Is Being Rich Important for Living the Ideal Life?


I want to live an abundant life. I want to live to an old age knowing that my years were full of rich experiences and that I spent them doing something that matters. I’m guessing you do too.

The question is, in order to accomplish that aim, how important is money?

Basic economic textbooks will tell you that people are utility-maximizing creatures. Although we may lack the economists’ ideal of perfect rationality, I’d say for the most part this is true. We make decisions that will try to maximize our happiness (or whatever else we desire).

Most economics textbooks then move on to claim that money is the main method for doing this. We buy things we want. We trade our time for money by working. We then use that money to buy more things that we want.

My problem with this perspective is that there are many types of experiences money simply can’t buy. To me, it seems like there are many different currencies we pay to enjoy a richer life and money just happens to be one of them. Does focusing on one relentlessly cause us to neglect the others, and in doing so becoming materially rich but poor in experiences?

The Narrow Usefulness of Money

Money is good for a lot of things. Clothes, rent, food, entertainment and almost anything necessary for survival can be bought. If you’re not able to pay for your basic necessities, then money is blood and too little of it might kill you.

However I’d wager that’s not the situation for most of the people reading this website. The question isn’t whether money is important in the absolute (of course it is), but whether marginally having more money is important.

Even more specifically, the question is whether having more money is more important than having more of some other currency in life, and whether you should invest a lot of time maximizing money at the expense of the other.

A simple example of this dilemma would be going to a nightclub with friends. Here, money can mean the difference between staying at someone’s house and going to a luxurious party. There’s probably some difference in quality there, but it’s not huge. In either case you’re going to enjoy time with friends, simply the setting has changed.

Now consider a different life currency, like social skills or investments made in building deeper relationships. If you’re poor on this metric, then you probably won’t enjoy the party a lot. You don’t know the people well and you don’t have the confidence or skill to make friends easily.

Consider the same party, same setting, but that you have better social skills, or better relationships with the people you’re spending time with. Now the party is fun. Either you’re comfortably meeting new people, or you’re enjoying the company of good friends.

In my nightclub example money isn’t that important. At most, it can shift the setting of the party. It can’t make you a great conversationalist. It can’t make you best friends with the other partygoers.

If you had to ask me in this situation which I’d rather have–a full wallet or great social skills and great friends–it wouldn’t be hard to answer.

Life Currencies Other than Money

A quick google search of “how to make money” reveals 284 million entries. As a currency in life, people clearly want to know how to make more of it.

Go to any personal finance website and you can find detailed steps to optimize your investments, raise your income, clear debt and maximize the amount of money you have. I rarely see the same intensely methodical approach aimed at increasing other currencies in life, such as social skills or your ability to learn new things.

I’ve often heard people complain that they would love to travel the world and live in different places, but they don’t have the money. They’re often surprised when I tell them that my expenses while living abroad were actually less than living at home. If there was a limitation that held these people back from their dreams, it most likely wasn’t money.

For something like world travel, there are a number of life currencies I’d rate as being more important than money:

  • Ability to adapt to the unfamiliar
  • Extroversion
  • Travel know-how
  • Fluency in other languages
  • Self-confidence
  • etc.

Yet I’ve rarely seen books and blogs devoted to methodically improving your ability to adapt to unfamiliar environments.

Lack of money is often blamed for many problems in life. Poor guys wish they were richer so that more women would be attracted to them. Poor homebodies wish they were richer so they could travel the world. Poor students wish they had more money to buy a better education.


But in focusing, and often blaming, money for their problems, do these people miss the point?

Being Wealthy Without Being Rich

I’m faced with this dilemma in my own life. For years, my primary goal was to make enough money to live off my business. To be in a position where profits covered my living expenses with a safe enough margin that I didn’t need to stress over it.

At this moment, things are finally at a point where I can say I’ve mostly reached that goal. Many of my peers who have also reached this point then take the next logical step. They want to go from getting paid to do what they love, to getting paid extremely well to do what they love.

There’s nothing wrong with taking that step. My feeling is that, in taking that step and focusing on it obsessively, do these people miss investing in the other currencies of life they may be lacking?

