Further Thoughts on Wealth

FileMoneyLast week when I discussed American attitudes towards wealth, I cited two articles: One that claimed the annual median household income was $51,500 and the other that claimed an annual income of $75,000 was all it took to maximize financial contentment. I pondered these numbers for a few days and decided that while an annual income of $75,000 might make me financially comfortable in the South, Midwest, or Southwest, it would not have the same purchasing power in New York, Boston, Chicago, Los Angeles, or San Francisco. My hypothesis was that people maximize their financial contentment when they have approximately 50 percent ($75,000 is just under 50 percent more than $51,500) more than the median. So, in theory, we should strive to reach an income that is between 30-50 percent better than the median income in our area and we have then maxed out our ability to gain satisfaction from money. After all, it isn’t so much the money that buys us happiness as it is how much you have compared to your neighbors.

There was one significant flaw with my theory. The Time Magazine article quickly pointed out that reaching the $75,000 benchmark only impacted our daily mood but that earning more than $75,000 lead us to believe we found deeper life satisfaction. $75,000 is merely the amount needed to make people feel resilient in face of adversity. This brought to my attention a depressing characteristic of American culture: our sense of self-worth is tied to our net worth. According to the authors in the article, “High incomes don’t bring you happiness, but they do bring you a life you think is better.”

Fortunately, there is a trend among Americans to redefine success and happiness outside of wealth. When we compare a family with a six figure salary, a job that requires travel 25-50 percent of the time, and limited personal and vacation leave to a family with a modest five figure salary, the ability to take the kids to school every morning, return home from work every day in time for supper, and plenty of sick and vacation leave to take care of family and personal interests, more and more people want the lifestyle of the latter family. According to an article on Huffington Post, Finding Happiness: Americans Care More About Pursuing Personal Passions Than Wealth, Survey Finds, “Ultimately, success is not about money or position, but about living the life you want, not just the life you settle for.” A quote from Ken Robinson’s new book, Finding Your Element, sums it up nicely. “But in the final reckoning, it’s not money or status that really matters. In the final weeks, it all comes down to love and relationships. That’s all that matters in the end.”

This brought me back around to last week’s conclusion. When it comes to maximizing our well-being, a balance must be made between time and money.  It seems that no matter what our income is, we always want just a little more, but want is an endless cycle. Wouldn’t you rather spend your time hanging out with family and friends?

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