Building Wealth Without Making Your Bed?
Living Happy
I have a wicked weird relationship with money.
I’m afraid of it.
One of the big family stories growing up was that my grandfather (who became a socialist) was working on Wall Street when the stock market crashed in the 1920s.
He said he watched a man he knew jump from a high window.
Another story (about that same grandfather) talks about how he and his brother-in-law tried to get into the dump barge business in hopes of getting rich. They bought a boat and a barge and started to tow trash across the Hudson River from Staten Island to New Jersey. The barge, towed by a heavy cable, started to sink.
My grandfather did not know how to swim.
I grew up thinking: If you try to get rich, you will see people die or die yourself. Not a super healthy way to think. It’s also not super healthy to think, “Oh, I HAVE to be super wealthy. How can I hack my way to richness? I am not a success unless I make over $300,000 a year.”
Success and happiness are weird bedfellows and sometimes they don’t.
Elizabeth Dunn and Chris Courtney write for Harvard Business Review,
In a recent study, more than 1,000 students graduating from the University of British Columbia completed an assessment measuring whether they tend to value time over money or money over time. The majority of students reported prioritizing time — but not by much. Nearly 40% reported prioritizing money.
To find out how this choice correlated with their cognitive and emotional well-being, the students’ level of happiness was measured both prior to graduation and a year down the line. Among other measures, they were asked to report on their life satisfaction by answering the question, “Taking all things together, how happy would you say you are?” on a scale from 0-10, with 0 = not at all and 10 = extremely.
The researchers found that the students who prioritized money ended up less happy a year after graduation, compared to their classmates who chose to prioritize time. The results remained the same even after controlling for their happiness before graduation and accounting for their various socioeconomic backgrounds.
Of course that doesn’t mean that you should turn down the next raise you’re offered. A mountain of evidence shows that, on average, wealthier people are happier. But making lots of money will not inevitably boost your happiness. How you spend, save, and think about money shapes how much joy you get from it.
They also write that seeing money in your checking or savings account tends to make people happier than their income.
There are ways, they say, that money can be used to increase happiness. Those are:
Spending money on experiences rather than things.
Spending money on others.
Spending money on things that give you more time.
But how do you get that money to spend? Tim Denning has a recent popular article all about the ways that don’t help you build wealth. Spoiler: Making your bed first thing in the morning doesn’t magically increase your income.
He suggests the best way to get that money into your savings account is to have
multiple streams of income.
What are those streams?
He suggests:
“At least one passive income source
A portfolio of diversified financial assets
A network of others who are also building wealth
A consistent habit of taking risks
A basic financial education
And to run a business or own part of someone else’s.”
Easier said than done maybe? But possible. I think that “basic financial education” bullet point might need to be the first step. And I’m going to conquer my fear and get started on that today.
How about you?