In my own life, should my priorities be to go from covering my expenses to financial abundance, or as a 21-year old should I be investing in the many other assets that I haven’t had the time on this planet to accumulate? This is an interesting question I’ve only begun to ask myself.

As this blog is about the pursuit of the ideal life, I feel a big part of that is pinpointing exactly what that is for you, and then asking what are the currencies you need to create that life. And, if they aren’t money, how do you go about earning something you can’t count and society often fails to acknowledge?

Image courtesy of zzzack.

  • Barry Wright, III

    At the moment, I’m trying to use money as a tool for increasing 3 other currencies: time, mobility, and security.

    Security is particularly nice; by building up an emergency fund of money (which doesn’t have to be paritcularly large), you give yourself a lot more options and freedom. Switching careers becomes more feasible when you can afford 6 months at an unpaid internship. Travelling the world becomes more feasible when you can take unpaid time of work, etc.

  • Dave

    Throughout my life I’ve ridden a financial rollercoaster. My family struggled to afford many basics, drove clunkers that frequently broke down, but later I lived in a townhouse worth $1M and went to a private school in Switzerland. But if I’m still wondering how money factors in to a good life, I know it doesn’t matter as much as most people seem to believe.

    I think money is definitely an excellent tool if spent right. But I’m really still figuring out where it’s best to spend it. Spending for esteem or recognition however, is the one thing I know is a waste, and healthy, good quality local food practically necessary (for me at least).

    As for things I value more than money: friendships, fitness, my own emotional awareness, and cultivating an appreciation of life as a whole.

  • Wendy Irene

    Great blog post! If it were me I think I would decide exactly how much time I want to devote to my ‘job’ and taking the next steps. How many hours a day, days per week, and weeks per year, then try to stick to that, and use the other time to focus on the very important aspects of life that make you ‘rich’ that do not involve earning money. This can be re-evaluated ever year to best suit your life in the present. For example if one day you choose to start a family you may want to decrease your hours devoted to your job and increase hours devoted to family time.

  • Richard @ Lifestyle Design Unl

    Personally I think that money *is* important because money brings options and choices. Too much money can be a burden and I have no desire to be “rich” but having the money to enable me to make choices I want rather than merely those which I can afford provides a degree of freedom.

    Also personally speaking while my tastes are not particularly expensive or exotic, in terms of my own personality I find “budgeting” dull. I get no thrill from coupon cutting or finding bargains. No excitement from setting up household budgets so living too frugally I find cloustrophobic (sp?).

    So yes I believe money is important, but so too is the time to enjoy life and too many people sacrifice freedom of time for financial freedom. Really one of the key steps when creating an abundant life is finding the right balance for you – and we’re all different – between income and time.

    I’m interested to hear from other readers what you think the balance is for you? Are you hoping to work less or earn more? Do you feel you have free time right now or not?

  • David

    I believe you touched on something similar in an older post of yours.

    Yes, money is necessary in the absolute sense, but there is really just a threshold of money needed….and that threshold is really just a personal choice or preference. After that, other skills are worth more, but it is up to an individual to choose how much those skills are worth and what exactly those skills are.

    Thanks for the great post!

  • Brant

    Great post….makes you think for a minute on the real value of money compared with other things that dont get all the popularity votes that money does

  • Matt Williams

    We need money to subsist. We need cool people and experiences to thrive.

    That said, I feel that having too much idle time on your hands will often be a bad thing. It is often good to find some sort of ‘work’ that challenges you and that you enjoy. If this work gives you money to survive, it’s a win win, if it gives you too much money, use the surplus to amplify the challenges you set.

  • Eugene

    From the perspective of an old-timer in his early 50’s, being rich (as measured by the mean U.S. living standards) is critical to survival after entering the “second phase” of life. I don’t know about your family tree, Scott, but mine historically lives a very long time. However, certain aspects health is not so good. Thankfully with strict dietary and overall lifestyle management I will live a quality life for a very long time, if I can manage to stop abusing myself in my retirement years by continuing to work beyond my early to mid sixties.

    Therefore, if I expect to live a dignified existence after retirement that might last another half century or more, then I must be rich by the average American standard of living. That’s NOT rich as in New York Rich where you pay $6.5M for an apartment! Let’s put it this way, if I had $6.5M then I would escape from New York and retire in a very comfortable $0.5M house fully solar powered with all the amenities!

