With the recent news that a single bottle of wine sold for over £143,000 at auction, I’m reminded both of our obsession with money and an analogy I employed recently with respect to using money as a measurement in goal-setting and success.
Goal-setting is a vital part of any recovery agenda for High-FFs (as I call those with a high fear of failure in my forthcoming book What’s Stopping You?). So vital, in fact, I dedicate one-fifth of the book to the subject. Yet I’m cautious about the use of money as a benchmark for our progress, and positively hostile to the notion of money being a goal in itself. Don’t get me wrong, I’m not anti-money – far from it. What concerns me is the use of money in goal-setting – not least due to the concept of its diminishing returns.
Here comes the analogy: if we were to pay, say, £10 for a bottle of wine, we could perhaps assume that it was twice as nice as the £5 bottle next to it. But what about the £20 wine? Is that twice as nice as the £10 bottle? Yes, probably. Even a £40 bottle could be twice as nice as the £20 wine – at least to the more sophisticated palette. And, perhaps for the connoisseur, an £80 bottle has twice the excellence of the £40 bottle. But at some point – a long way before the £143,000 paid in Hong Kong for the Chateaux Lafite (in fact three bottles were bought at that price, making the total spend over £420,000) – a bottle will stop doubling in quality with the doubling price tag of the wine. Eventually, the purchaser will have to admit that the marginal improvement with every price doubling is so small that they are simply buying prestige, or maybe the hope that someone will pay even more later on.
And it’s the same with money and quality of life. The low-paid but housed have twice the quality of life as the homeless beggar, for sure. Also, the middle class (that’s you) almost certainly has twice the quality of life of those on a subsistence living (even a western one). But as certainly as the wine, at some point our quality of life becomes only marginally improved despite our doubling of the amount of money spent.
In fact, entrepreneur Richard Koch – writing in his book Living the 80/20 Way (2005) – suggests that there is a point at which money starts eroding, rather than adding to our happiness. He is convinced that people tend to over-estimate the return they will receive from earning more and that, while studies show poverty makes us unhappy, adding even more money once we are moderately well off does nothing for our happiness. Rather, it adds stresses that can get in the way, which means that goals based purely on money are, ultimately, unlikely to improve our quality of life.
Of course, money based goals – while appearing shallow to outsiders – can usually be explained in more psychological terms. Further exploration, revealed by the simple question: why do you want to be rich? can get us closer to the truth. If money is a means to improve the qualify of our lives – perhaps through the purchase of nice things – fine, although we are back to the law of diminishing returns. If, however, the answer is we want to prove our worth to our peers (to be seen driving the Ferrari rather than be satisfied with the driving pleasure available from mere ownership), then money is not the goal at all. Self-esteem is our true purpose.
Self-esteem is a worthy goal but the sort of self-esteem that money buys is ephemeral – relying, as it does, on constant external confirmation. Such confirmation may be from our family – usually our parents – but is just as often from our peers, which presents a problem. As we climb the social ladder our peers are likely to change. So while we can seem successful to many, the very process of acquiring that success involves assimilation with new peer groups that are harder in impress. Just like a computer game, money allows us access to this next level. Yet we are soon forced into new battles in order to stay at that level, and certainly to get beyond it. The social paranoia therefore remains – hardly a recipe for happiness, even if the setting has improved and we are now driving (or dating) the latest model.
Yet the quest for money has another, very legitimate, root. Just as often the answer to the question: why do you want to be rich? involves the reply “so I don’t have to worry”. Indeed, fear of the future – and the desire to control the uncontrollable – is a classic High-FF trait. The usual answer to our fear of future unknowns is to buy insurance, with invested wealth the ultimate insurance policy against the ultimate worry of aged penury once we have lost our capacity to earn.
Of course, as with wealth, the concept of poverty is relative and self-defined, and in an affluent society could even mean any compromise to the living standards we have become used to. Certainly, our perception of the necessities of life remains as prone to comparison and relativity as the shallowest of material desires. Alain de Botton in Status Anxiety cites a survey comparing what North Americans considered a necessity in the 30 years between 1970 and 2000. For instance, in 1970 just 20% stated a second car was a necessity, a figure that had grown to 59% by 2000. The figures for a dishwasher were 8% to 44% and home air-conditioning 22% to 70%. And, of course, as “necessities” ramp up and multiply, so do our worries about money.
“Life seems a process of replacing one anxiety with another and substituting one desire for another,” writes de Botton, “which is not to say that we should never strive to overcome any anxieties or fulfill any desires, but that we should perhaps build into our strivings an awareness of the way our goals promise us levels of rest and resolution that they cannot, by definition, deliver,”
With respect to money as a measurement for goal achievement, this couldn’t be more accurate.
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