I recently read a great article from the Atlantic. The gist is that there are plenty of unhappy millionaires. But they have common traits that we can all learn from. So let’s figure out how rich people are unhappy.
I’m going to pick some quotes from that article and apply Best Interest thinking to them. If you’re anything like me, you’ll think this is great food for thought.
Social comparison is critical
Researcher Elizabeth Dunn found that “social comparison is critical,” in determining those who are financially happy from those who are financially unhappy. Translation: this is “keeping up with the Joneses,” plain and simple! Rich people are unhappy if they compare themselves to even-more-rich people.
It’s human nature, we all do it. But you can control just how much you do it. You don’t have to look at the neighbors, the relatives, the perfected beauty of Instagram and then compare yourself to them. Screw that!
Comparisons that you make in life should neither create joy nor steal joy. I once recommended the words temet nosce, or “know thyself.” Only you truly know yourself. Are you putting your joy or sadness in the hands of comparison?
It’s harder than it sounds! Writing this blog–one of thousands of personal finance blogs–I find myself looking at my neighbors and thinking, “Gosh, she’s a great writer. And he’s great at marketing his work. How could I ever be better than them?!”
But over time, I’ve started enjoying my good work for what it is. Some people like it, they let me know, and slowly-but-surely they share it with others. I’m happy with that!
It matters a lot what you do with your money
Dunn then explains that “it matters a lot what you do with your money.” People are happier when they funnel money towards charity, to memorable experiences, or towards hiring out for dreaded tasks. Notice a glaring omission?
Turns out, that new blender won’t make you happy, despite having a different speed for each kind of fruit. Material goods are not tied to long-term happiness. But interestingly, paying the neighbor kid to clean your gutters could make you overjoyed. The size of your bank account doesn’t matter; it’s how you use it!
Many wealthy folks find themselves discouraged because they’re expecting a new set of downhill skis to solve all their problems. I’m not a psychologist, but even I know that’s not how happiness works.
…fully aware of their financial situation
Later in the Atlantic article, financial coach Maggie Germano chimes in and says, “the people who feel the best about their financial situation…are people who are fully aware of what their financial situation is.” Sound familiar?! This statement is “temet nosce” combined with a healthy dose of “moneyball, Romans, and you.” If you don’t know what I’m talking about, I suggest you read those two posts.
Germano is saying that the scary part about finances in the unknown. We all share a fear of the unknown, whether you’re rich or poor. It’s the creaking sound under the bed. It’s the dark of night. What’s there? Once you shine light on it, things are actually okay.
…be talkative and honest
And then Germano adds, “it’s really important to be talkative and honest about your finances with friends and family.” I continue to learn that finance often falls a half-step below religion and politics in terms of public conversation. We expose ourselves to negative reactions by discussing it in the open–including on this blog! But if you trust your family and friends, have some open and honest conversations with them. I’ve written before about the life-changing advice I’ve learned simply by discussing these topics with others.
Rich people are unhappy? Bring some joy
I’ve written a lot about some of the mechanics of personal finance. I hope this post addressed some of the emotional side of personal finance. What are the lessons to be learned?
- Avoid social comparison
- What you do with your money is vital
- Get full awareness of your financial situation
- Be talkative and honest with loved ones
At the end of the day, what’s the good in being rich yet pissy, like Scrooge? It’s no fun to be rich but unhappy. I hope these ideas bring you some joy.
Thanks for reading the Best Interest.
Why is it that personal finance “often falls a half-step below religion and politics in terms of public conversation”? First, many people do not want to expose their lack of basic financial knowledge. Oh, you don’t know what fees you pay for your 401k account?
Second, and more significant I think, is that too many folks mistakenly equate self-worth with financial worth. If rich people are “successful” ….then non-rich people must be……”unsuccessful.” Heaven forbid it becomes known that I am not rich! I don’t want to talk about it!
Take a step back. Plant a tree. Learn a new bird call. Try a new herb in that recipe.
May I suggest Thai Basil?
Hi Christopher, thanks for the comment!
Your idea of “net worth == self-worth” is on point. Every time I think of that idea, I come back to this Kurt Vonnegut quote: https://www.goodreads.com/quotes/158414-america-is-the-wealthiest-nation-on-earth-but-its-people
And personal finance is, well, personal. “Why don’t you know your Expense Ratio?” is a distant cousin of “Why don’t you support Food Stamps?” or “Why doesn’t God allow unbaptized babies into Heaven?” I absolutely think that these SHOULD be questions that we’re all open to discussing. Honest discourse acts like sunlight, disinfecting bad ideas.
However, we all struggle parsing rationality from emotion. Our highest political candidates often struggle sticking to rationality! Let alone Joe Schmo and Jane Doe…
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