This sounds remarkably like something I said yesterday. Said rather better, of course:
For most people it is likely that wealth has to improve in order for their happiness level to remain constant; if their wealth were to decline, so would their happiness.
Not so much the level of wealth, but the direction it\’s travelling in.
This has a ring of familiarity to it as well:
The other confusion concerns wealth. If a person has a million pounds in the bank and never touches a penny of it, or a huge mansion and never occupies it, it is the same as if he had neither the money nor the house. What this shows is that wealth is not so much what one has, but what one does with it.
A man who has a thousand pounds and spends it on a wonderful trip to the Galapagos Islands is a rich man indeed: the experiences, the things learnt, the differences wrought in him by both, are true wealth.
If you would like to know how rich a person is, you need to ask not how much money he has, but how much he has spent.
Adam Smith makes very much the same point in Wealth of Nations: and goes on to point out that it is true of countries as much as men. Having the pile of gold isn\’t what makes you rich, it\’s the having of the things that pile of gold bought which does.
Or, as I put it, it\’s the imports that make us rich, the exports being just the shite we do to pay for them.*
*(What, you didn\’t think that thought was original, did you?)
“If a person has a million pounds in the bank and never touches a penny of it, , it is the same as if he had [not] the money”
Does anyone – even you Tim – believe this to be true?
Tim adds: Sure. It does swing on hte “never” though: if touching a penny of it is a possibility then it’s not quite so true.
Let’s say I have a million in the bank . I can afford to be without risk-aversion in my business life – if it goes belly-up I will still have my million. If my business risks come off I will be much richer, without having to touch the million. Vice versa, if the million wasn’t been there, I would not take the risky but rewarding path. Are you saying I don’t benefit from having the million I don’t spend ?
Tim adds: See above. A lot depends upon the value of “never”.
I’m not sure it’s even true then, as it means you don’t need to save any of your current income in order to provide a cushion.
‘Never’ includes “I could do if I needed to, but as it happened I didn’t”.