Is it OK to Want to be Rich?

A lot of the articles I read around the personal finance sphere have to do with spending less than you earn, investing wisely and not buying lavish things.  If you’ve read more than a handful of blogs you probably know that the formula to financial success is not all that difficult.  Bloggers like Mr. Money Moustache actually make it seem pretty easy: want less, save more, downsize your home, etc.

But if you’re like me, you might enjoy nice things from time to time.  I love eating out, traveling, shopping and even spending money on the people I care about.  I don’t think there’s anything wrong with having the best of both worlds actually.  You can save money, follow a budget and invest wisely whether you make 100K a year or $1 million a year but your tastes and preferences are going to change based on how much money you make.

Surrounded by Wealth

One of the downsides to living in such a beautiful place like Newport Beach, CA is that there is immense wealth all around you.  Just down the street from my modest 2 bedroom apartment is a community full of multi-million dollar track homes.  And five minutes further are houses with exquisite and breathtaking ocean views, I can only imagine what the price tag on those places would be.  For someone like me who has lofty financial goals and career expectations, I’m always wondering what it would be like to live this lifestyle.  I can’t help it when I’m surrounded by millionaires and multi-millionaires on a daily basis.

I don’t know what many of these people do but it’s clear that they are making a lot of money.  My personal goals have never included owning a 5 million dollar mansion and an awesome yacht but obviously I don’t want to live in the same 2 bedroom apartment for the rest of my life.  I’d probably be happy in a nice modest home near the beach but if I make enough money who knows where I’ll want to live.

Keeping Perspective

Personal finance is all about keeping things in perspective.  I like nice things but since I only make X dollars per year, there are certain things I can buy and there are certain things I can’t/won’t buy.  It doesn’t make sense for me to go out and buy a car that’s half my yearly income or rent an apartment that costs me one full paycheck every month.  I think it’s perfectly fine to want to drive a brand new Land Rover but if you’re only making 100k a year you’re going to have to make big sacrifices in other areas in order to do so.  It’s important to be content with your lifestyle no matter how much money you’re making.

The spending habits that you employ now will likely follow you for the rest of your life.  So if you’re able to max out your retirement accounts and save money every month on a 50k a year salary, you’ll be able to comfortably afford the nicer things in life as your income goes up.  There’s no point in making more money if your always going to spend close to what you earn.

The Millionaire Next Door

I read the book The Millionaire Next Door a few months ago and it was pretty eye-opening to say the least.  The authors actually back up their findings with years of research and studies instead of just stating their opinions on what millionaires look like.  The whole book can pretty much be summed up in a couple sentences though:

Most people think that millionaires wear expensive clothes, buy nice watches and drive nice cars but that couldn’t be further from the truth.  Research has shown that most millionaires live well below their means, drive used cars and tend not to buy fancy things.

This might seem counter-intuitive since it’s almost human nature to associate someone driving a brand new BMW to having lots of money.  But as the authors show over and over, a lot of these people who are extremely successful in business and their careers are actually complete under achievers when it comes to their net worth.  According to the authors, most of the people who drive really nice cars and buy extravagant things don’t have very high net worths relative to their salary.  They might be making hundreds of thousands of dollars a year but they are spending even more!

Compare that lifestyle to the frugal business owner who makes a comfortable 100k but saves money every year and eventually becomes a millionaire.  That lifestyle doesn’t sound nearly as sexy but it works.

Finding Financial Happiness

The one takeaway that I got from the book is that the people we most often associate with being rich aren’t always that rich.  I think a lot of us(including myself) look at someone driving a brand new Audi A8 and say, “Man, what a life that guy must have.”  But that guy driving the Audi probably says the same thing when he sees someone driving a brand new Ferrari.  It’s human nature to want what other people have.  The hardest part about finding financial happiness is to be content with what you have.  If you’re always wanting more, then no amount of money is ever going to make you happy.

Readers, what do you guys think?  Is it Ok to want to be rich?  Do you think there is a salary within reach that will make you happy or do you think once you start to make more you’ll want more?

-Harry @ the Four Hour Work Day

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I'm Mr. 4HWD, I started this site because I think everyone should be able to work at a job they enjoy and still have time to do all the fun stuff. I don't want to retire early, I want to work four hours a day on the things I love for the rest of my life.

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  1. Brent says

    Thoughtful post. Good to consider in 2014 where we are looking for fulfillment. Money is useful but as an end unto itself will never satisfy. THX!

    • says

      Thanks Brent, couldn’t agree more. I’m realizing more and more that while money is nice to have, there isn’t a correlation between how much money you have and how happy you are.

  2. Joe says

    I was just talking to a buddy of mine who also grew up by modest means in California and like me, is now living in the epicenter of wealth in NYC. It’s disturbing how jaded my perspective on income/wealth has become. I used to think that if I could “just” make around $X that I would be able to afford everything that I really wanted in life. Now that I am constantly surrounded by extreme wealth, that number has ballooned to $X + $200K… I’m still not sure if this is depressing (as that is a daunting goal, yet still considered an underachievement in the NYC psyche) or if it will motivate me to achieve more, but it’s incredible how quickly my perspective changed based on my environment.

    • says

      Yea it’s tough living in a city where you’re surrounded by wealth since it makes you feel like you have to make more and more. Personally, I’m going for a little of both: trying to achieve more and more career/salary-wise but also trying to be happy/content with what I’ve got.

  3. Yong says

    Very nice post, Harry. I completely agree with you that $$$≠:-). Now I need to look for my true happiness!

