{"id":1753,"date":"2010-07-05T06:32:34","date_gmt":"2010-07-05T13:32:34","guid":{"rendered":"https:\/\/www.scotthyoung.com\/blog\/?p=1753"},"modified":"2018-04-03T08:17:48","modified_gmt":"2018-04-03T15:17:48","slug":"is-being-rich-important","status":"publish","type":"post","link":"https:\/\/www.scotthyoung.com\/blog\/2010\/07\/05\/is-being-rich-important\/","title":{"rendered":"Is Being Rich Important for Living the Ideal Life?"},"content":{"rendered":"

\"Money\"<\/p>\n

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\u2019m guessing you do too.<\/p>\n

The question is, in order to accomplish that aim, how important is money?<\/p>\n

Basic economic textbooks will tell you that people are utility-maximizing creatures. Although we may lack the economists\u2019 ideal of perfect rationality, I\u2019d say for the most part this is true. We make decisions that will try to maximize our happiness (or whatever else we desire).<\/p>\n

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.<\/p>\n

My problem with this perspective is that there are many types of experiences money simply can\u2019t 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?<\/p>\n

The Narrow Usefulness of Money<\/h2>\n

Money is good for a lot of things. Clothes, rent, food, entertainment and almost anything necessary for survival can be bought. If you\u2019re not able to pay for your basic necessities, then money is blood and too little of it might kill you.<\/p>\n

However I\u2019d wager that\u2019s not the situation for most of the people reading this website. The question isn\u2019t whether money is important in the absolute (of course it is), but whether marginally having more money is important.<\/p>\n

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.<\/p>\n

A simple example of this dilemma would be going to a nightclub with friends. Here, money can mean the difference between staying at someone\u2019s house and going to a luxurious party. There\u2019s probably some difference in quality there, but it\u2019s not huge. In either case you\u2019re going to enjoy time with friends, simply the setting has changed.<\/p>\n

Now consider a different life currency, like social skills or investments made in building deeper relationships. If you\u2019re poor on this metric, then you probably won\u2019t enjoy the party a lot. You don\u2019t know the people well and you don\u2019t have the confidence or skill to make friends easily.<\/p>\n

Consider the same party, same setting, but that you have better social skills, or better relationships with the people you\u2019re spending time with. Now the party is fun. Either you\u2019re comfortably meeting new people, or you\u2019re enjoying the company of good friends.<\/p>\n

In my nightclub example money isn\u2019t that important. At most, it can shift the setting of the party. It can\u2019t make you a great conversationalist. It can\u2019t make you best friends with the other partygoers.<\/p>\n

If you had to ask me in this situation which I\u2019d rather have\u2013a full wallet or great social skills and great friends\u2013it wouldn\u2019t be hard to answer.<\/p>\n

Life Currencies Other than Money<\/h2>\n

A quick google search of \u201chow to make money\u201d reveals 284 million entries. As a currency in life, people clearly want to know how to make more of it.<\/p>\n

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.<\/p>\n

I\u2019ve often heard people complain that they would love to travel the world and live in different places, but they don\u2019t have the money. They\u2019re 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\u2019t money.<\/p>\n

For something like world travel, there are a number of life currencies I\u2019d rate as being more important than money:<\/p>\n