The Money Hamster Wheel, Part 1: Identifying The Problem

I started looking into financial independence because I simply couldn’t imagine doing what I was doing every weekday at that time for another 30 or 40 years. Some people know exactly what they want to spend their life doing, and it also pays the bills and then some. I was always envious of those folks. Strangely, I never really felt that making more money was the final answer. I saved diligently in order to quit my job and go back to school and explore alternate paths.

This week, I’ve been pondering a longread by Lawrence Yeo about his philosophy of money at How Money Forever Changed Us. It’s a very high-level exploration of how money both solves and causes various conflicts in our lives. This culminates into what he calls the Money Hamster Wheel:

The questions posed are slightly different than you may have seen elsewhere. Does working a job that doesn’t fulfill our need for purpose and meaning really take something away from our identity? Is that identity loss what we are really trying to replace by spending money? Why is it so rare to find people that are truly happy and aligned with their work and the rest of their lives?

You’ll have to read the entire article to understand all the spokes of his wheel (although I’m still not sure I do completely), and while Yeo admits that it is not possible to fully “get off the wheel”, you can do something:

When I look at each spoke on the wheel, I view them as potential opportunities to slow the whole thing down. If we are aware of each mechanism, we can notice when we’re operating under them, and lessen their impact in turn.

The hamster wheel is a great metaphor. Over time, I’ve accepted that financial independence will always be rare. I used to think that higher income = more wealth = more stability. But then I noticed that certain things don’t change when people make $75k vs. $150k vs. $300k a year. The neighborhood changes. The car changes. Yes, even average net worth changes (but rarely enough to 33x expenses before age 65). Unless they hit a huge windfall in the multi-millions, most of them will work until they are 65 or older. Most will say they like their job okay, but they would never do it for a 25% pay cut. Most will never be able to handle an extended period of unemployment. Earn more, spend more. Still spinning on the wheel. Maybe that’s just how it’s meant to be? Yeo presents a solution:

But if we take the time to look closer, we’ll see that a middle-ground exists. A place where our fears could be calmed, and our desires could be curtailed. A place where the quest for money falls only to what is essential.

In a world where neither scarcity nor abundance will do, perhaps the closest solution to the great paradox comes down to one principle:

The ability to recognize when we have enough.

Sounds easy, but shockingly hard. “Enough” is not encouraged in our culture. I still struggle with it as well, or at least I’m afraid I won’t be able to keep up the fight forever.