When we think of wealth, we typically think of money and possessions. Many Americans dream of joining the coveted cohort of the “wealthy,” by which they mean those with expensive mansions, sleek sports cars, and millions in cash and investments.
But should wealth really be equated with these things? I would argue that it should not. We tend to confuse the truest, deepest forms of wealth with money, but they are not identical. While money is one pathway to this wealth, it isn’t the only one.
An old joke goes like this: “Money can’t buy happiness … but it can buy a jet ski, and you’ve never seen a sad person on a jet ski.” Tongue-in-cheek though it may be, the joke makes a serious point: No one values money strictly for itself. We value money because of what it provides: pleasures, possessions, security, status, freedom—all of which are means to happiness (or so we assume). That’s what we’re after, the “real” wealth.
But we forget this ultimate goal and slide into a mental rut, confusing the means (money) with the end (freedom, security, pleasure, happiness). We fixate on money, equating it with the good things we’re pursuing.
“Even though our basic needs have been met, our desire for money persists,” Joshua Becker wrote in “Things That Matter: Overcoming Distraction to Pursue a Meaningful Life.”
“Far too often, this desire begins to take root as a perceived need inside us. Before we know it, we forget that we’re talking about a want and begin confusing it with a need. And the financial stress of never having enough begins to emerge. But, in reality, what we need and what we want are rarely the same.”
Money as a Proxy for Happiness
The desire for money—and the assumption that money equals wealth—becomes a blind urge, an urge that can never be fully satisfied. For instance, Becker cited a study in which people with an average net worth of $78 million thought they needed 25 percent more wealth to be content. Because numbers are abstract, it’s very hard to pin down how much money equates to real wealth and is therefore “enough.” This vaguely defined monetary wealth threshold keeps receding like the horizon, always out of reach—and keeping us always on edge.
True wealth is something simpler and more freeing. As financial adviser Mike Brown wrote on his blog, “wealth is not about having a specific amount of money but having enough of it to support a lifestyle of [your] own choosing.”
Money can be exchanged for some measure of happiness, although it’s often fleeting. But money certainly is not the only tool for achieving happiness—in most cases, it’s not even the most effective one. If what we really want is the freedom, security, and comfort we associate with money, then we should aim directly for those, whether or not they involve the accumulation of money. In the process, we will discover that gobs of cash are not always necessary to achieve those goals.
As Becker wrote:
“I’ve lived as a minimalist for the last twelve years, and one of the most life-giving benefits I’ve realized along the way is that we need so much less than we think we need. Many of the minimalists I’ve met have proved that they can live a good life on far less than they originally thought.”
This is because two of the key aspects of the “good life”—the genuinely “wealthy” life—are not inherently tied to money: time and relationships.
In our imaginations, the freedom we tend to associate with having money takes the form of time—time to spend with loved ones or pursue our interests. Sometimes we can achieve greater time freedom without having to earn more money—in fact, sometimes a greater income leads to less time freedom.
Rich in Funds, Poor in Time
Let me use my own experience as an example. I once worked for a nonprofit organization where I made a pretty substantial salary. It did not take me long to realize that the long hours and the requirement to be perpetually “on-call” simply was not worth it. I was wealthier from a monetary standpoint than I had ever been, but I was extremely “time poor.”
“Time poverty” refers to lacking the time to accomplish what you need or want to accomplish in life. According to Cassie Holmes, a professor at the University of California–Los Angeles Anderson School of Management, time poverty has a negative effect on job satisfaction, health, and relationships. Having enough spare time seems to have a bigger impact on happiness and fulfillment than having lots of cash or possessions.
It only took me about a month to realize my new job, although it paid more than my prior freelancing work, was making me less wealthy on the metrics that really mattered. I quit and returned to freelancing and instantly felt wealthier. Even though I now make significantly less per year, I accomplish it in a fraction of the time that the high-paying job took, and, as a self-employed person, I set my own hours. I can work around the family schedule. I can take a Tuesday afternoon off and go to the park with my family, just because we want to. We can eat a leisurely lunch together. I can take a mini vacation and work from a coffee shop.
In my book, that’s wealth.
We can understand this concept better when we apply the notion of “relative income” and “absolute income,” outlined by Timothy Ferris in “The 4-Hour Work Week.”
Absolute income is measured using one holy and inalterable variable: the raw and almighty dollar. Jane Doe makes $100,000 per year and is thus twice as rich as John Doe, who makes $50,000 per year.
Relative income uses two variables: the dollar and time, usually hours. Let’s look at the real trade. Jane Doe Makes $100,000 per year and works 80 hours per week. Jane Doe thus makes $25 per hour. John Doe makes $50,000 per year but works 10 hours per week and hence makes $100 per hour. In relative income, John is four times as rich.
Relative income is such a powerful concept because true wealth pertains more to time than just dollars. By quitting my high-paying-yet-time-devouring job, I rediscovered the value of time and became richer in the process.
Becker’s words rang true in my experience: “If we spent less time trying to get more money, we would have more time and energy and margin for other things.”
Some may object that they do not have the opportunity to be self-employed, so they cannot work fewer hours even if they wanted to. That’s true, but work hours are not the only ones you can reclaim as time for yourself and your family. For example, most of us could instantly become time-wealthier, eliminating wasted time on the internet and social media.
Quitting my high-paying job allowed me to spend more time with my family. True wealth consists of meaningful relationships. It’s in relationships with others that we find the meaning, security, and fulfillment that we fruitlessly seek in accumulating more money. The longest study ever conducted on happiness, the Harvard Study of Adult Development, found that the strength of one’s relationships has the most significant impact on happiness and health, compared to any other single factor. Thus, a person in a lower-income bracket but with stronger relationships is objectively wealthier than the lonely real estate magnate making millions of dollars.
Not only are time and relationships distinct from money, but they actually give money its meaning in the first place. What good is all the money in the world if you do not have the time to enjoy it, nor people to share it with? Business consultant Myron Golden includes this social dimension in his definition of wealth:
“Wealth is my willingness and ability to provide value for someone other than myself.”
That statement is a Copernican revolution in the way most of the world thinks about wealth, transforming it from an egocentric concept to an other-centric one.
Becker would likely agree with Golden’s definition. One of the key themes of his book is that instead of aiming to be rich, we should aim to be generous.
“In the end, you’ll be prouder of the money you gave to others than the money you kept for yourself,” he wrote.
People and relationships are objectively more valuable than money. Investing in them brings more wealth than any stock market gamble.
We’ve been fooled into believing that a life characterized by security, freedom, and joy is only attainable for the rich. In reality, it’s accessible to all of us. Once we understand that wealth can be quantified in many ways other than bank balances—time, relationships, a lifestyle we enjoy, and the capacity to be generous—we can break free from the shackles of endless money accumulation.
