🧠 Can More Money Make You Worse Off?


In 2007, a California radio station held a contest: Hold your Wee for a Wii. Contestants competed to drink the most water without going to the bathroom.

A 28-year old, Jennifer Strange, finished six liters in three hours before bowing out. Later that night, she died from hyponatremia – or the swelling of cells due to low sodium in the bloodstream.

If you walked up to a stranger and asked, “Is water a good thing?”, you’d overwhelmingly hear, “Yes.”

Yet, as Strange’s story shows, dosage matters.

We know this inherently. Sunshine is great, sunburn is bad; a dish of ice cream delicious, a gallon gluttonous; a weekend with extended family precious, a month with the same people crazy-making.

One area we’re still convinced more is always better: money. Very few people behave in a way that says: “too much money is a bad thing.”

Our friend Morgan Housel believes that’s a mistake. On a recent episode of the Morningstar podcast, he said, “The idea of an optimal net worth is…[when] more money, not only does not make [you] happier, it might be like the inverted U: It starts to decrease [your] happiness.”

How could more money decrease your happiness? A few possibilities:

  1. The hedonic treadmill keeps you lusting for more without any satisfaction.
  2. Your kids grow up spoiled and detached from reality.
  3. Your relationships deteriorate as your elevated net worth creates distance from those in your orbit.

The bottom line: a long-term mindset is not about being rich; it is about being wealthy. The former denotes lots of money, the latter denotes autonomy of time.

Given that, what would your ideal net worth be?

It might be less than you might think.

– Brian Feroldi, Brian Stoffel, & Brian Withers

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February 11th 2022

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