In my twenties I was obsessed with:
- How much I earned,
- How much I saved, and
- How much I invested
That’s because once I understood how compound interest and the stock market worked I knew every dollar I earned was a valuable resource to secure my freedom.
As the saying goes, ‘a dollar saved is a dollar earned’.
There should be a saying that goes, ‘a dollar invested is worth one-hundred dollars earned’.
Such is the power of compound interest.
Since beginning my investing journey almost nine years ago, I’ve discovered something interesting…
The wealthier we become the less driven I am by making money.
Why is this?
Well one of the reasons is because every dollar you earn decreases in value as your wealth grows.
For example,
When you only have $100 to your name – receiving $1,000 feels incredible. It’s 10X more than what you have!
But when you have $100,000 to your name – receiving $1,000 feels like nothing. It’s a mere drop in the ocean.
Scott Galloway in his book ‘The Algebra of Wealth’ says:
“Money has the unfortunate characteristic of becoming less valuable the more you have.”
Economists call this ‘diminishing marginal utility’.
If you don’t have $100,000 to your name (outside your home and retirement account), then I recommend being as obsessed about money as I was in my twenties.
Having this level of financial security does amazing things for your confidence and self-esteem. And it gives you the choice to live differently.
But you will eventually get to the point where making money for the sake of making money won’t motivate you anymore.
“As your wealth increases, each additional dollar has less and less value. Therefore, if your only purpose for having money is the money itself, you’ll diminish the desire to earn more as you accumulate it. The value of each dollar decreases to the point where making money no longer has the power to motivate you.”
Interesting.
This has been my experience.
Making money used to be a primary driving factor for me and that’s why I could withstand working in a career I didn’t enjoy. Because the money served a purpose. To free me (which it did).
I used to view making money as an instrument to build wealth and secure freedom, but now I see it as a score card to determine:
- My ability to convert my talents into a service that adds value to others
- The degree of mastery I’ve reached in #1
Dr. Martini goes on to say,
“If your purpose for making money doesn’t grow at a faster rate than it depreciates in value to you, you’ll eventually plateau, and either stop attracting wealth or squander it on low priorities.”
Interesting.
What you need is a cause. Something that gets you out of bed in the morning. A purpose that’s bigger than you.
If you’re in a job you dislike then freeing yourself from your job is a great initial cause.
But once you taste freedom, your cause must grow beyond yourself.
Or your money making abilities and wealth will stagnate.
Food for thought?