    That said, for the next fifty years I will require income equivalent or greater to (due to increasing health demands) the upper-percentile of my yearly income during the first fifty years of my lifetime.

    Scott, try imagining you magically had to pay yourself a comfortable income after you left school… and continuing to pay yourself that income for the next fifty years. Impossible? Then how do you think that you’re going to pay yourself that income for decades AFTER you’ve spun your wheels for fifty years dragging yourself out of bed, five out of seven days a week, just to make ends meet? It is simple math: If you save half of your income for the first half of your life, you can live off that savings for the second half of your life and then some if you are either cursed or blessed to live long enough.

    Rich is relative. Nobody is rich in places like New York unless they can afford its hyper inflated la-la-land economy. Compared to Bangladesh, that homeless man eating out of a garbage can is living like a king. It’s all relative, but there’s one constant: You must figure out a way to live comfortably without distractions from banal trivialities like paying the mortage, electric or medical bills! I contend that feat will take being rich as measured from the mean standard of living in our country. (I use the U.S. as a yardstick because after touring Italy on a budget in hellish heat during the summer of 2007, I’m convinced America is the way to go, warts and all.)

    Rich is a word that describes a game of musical chairs, where the whole population is dancing around a limited pile of resources (including real estate and access to essential goods and services in that pile). Every time the music stops when the economy collapses, only a few people get the bulk of those resources… the rest are left relatively empty handed. So whatever is in that pile of resources your nation is dancing around, Scott, is what makes you “rich” or something less, depending on how much you can manage to “grab” when the music stops… and how much of what you grab can be parlayed into a lifetime of meaningful living!

  • Modern Day Serf

    This post reminds me of the carpenter who couldn’t finish building the house because he ran out of inches. He had lumber, nails, and a hammer, but ran completely out of inches.

    That’s how I feel about money. If you take time to maximize all of the other life-currencies you’ve identified, you’ll never truly run out of life’s inches – money.

    Thanks for the post.

  • Nick

    I’m reminded of Timothy Ferriss’ Lifestyle Income Calculator…I think it was called. Basically, list all the stuff you need or would really like to have, list nothing more, and then go after it.

    I had a mentor, in a similar idea, basically say you need to figure out how much your ideal life is going to cost you- whether thats watching TV all day or visiting four star ski resorts- and find a job/mode of income to accomplish that.

    Sit down, list what you would really like/want out of life, figure out the monetary cost of such, and then go after it.

  • Dorothy Ser

    Interesting article and comments!

    I think it’s important to be rich as well as generous in order to live the ideal life, especially for those who weren’t always rich. Having the know-how of making loads of money is a gift, and simply having reached a financial goal such as becoming rich is a tremendous feat. I believe you’ve reached an ideal state when you’re making so much money that you’re able to share it with others.

    I would be willing to work my tail off to obtain wealth–BUT, it has to happen while I’m doing something that I love. I’m just afraid that my passion and interests might not prove to be that lucrative!

  • Christie

    In contrast to the idea that money opens up a world of opportunities and choices, I feel that we are often slaves to money. By “slave”, I mean that we get so wrapped up in the concept of money. Saving, investing, spending, etc. But beyond that…I fear that too frequently we begin to see things only for their monetary value.

    What may be helpful is to sit down and write down what prosperity means to you. What do you hope to accomplish in life? What kinds of things do you want to do? A bucket list, if you will.

    Prosperity to me is volunteering with a nonprofit on a regular basis. Prosperity is receiving my masters in social work. Prosperity is paying off my student loans! Prosperity means living in a community where I can bike or walk to work.

    My bucket list also has many measures of prosperity that are, well, immeasurable. For example, prosperity to me is being an open minded and inclusive individual.

    As a twenty three year old, I understand your quest. Like everything in life, I think the key is balance. Anyhow, good luck!

  • Raam Dev

    As someone who is 28 and chose to value experiences over money for the past 8 years (I’ve ran my own IT consulting biz, been a landlord, worked at a software startup, and now I’m a nomad traveling the world on a budget), I would say you should absolutely go with wherever your curiousity drives you.

    There are plenty of years left in your life to do other, less desireable things.

