How Much is Enough?

The March 2018 issue of Money magazine cited an interesting study of millionaires and their perception of wealth and happiness.  The study, conducted by researchers from the Harvard Business School, queried 4000 millionaires on how they’d rate their happiness on a ten-point scale.

 

I suppose it’s not surprising that the majority of the subjects did not give themselves the highest score, a “10”.  Few people of any social status can say they are “perfectly happy”.  What does shock me is that 27% of them said they would need to grow their wealth by 1000% to reach that blissful state.  Another 25% said they required a five-fold increase in their net worth to get there.

 

I don’t know if the survey allowed the respondents to list something other than money that could make them happy; the published results only spoke to how much more money it would take.

 

That stands in contrast to a 2010 study of more “average” people (as measured by amount of wealth) that showed that an increase in income did tend to increase happiness levels, but only to a point.  Beyond an annual income of $75,000, the increase in level of happiness was minimal or non-existent the more money the subjects made.  Apparently not the millionaires, though.  “The more the happier” might be their motto.

 

My former boss, a hospital CEO, told me on several occasions that it was one of the saddest things he saw among physicians with whom he worked.  More than a few were reluctant to retire, even when they were seemingly financially secure.  It was not always a love of the job, either.  Too often he found that the doctors thought they needed “just a little more (money)” before they could retire.  Then the saddest twist of all, they did retire and died within a year or two—or even died before retiring.

 

It would be easy to blame greed for this attitude; and in the end we are personally responsible for our actions and attitudes.  But our economy is driven by consumerism and the ability of sellers to convince potential buyers that they must have whatever is being sold. 

 

And the financial industry is not blameless.  How many financial planners are telling their clients they have to have at least $1 million to retire with confidence?  They are selling “safety”.  They instill a fear of the worst possible outcome and convince their clients they must be 100% safe against that potential outcome by putting away more and more money—preferably into an account that the planner manages, for a percentage fee.

 

I was impressed by the decision of one “average” person, as reported in last month’s edition of Money, who thanks to the recent good performance of the stock market reached the dollar goal she had been shooting for in planning her retirement…and then took it out of the stock market entirely and put it in a safe, money market-type account.  Her attitude was, “I reached my goal, this is what I need to live on in retirement, and now I don’t have to worry about losing any of it if the stock market drops.”

 

That’s the antithesis of the attitude of the majority of those surveyed millionaires.  She’s happy with what she has and is living more worry-free than they are, I would wager.  I don’t necessarily endorse her course of action; but it’s her choice, she ran the numbers, and it’s what she has decided will work for her.  Bravo.

 

This is not to diminish the importance of ambition and having high aspirations.  We should aim high in life.  But if accumulating great wealth is the main purpose, know that achieving that will likely not yield happiness.

 

There’s one more finding from that survey that I’ll speak to in my next post.

 

Until next time,

 

Roger

 

“Some people don’t have friends or family.  But they are never satisfied with what they own, and they never stop working to get more.  They should ask themselves, ‘Why am I working to have more?  Who will get what I leave behind?’  What a senseless and miserable life!” Ecclesiastes 4:8 CEV