Here’s a refreshingly blunt quote from Scott Galloway’s article Yay Capitalism via It Is Always About The Money via Abnormal Returns:
Wealthy people claim they don’t think much about money. That’s bullshit; they are obsessed with money. The notion that rich people don’t think about money is an attempt to dampen resentment (e.g., revolution) from the 3.5B people who have fewer assets than the wealthiest 12 individuals. What, like, rich people got there because they are just so benign and talented, it just happened (oops, I’m rich)? People who tell you to follow your passion are already rich. They have doggedly pursued a path and have been obsessed with success for a long time. They want to sound inspirational and give you a sound bite, because the truth that success requires 60–80-hr weeks for several decades doesn’t get applause in graduation speeches.
Every wealthy person I’ve known measures their net worth in frightening detail, and often. You have to stay nimble, or you stand to lose a lot. We live in a capitalist society, and the amount of money you have is a forward-looking indicator of the effectiveness your healthcare, the comfort of your home, the harmony of your marriage, and the quality of your children’s education.
Regarding that last sentence, I might agree up to a certain level of wealth, but after that I don’t think better healthcare or a more comfortable home is the reason that the wealthy still keep worrying about money.
I think it’s just another weird artifact of human psychology. If we can keep making money, it’s really hard to stop. Most wealthy people still work. They may say that they just like work (“passion” again), and that may be true, but another major reason is they want to keep making money. Earning money provides a measure of self-worth. Earning money provides a sense of security. Certain jobs may come with respect and power. (They might say they would it for free, but they wouldn’t for long. Every job has annoying parts that you accept because of the money.) If the hardest part of retirement is building up the pile, the second hardest might be saying no to adding more to the pile.
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I think wealthy people are typically wealthy because they’ve done things like track their spending and Net Worth very carefully for years and years. That’s a habit that is hard to break.
Freedom is directly correlated to income. Generally speaking, the more income you have, the more freedom you have. At every income level there is a certain amount of freedom that comes with it. And there is always more freedom to obtain with more income. If you don’t want more freedom, that’s your choice, but it’s still there for the taking. Truly ambitious people want more freedom and don’t have a stopping point; every achieved goal is followed by another more lofty goal.
Also, this mantra can be said another say: Freedom is not free.
Hello, Scott. With all politeness, “freedom is directly correlated to income” is true, but only among those with common sense enough to live beneath their means. I was never a “high income” earner, but worked with those who were, and I can’t tell you how many times I saw these people going deeper and deeper into debt over mansions, vacation homes, exotic vehicles, boats and airplanes.
The excellent book “The Millionaire Next Door” addresses the income/spending relationship much more eloquently than I could hope to.
I made about 25% to 33% of what my former clients made and was able to retire very early while some of those high-earners will be working until they die. It’s not how much you make, it’s how you use it.
I thought this was kinda self evident especially to me..
It becomes like an addiction… to make more money..
my parents are millionaires although they still think they are middle-class and Dad still works (although that’s for himself so he loves being the boss) and even though they are past the point of worrying about money, they certainly don’t want their networth to go down.. even by a little bit.. its a quirk of human psychology especially those who are habitual savers
There is also quality of Life. One wonders when spending all of your time ‘working’ or ‘earning’ more wealth needs to take a backseat to enjoying the fruits of your labors, which may include time spent with loved ones. When is enough, enough?
I totally agree with Scott. Money buys freedom. If you are diligent and logical in managing and projecting your income and expenses then you know when enough is enough. Debt and irrational consumption are the modern versions of slavery and indenture-tude. And that so many people are in a hole they will never dig themselves out of is a testament to the effectiveness of the constant onslaught of brainwashing, advertising and propaganda that permeates every channel of communication and entertainment.
Excess money, e.g. “wealth” is also referred to as “F” you money, because the more you have, the harder someone else is trying to “F” you out of it (friends, family, swindlers, contractor, salespeople, government, etc). Humorous example but a grain of truth how one has to become more vigilant of it.
Mr. Katy is partly right, I think. ‘F-U’ money, though, I was under the impression it meant that if you ever were in a job you grew to hate, or were asked to work overtime, a weekend you had plans for, or were demoted, passed over, or told to do something sketchy, you COULD just say, ‘F-U’ to the boss, if you wanted, instead of having to just say yessir (or ma’am). Obviously, if you WERE the boss, having subordinates with financial security could be tough, LoL.
Yes, I agree that is a good definition as well. I have to credit the great Howard Stern for the example I wrote of.
Humphrey Bogart is credited with the version Greg mentions. He saved money from his early roles so if he was ever offered one he did not care to take he could say F-U.
My dad was a millionaire yet he was incensed when his company finally “early retired” him at 77. I’m wealthy by most standards and retired slightly early but I still consult and haven’t had to touch my investments in the three years since I left my career behind. I do not need to earn but it is hard to stop. I do not advertise my consulting abilities anywhere but people still seek me out and I have yet to refuse a job even though the income does not materially change my net worth. I enjoy the challenge of the work and the feeling of being able to contribute but the fact is I also really really enjoy earning money, money that I cannot possibly spend. You explained this weird behavior very well, excellent post! In my defense I try to limit my work to one or at most two days a week.