  • Scott Young

    Modern Day Serf,

    Great point. We wouldn’t want to run out of inches. 😉


    I’m certainly not arguing against saving. Many people live a rich lifestyle (that is, a luxurious one) and have retire broke. Other people live quietly and have savings to last decades.

    Also, I’m not quite sure retirement is something I’ll want to do. Certainly I want to move to a point where I’m not forced to work, but I think without some kind of creative purpose to my life I’ll be unhappy. If I’m in good health, I’d like to keep doing what I do until an old age.

    Perhaps also that latter sentiment comes from how truly blessed I am to do what I do. I love almost every aspect of my “job” and I’m still in disbelief that I’ve found a way to get paid doing it.


  • Jonny Gibaud

    Money buys Freedom of time and opportunity, but often what brings you the most joy doesn’t always cost the earth.

    – Jonny

  • Tom

    Money is just an easy way to measure of how influential you are. Bill Gates didn’t get rich because he had a printing press in his basement. He grew wealthy because he made things that people all over the world want.

    There are folks who think they don’t need actual cash money. Whether they’re sensible is up for debate. But there’s no denying that they need what money represents: a reserve of good-will and consideration among the people who can help them live their lives.

    In prehistory, people could only tap this reserve of good will in the (small) group of people who knew and trusted them. But in modern times — thanks to money — we no longer have to deal only with those who know us (or who know someone who vouches for us). Now, we have a much larger and deeper pool of people to draw help from: anyone who accepts our cash in exchange for goods and services.

    These days, the sensible question isn’t, “do I need money?” It’s, “Why don’t I have money, and how can I rectify the situation?”

  • liber

    Hi Scott!
    I have been reading your posts for some time now and I am amazed by the insights you are sharing with your readers. I just want to encourage you to keep on writing. Your insights are helping a lot of people around the world. You are truly making a difference in the lives of so many people including myself. You have said it perfectly that the best gift we can give to ourselves and to those around us is the constant improvement of ourselves. More power to you and God bless!


  • Rob

    Great post Scott, but you’ve sidetracked the most important currency known to man…


    It’s our most valuable, yet undersold commodity, and without this currency we have absolutely nothing…..

  • M. Ahmed

    Eugene wrote: “Compared to Bangladesh, that homeless man eating out of a garbage can is living like a king. It’s all relative, but there’s one constant: You must figure out a way to live comfortably without distractions from banal trivialities like paying the mortage, electric or medical bills! I contend that feat will take being rich as measured from the mean standard of living in our country. (I use the U.S. as a yardstick because after touring Italy on a budget in hellish heat during the summer of 2007, I’m convinced America is the way to go, warts and all.)”.

    Eugene I agree that it’s all relative. However, if your concern is how to get free from the worries about mortgages and monthly bills then comparing the US to other countires by “inches” (money) is overly simplistic. In Bangladesh more than 70% of the population live in countryside where they do not pay any rent or mortgages. That’s how they have lived for centuries. Not rich. But free from most of the worries you are concerned with. I have first hand experience in walking in the streets of New York and cities in Bangladesh. Given the choice of becoming homeless, I would choose the latter simply because of round the year warm weather compared to below minus temperature in winter in NY. That’s aside, let us come to your basic point. I am a Bangladeshi in my mid-forties who have lived in Toronto for last 22 years. Last year I dumped my stable job in Toronto and moved to Dhaka. In this trying time of recession when people are having difficulty in finding jobs I just quit mine. The annual pay of around 70K (Cdn $) was not making me rich, but it was above US mean. Now I am holding a job in Dhaka which is paying me far less than that (below US mean). But I am happy that now I could be with my parents during the rest of their remaining years, who are both in their seventies. Were my parents missing the “inches” to survive the rest of their lives? No, they were not. But I simply cannot imagine that they would spend their retired lives in loneliness in a senior citizen shelter (practically none exists in B-Desh) instead of being in a family environment. My story is not at all an unusual unique scenario here. I am not glorifying extended family concept over the lifestyle in the US. Both have their pros and cons. But I would bet that the people who are at the age group that you are concerned with are better off in many Asian countries (with warts and all) in terms of spending time without worries. It’s not extra inches but something else that makes the difference here.

