could > buy you happiness: > > “If you’re poor and you’re happy, you’re stupid.” what are you if you are rich and unhappy? uber-stupid?? Just because you are poor and happy does not mean you are content with staying that way- there is always something better to reach for. Being a content person who is capable of being emotionally stable even in bad times is a great platform from which to jump. You already know how to make sacrifices and work for what you get- those traits are imperative for success in business and elsewhere. edit: BTW- by the time I graduated college my parents sold their then more profitable business and are now sailing around the world. They would have never been able to do that had they spent their time complaining and worrying about how they had to work 16 hour days at minimum wage in the beginning.
Law of diminishing returns and eventually negative returns. When you are broke life is hard, although you can still be happy (in my journeys to China I saw some of the poorest yet happiest people I’ve ever met). Once you have the basics covered, food, swanky shelter, transportation, a hot babe, a few toys to keep you occupied, plenty of cushion, then stress drops to near zero. But then you work hard harder and become sr whoever and have job responsibility and the upkeep on your growing stash of material possessions eats away at your life, and you never take vacations, never sleep, and your stress starts going up again until you become that billionaire who committed suicide! When I hit 100K and called it good and started making moves to make my life more fun and simple, I could have worked a lot harder like some of my friends and made 200K by now and had a boat, but my life would suck.
These posts are very enlightening. I’m happy as a clam right now. I have zero stress, read everything that grabs my interest, exercise daily for as long as I’d like, and have a low budget lifestyle. I think I’ll always keep a low budget lifestyle regardless of how well I’m doing. However, this lifestyle cannot be upheld forever as my savings is getting drawn on daily and unemployment benefits are limited. While this time is a nice break from life, I ponder wondering what is awaiting me and how that will change my happiness.
What a great thread! Good one ditch! I am enjoying the responses.
For all you T.Dot CFAs: remember this song… “Money can’t buy me happiness But I’m happiest when I can buy what I want, anytime that I want Get high when I want”
I think of a lot of the race to get rich has to do with peer pressure. Once you take the Joneses out of the equation, you might find you have what you need. Most will agree they were happiest in college - I was.
MattLikesAnalysis Wrote: ------------------------------------------------------- > For all you T.Dot CFAs: remember this song… > > “Money can’t buy me happiness > But I’m happiest when I can buy what I want, > anytime that I want > Get high when I want” hhaha i remember that tune…i forget the name of the guy though - jellestone ?? "I think of a lot of the race to get rich has to do with peer pressure. Once you take the Joneses out of the equation, you might find you have what you need. " + 1
I think people in general are always going to want “just a little more than they have now and then they’ll be happy” But it turns out they you always want a little more than you have - unless your priorities in life right and you learn to be content and live one day at a time. To quote 30 Rock - “Live every day like it’s shark week!”
When I wasn’t worried about job security or bonuses, I guess you could say that I was pretty keen on “living it up.” My day-to-day expenditures are pretty bare-bone. I buy almost all my groceries on sale, bring food from home for lunch and cook at home (unless I work late, in which case I’ll order dinner at the office). However, this left me with a fair bit of money to do things like travel, spend money on sartorial attire and other things fashionable, and just go to nice restaurants and clubs. I didn’t really have to think too much about my expenditures, because I knew that outside of my occasional lavish tendencies, I had a ton of money saved up because I didn’t spend money on stuff I didn’t need. Some might argue that I didn’t need to go to trendy establishments or spend money on clothing, but I enjoy these things so such activities are not wasteful to me. Things that I do NOT partake in include bottle service at clubs, collecting cars or art, or staying in four-star hotels on my own dime. Overall, I think I’m pretty realistic and pedestrian about most of my daily. Of course, now that things on Wall Street have gone pretty soft and I do worry about the safety of my job, I’ve cut out a lot of unnecessary stuff. On my own, I only eat out about once or twice a week, and have also been more thoughtful about when/where I will be traveling for leisure. In fact, I’m sure there will be some vacations that I take this year where I won’t be going to any place too exciting; more like just taking it easy. I’m also at the point where I have enough “luxury goods” for the time being, where I’m no longer tempted to buy stuff. Hopefully my concerns over layoffs are unfounded and won’t become a reality for me, but if they do, I suppose they’ll leave me with a lot more time to work on my business school applications, focus on the non-profit board that I’ve been serving on, and hone my tennis game. I would certainly be in the red if I were still in New York; fortunately, there are plenty of places to play tennis for free in Texas, and club fees are pretty nominal. In spite of things at my current firm reportedly going pretty well, I do worry about the prospects of unemployment on some level. It’s all dawned on me that as far as anyone’s really concerned, we are all just “numbers” on Wall Street when you take a high-level look at things. That being said, I’ve also come to grips with the reality that if it does happen, I have (1) enough money saved up to keep me going on daily sustenance for the foreseeable months, and (2) I have enough things on my personal agenda that I’d love to accomplish, but don’t presently have time to do. Anyway, hopefully that all makes sense – it was a bit of a long post, but I’m curious to know if any of you other folks see where I’m coming from. I don’t think I’m unnecessarily pessimistic about my prospects either; I know people talk about private equity as being a nice profession, but it’s not exactly the land of milk and honey right now, and it’s as exposed to the economy as anything else.
hows the board seat going numi?
great blog with a lot of wholesome honesty. I think money is the basis of security for a lot of us. Having a big cushion saved has aleviated a lot of otherwise unwanted stress. I remind myself that my well being is more important than stressing about layoffs. The latter is not personal at this stage of the game, just a numbers game. we have a mortgage and no kids yet, and we have lived a fairly frugile life style for most of our day to day: buy most clothes on sale, personal mobile phone is on pay as you go, cook most nights at home but do have date nights with my husband, takeouts when we are too tired to cook, read most books from the library, read some magazines from the library, walk when I can . hence we were able to save a comfortable cushion to ride out at least 12 months if we have to. That said, we do spend money on the big loves of our life: travel well, vacations, fancy restaurants (love food) and home theatre for movie-watching. I am a free spirited person and dont get influence by other people’s goodies. All is meant to be and I dont waste my energy on being jealous or wanted what other have, or look like everyone does. haha, I was never into the ugg boots craze in new york. so for me, money provides a sense of security and enough to cover my basics. My happiness is defined by other factors: good health, family and good friends, opportunities to learn and one day the ability volunteer as much as possible.