Starting my next set of 50 posts now. Haven’t had a comment in almost two months, but we keep pressing forward with posts about retired life.
I’m doing something different this time. Below is an excerpt from a book titled The Psychology of Money by Morgan Housel, most recently released in 2020. See what you think:
“The highest form of wealth is the ability to wake up every morning and say, ‘I can do whatever I want today.’
People want to become wealthier to make them happier. Happiness is a complicated subject because everyone’s different. But if there’s a common denominator in happiness- a universal fuel of joy- it’s that people want to control their lives.
The ability to do what you want, when you want, with who you want, for as long as you want, is priceless. It is the highest dividend money pays.
Angus Campbell was a psychologist at the University of Michigan….Campbell wanted to know what made people happy. His 1981 book, The Sense of Wellbeing in America, starts by pointing out that people are generally happier than many psychologists assumed. But some were clearly doing better than others. And you couldn’t necessarily group them by income, or geography, or education, because so many in each of these categories end up chronically unhappy. The most powerful common denominator of happiness was simple. Campbell summed it up:
‘Having a strong sense of controlling one’s life is a more dependable predictor of positive feelings of wellbeing than any of the objective conditions of life we have considered.’
More than your salary. More than the size of your house. More than the prestige of your job. Control over doing what you want, when you want to, with the people you want to, is the broadest lifestyle variable that makes people happy (Mike’s editorial comment: This is the #1 lifestyle variable out of many that make people happy. The author does not claim that this variable makes everyone happy.).
Money’s greatest intrinsic value- and this can’t be overstated- is its ability to give you control over your time. To obtain, bit by bit, a level of independence and autonomy that comes from unspent assets that give you greater control over what you can do and when you can do it.
- A small amount of wealth means the ability to take a few days off work when you’re sick without breaking the bank. Gaining that ability is huge if you don’t have it.
- A bit more means waiting for a good job to come around after you get laid off, rather than having to take the first one you find. That can be life changing.
- Six months’ emergency expenses means not being terrified of your boss, because you know you won’t be ruined if you have to take some time off to find a new job.
- More still means the ability to take a job with lower pay but flexible hours. Maybe one with a shorter commute. Or being able to deal with a medical emergency without the added burden of worrying about how you’ll pay for it.
Then there’s retiring when you want to, instead of when you need to.”
The author’s careful not to put specific dollar amounts down for these stages, or for venturing an estimate for how much wealth one needs to accumulate before retiring happy. Nor does he try to differentiate between the subjective states of being content and being happy. For what it’s worth, I’m sure there is a significant percentage of the world population with little or no wealth who are quite happy- or content. And I’m guessing there’s more than a few homeless individuals in the world who are happy to go day-to-day without a dollar to their name.
Thoughts?