    • says

      Thanks Yong, you’d be surprised how easy it is to become financially independent if you have a good paying day job. Combine that with other sources of income and you’ll be able to set a plan to become less and less dependent on your day job income. Work becomes a lot more fun when you don’t need the money.

  4. says

    I don’t see any issue in wanting to be rich, but I think rich is obviously different to different people. I don’t need a flashy car to feel rich, I just need to work part time :)

    • says

      It sounds a little cheesy, but you’ve got a great mind set. A good analogy is the way you feel about your partner. If everyone else told you your husband was not that great but you felt the complete opposite, would you listen to them? Would you keep trying to trade up until you found someone better or would you be happy with what you have? I’d take the latter :)

  5. says

    I can relate to the competing philosophies that you’re trying to sort through – enjoying nice things and wowed by signs of wealth, yet aware that they don’t necessarily bring happiness and that they might actually be signs of debt and vulnerability. I think that when something “nice” makes you happy, you have to consider how long that happiness lasts. If it’s very short term, then the “happiness” might actually be a thrill of pride or vanity. If it’s long term, it’s probably authentic and worth the investment.

    • says

      That’s an interesting way to look at it. I think I kind of already do that since I tend to spend money on things like vacations and experiences instead of more materialistic things. Some people do get lots of happiness from showing off their latest gadgets, cars, etc though like you say I think that pride/vanity will wear off quickly and it needs to be replenished by the next extravagant purchase.

  6. says

    I used to live in CA also and my ex-husband and I made a nice combined income. We had a lot of toys and a nice house, which we could afford, but in the end, these things didn’t make me happy.

    I agree with you that many financial blogs get too caught up in tracking every dime and using the word ‘frugal’ or ‘cheap’ too much. However, I have read Mr. Mustache and I love his views. I think we need to be more resourceful in how we live instead of just use a lot of resources. The challenge of that brings huge amounts of satisfaction in itself.

    I highly recommend the documentary “I AM”, which is from Tom Shadyac, a big Hollywood producer. He sold his multi-million dollar mansions and toys, downsized significantly and has increased his happiness tremendously. He lives happily and simply in a trailer park, although it is overlooking the ocean in Malibu. :)

    • says

      Hi Sue, thanks for commenting again :) I’ll definitely check out that documentary.

      I think that’s really the question you have to think about though. Would you rather work 80 hours a week and have a ton of money, possessions, etc or work 20 hours a week and have way less but a ton more free time? I lean more towards the latter although I want to really maximize the 20 hours a week that I do work and make just as much as someone doing the exact same thing who works 40 hours a week.

  7. says

    Not all people who are ‘rich’ live like kings. Having some serious money set aside and a good networth allows one to not worry about ‘tomorrow’ that much, be able to retire earlier, travel more etc. These are not bad things. I don’t wish to be rich, but I do wish for us to be able to live a decent life and have a lot of flexibility.

    • says

      That’s correct, most people that look rich and act rich actually aren’t according to the book I read. I like your definition of rich since that’s sort of what I’m going for too. I don’t want a lot but I’d like to have enough money to live that lifestyle.

  8. says

    I agree with you that it’s human nature to be envious of what others have. However, we don’t see the full picture of these people’s lives, and that guy driving the brand-new Audi may be in debt to his eyeballs. It’s important to be content where you are and have reasonable expectations about your future. It’s also important to make goals and if you’re goal is to be rich, I don’t think that’s a bad thing. If I were a millionaire, you better believe I’d take full advantage of my income through travel, good food and a few nice toys. But I hope I would keep a healthy respect for how hard I worked to get to that point and not blow it all on pricey purchases. Great post!

    • says

      Yep that’s exactly right. I’ve always had a hunch that that was the case but now I have empirical evidence from the book to make my case :)

      I think we’re on the same boat because to be honest, I want to have a lot of money to enjoy some of the finer things in life. But I think a lot of the habits I employ now(saving, spending and investing) will carry over to later on in life too when I have more money.

  9. says

    Yes. It’s like asking who doesn’t want to be millionaire? :)
    It’s a no brainer that it is okay to want to be rich. Money is amazing, but being a miser is not amazing. So, the point is that it is good to want to be rich, be rich, and try to be rich, but bad to be the opposite of the things I listed previously.

    • says

      Thanks for commenting David, not sure I agree with you though. The point I was trying to make is that if you’re always wanting more money instead of being happy with what you have you’re never going to achieve your financial goals. There’s no correlation between money and happiness contrary to popular belief.

  10. says

    Harry you make some great points. Most people who are showing are not the really wealthy ones. As a tax attorney I see all kinds of people of all means and the ones you least expect are the richest financially. However, the most important point is there is other ways to be rich and being spiritual is one that is not even talked about most of the time. The race to riches only gets you so far. Most studies have shown that more money does not make you more happy. Anyway very nice post and very thought provoking.

    • says

      Thanks Steven. It’s definitely counter-intuitive that having more money doesn’t make you happy since so many relationship problems stem from money but the science says it’s true. I think it’s important to try and be happy no matter how much money you have and as/if you make more, you can enjoy some of the nicer things in life.

      • says

        I think that relationship problems stem from money management, not from the amount of money. Couples need to be on the same page with regards to money management, but that is not something that most people talk about before entering a relationship.

        • says

          That is a great way to put it, I’ll tell my fiancee that next time she wants to spend more money :) Money is a topic that’s not discussed and it really should be – a lot of the questions I get have to do with how to deal with a SO in money problems, debt, etc


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