Real Wealth Cannot Be Bought With Money
In your quest for Financial Independence, don’t forget to nurture these 6 things
“To be without some of the things you want is an indispensable part of happiness” — Bertrand Russell
I often think about the above quote from polymath and philosopher Bertrand Russell. His book, The Conquest of Happiness, is one of modern day’s most useful self-help books despite being published back in 1930, and contains wisdom for all of us, including those striving for Financial Independence.
Perhaps one of the reasons the FI/RE movement has become so popular is that it gives us a goal to strive for, and a very easy (numerical) way of tracking our progress. We can’t track happiness through numbers, but we can track net worth. Every month we can strive towards a goal, and while some part of the journey to FI can be difficult, challenging or boring, we derive a form of happiness by pursuing a goal and not yet getting there.
However some people take FI/RE to the extreme and miss out on many of life’s little joys, by focusing only on the numbers and not on life experiences.
Saying no to dinner with friends, holidays or other experiences because of the cost can be detrimental to your quality of life right now, even if it is in the pursuit of financial independence later down the line. In one of Afford anything’s Podcast, Paula Pant and friend Emma Pattee discuss getting to their FI numbers and the regrets they had getting there. Their regrets include being too obsessed with numbers along the way, missing out on intimate relationships, unique experiences and family moments because of money.
While the Financial Independence / Retire Early movement feels like a before and after situation (before ‘retiring’, after ‘retiring’) in reality it is much more a journey, and contains a whole host of wisdom that you can pick and choose to integrate into your life. The focus is often about money, saving, investing and frugality, but there are also other things you need to take care of to live a good life now.
While good money management is essential for a comfortable life, I would argue that these 6 things are even more important than money for a good life;
Health
No matter how rich you are, money cannot buy real health. Health is life’s greatest wealth. Money can treat symptoms and pay for access to the world’s best surgeons, but money won’t stop you from getting sick in the first place. However, once ill, we would pay anything to get back to good health, therefore healthy habits and preventative measures are essential to your health (but also preserving your wealth).
A healthy lifestyle doesn’t cost much money, and in fact, usually turns out to be cheaper than an unhealthy lifestyle (cigarettes, booze and fast food are all highly taxed because of their negative effects to society). And while Hollywood’s plastic surgeons are trying their hardest, you still cannot buy a healthy body — a person’s body reflects their lifestyle and their exercise routines.
Friendships
We all know this — friends cannot be bought with money (and neither can love). Friendships are built on time spent together, common interests, genuine care for the other person, and energy invested in keeping the connection alive. You will always find people to come and hangout on your private yacht with you, but would these people ever come and spend time with you if you were bed ridden? True friendship and love can never be bought, but it can be lost through carelessness.
Contentment (aka Happiness)
Contentment and happiness are only partly derived from money, but only to an extent. A study in 2010 by Daniel Kahneman and Angus Deaton showed that while ‘emotional wellbeing’ was generally higher for those with a $75,000 income compared to $50,000, the effect of more money after $75,000 was negligible, and that a yearly income of $100,000 offered roughly the same ‘emotional wellbeing’ as $75,000 per year.
Money has the power to take away hardships, it can pay for a comfortable apartment, food and other bare necessities, but as the study shows, after our basic needs are met, money doesn’t contribute to happiness as much as we might think. We need to decide what are the things that make us happy and then design our life around those things, and this is again where money can help, but it can also be done without vast amounts of money.
Time
Time is one of life’s greatest assets, and everyday we get less of it. And yet we spend time as if we had an endless amount. Money can always be re-made, but we will never get time back. We should always balance our requirement for money with our requirement for more free time. For each of us this equation is different, but as well as our FI number, we also need to know what we are working for and how we want to live our lives.
Time is something we don’t consider enough in the FI/RE movement. If you hate your job and are just doing it because you hope to become financially independent in 15 years, that is a lot of wasted time that could be spent enjoying your life in some other way. We often put finances first, not wanting to leave a job that we dislike, for a lower paid, potentially higher enjoyment alternative. Is one more year in a job we dislike worth the money? Or could we find alternatives that would cover our cost of living and change the way we use our time?
Creativity
I am always in awe of creatives who put their passions first. Those who work a part time job to survive while pouring their energy into music, writing or art. They take their passion seriously and over the years build up real skills. Money can buy equipment and lessons, but it can never buy the years of experience someone else has put in.
It is easy to say that you will start painting or writing that novel once you become financially independent, but in reality, life after FI probably won’t look much different except for the 8–10 hours a day you now get to fill instead of it being filled for you. Money won’t buy you creativity and Financial Independence won’t buy you motivation, so whatever you are passionate about should be a priority in your life today.
Freedom
Money can buy a sense of freedom — it can give you the power of being able to walk away from any situation at any time (aka F**k you money). Money also gives you options — you can try out new things, move to different places, even take a paycut to try out a different job, or a sabbatical to take a mini-retirement.
However freedom means different things to different people, and it is important for you to understand what it means for you. Jeff Bezos is free to do and buy whatever he wants, but he is not free to walk down the street or go to Burning Man and enjoy dancing with strangers. Some people are on a great path to FI but burdened by 2–3 mortgages and therefore cannot up and leave to travel the world, as they cannot afford to leave their jobs. Only you know what freedom feels like to you and so you should take the time to figure out what it looks like, before you craft a plan to get there.
In a world where money seems so important, it is important to remember that it is only one aspect of a good life. Money cannot buy some of the best things in life, and money should never be chased at the expense of friendships, time, freedom or health. Financial Independence is about living the life you want, not simply ‘being rich’.
