Money Matters

There are two kinds of money.

For every person on Earth, there is a specific threshold – and it’s different for everyone – where the majority of your problems are not variations of “not enough resources.” Below that threshold, money is one thing. Above that threshold, it’s a very different thing indeed.

People sometimes like to say “Money won’t solve all your problems.” And it won’t! Nothing will ever solve all your problems. Problems are relative. But below that magic line, almost all of your problems are basically “I don’t have enough money.” The line is different for everyone – a chronically ill single parent might have a higher line than a childless, healthy young adult. But the point isn’t where the line is, it’s acknowledging that it exists.

Because a lot of people’s philosophical mistakes about money involve being ignorant of the line. If you are below the line, you should care a lot about money! You should work your butt off to change your circumstances, either getting more wealth or lowering your needs, until you’re above that line. Life below that line is hard. And living there makes it really hard to solve other problems – heck, it’s hard to even think about them.

But once you’re above that threshold, you need to dial back your pursuit of money considerably. Right above the line where your day-to-day existence isn’t a constant neck-and-neck race with the resources you can obtain, additional wealth has a significantly lower marginal utility. If you look at the extremes, this becomes obvious: Who benefits more from finding a 20-dollar bill on the sidewalk, a chronically ill single parent or Elon Musk? But what’s obvious at the extremes is still true even right against the line.

So what happens for many people is that they successfully work and strive until they’re over the line, but then they keep pursuing money with the same level of tenacity and sacrifice. They get more and more, and they spend more and more, but their actual level of happiness plateaus. And then it even starts to decrease as the other aspects of their life wither and falter.

This is a hard, hard lesson to learn. Especially because the threshold is different for each person, it’s not like someone can tell you exactly the level of accumulated wealth and annual income that you should hit before coasting. But if you don’t figure it out for yourself, you will be so much more miserable in your life than if you never take your foot off that accelerator.

Money matters, don’t let anyone tell you differently. But how you think about it matters even more.