This is the fifth in a series of articles that deal with our relationship with money. (You can read the other ones here). Most of this is based on the work of Morgan Housel, the author of The Psychology of Money.
5. The joy of spending can diminish as income rises because there’s less struggle, sacrifice, and sweat represented in purchases.
In his 1903 book The Quest for the Simple Life, William Dawson writes:
The thing that is least perceived about wealth is that all pleasure in money ends at the point where economy becomes unnecessary. The man who can buy anything he covets, without any consultation with his banker, values nothing that he buys.
Consider how you felt when you got your first paycheck from your first job. If you celebrated with as little as a milkshake from Denny’s you probably had a joyous feeling of, “I did this. I bought this with my own money.”
Going from not being able to buy anything to being able to buy something is an amazing feeling. The gap between struggle and reward is a big part of what makes people happy.
Contrast that with later in your career, when (hopefully) savings have been built and paychecks have grown. It’s not that spending won’t make you happy – but it won’t be as thrilling and adrenaline-inducing as it was when there was more struggle behind each dollar.
Morgan knows a guy with a private chef. He’s served 5-star meals three times a day, an arrangement he’s enjoyed for years. It’s amazing; Morgan said he would lie if he said he wasn’t jealous. But he also wonders if the joy diminishes over time. He doesn’t have to struggle to get these meals – there’s no anticipation, no looking forward to a restaurant reservation, no contrasting gap between a “normal” meal and his daily delicacy.
There’s a saying that the best meal you’ll ever taste is a glass of water when you’re thirsty. All forms of spending have that equivalent.
Morgan ends this conversation about the joy of spending with a wise quote from, of all people, Richard Nixon: “The unhappiest people of the world are those in the international watering places like the South Coast of France, and Newport, and Palm Springs, and Palm Beach. Going to parties every night; playing golf every afternoon; drinking too much; talking too much; thinking too little; retired; no purpose.”
Morgan goes on to say, “So while there are those that would disagree with this and say, ‘Gee, if I could just be a millionaire! That would be the most wonderful thing.’ If I could just not have to work every day, if I could just be out fishing or hunting or playing golf or traveling, that would be the most wonderful life in the world – they don’t know life. Because what makes life mean something is purpose. A goal. The battle. The struggle – even if you don’t win it.”
Where are you in the pursuit of your purpose?
To Your Prosperity,