  • Split Cents

    Rob has a great point, and something I’ve been thinking about a great deal lately. I have a friend who is constantly running in place, desperately seeking an extra buck here or there–she freelances, tutors, works occasional second jobs, etc. But she *never* accounts for her own time when deciding whether something is worth it. In the end, she ends up with the same income but is always exhausted and swamped.

    There are so many investments that don’t relate directly to wealth, but could ultimately pay much greater dividends in the long run: staying healthy, learning new skills, keeping friends, networking with colleagues, etc.

  • Scott Dinsmore

    This is one of the best and most appropriate blog posts I’ve read in a while Scott! So right on. I am a firm believer that money is only useful to a point, and that point is a lot lower than most people think. Once major needs are taken care of then all of lifes other abundances are what’s most important. I just finished a book Stumbling on Happiness that hit this right on the head. Society has to convince us that money is the end all goal so that the citizens will continue to do all they can to produce and consume and grow the economy. A bit self fulfilling. I think Ill choose your route.

    Very well done,


  • Scott Young


    Yes–money is often correlated with value. But it’s a danger to confuse things simply because they often go in the same direction.

    For example, traffic for this blog. I could rightfully argue that traffic is a good indicator of value and helping people with their problems. After all, if I have 10,000 visitors I’m likely helping more people than if I have 100. However, if I make traffic my objective, I may make decisions which no longer help more people while increasing traffic. I might start writing flashy link-bait articles which get tons of traffic from websites with visitors who barely read more than the headlines.

    The same is true with money. Yes–on the whole, earning more money tends to mean you’re producing more value. But that’s not how we make decisions. I don’t choose between being a homeless person subsisting on welfare and being a pioneering entrepreneur billionaire. Decisions are made at the margins: I can choose to focus on one project today instead of another.

    In these margins, the correlation between money and value is a lot weaker. For example, I know of several steps I could take that would likely increase my income without significantly increasing my value. I know of dozens (if not hundreds) of steps I could take which could increase the value I offer without making me a cent richer.

    So, yes, I agree with you that money is (ideally) a reward for doing good work and helping society. However, if helping society is truly your goal (and not simply being rich), it’s important to note that there is a distinction between the two and they don’t always lead to the same decisions.


  • AH

    quote : Money is just an easy way to measure of how influential you are. Bill Gates didn’t get rich because he had a printing press in his basement. He grew wealthy because he made things that people all over the world want.

    This is beautiful !!!

    however, might not always reflect the reality……
    for example, an old-aged 60 years old man doing a perfect cleaning job needed all over the world want…….but far from getting rich, he just barely got enough for daily food……

    Different nature/kind of jobs paying different amount of dividend……
    Many smarties choose well-paid jobs without necessarily matching their interests……

    Cleaning shits are VERY important job for the public all over the world want…….otherwise unclean shits left in a place can cause lot of problems……BUT cleaning shits are just not well-paid !!!

  • John

    The idea of being rich is one which is determined by each person. Some people won’t be rich even with 10 million bucks. Others can do quite well with 50 grand a year.

    It’s all a matter of how much money it takes for you to be free to do the things you love and experience life to the fullest. For a lot of people, the actual sum needed will be a lot less than what they may believe is true at the moment.

  • lynne

    Hi, great post. Money is important, it is a necessity in our life but there are more important things that money can’t buy. Your insights made me think… Is being rich really important? Thanks for sharing. Great post.

  • Cheese Louis

    Ideally, you’d want to be able to live comfortably without worrying about daily expenses. It is good to be able to splurge sometimes with minimal worrying. You also have a point that putting energy into other facets of life, such as human relations is equally important. Nobody wants to be destitute.

    So yes, superb article. It hit the nail on the head :3

  • Cheese Louis

    Accurate! :3

  • Cheese Louis

    Ideally, you’d want to be able to live comfortably without worrying about daily expenses. It is good to be able to splurge sometimes with minimal worrying. You also have a point that putting energy into other facets of life, such as human relations is equally important. Nobody wants to be destitute.

    So yes, superb article. It hit the nail on the head :3

  • Cheese Louis

    Accurate! :3

  • Life on Rainbow

    Ah yes! More than anything, abundance is a state of mind.

  • Life on Rainbow

    Ah yes! More than anything, abundance is a state of mind.