How Much Money is Enough?

Leaving Money on the Table, Career Creep, and Status Traps

Big windows: a conspicuous trapping of wealth

Gentle Reader, I hope this week’s edition, which discusses money, work, and status, finds you well. It is based on my own experiences of toggling between different kinds of jobs, and my own evolving relationship to the almighty dollar euro, which I have written about under the following headings:

• The nature of high status and high stress work

• Factors which keep people working

• How much money is enough?

• Conclusion and takeaways

---

‘Important’ Jobs

I used to wonder about the nature of high-stress and high-status work. For example, the wealthy stockbrokers who are glorified in films like ‘Wall Street’, or the high level managers at big companies who are responsible for hiring and firing – do they like their jobs, and is it worth the money?

I was curious about these people and about what their work entailed. What was it that made it worthwhile to fly across the world to meet people for a round of golf and a business lunch?

It was not obvioius to me that these behaviours are somewhat self-propagating, and that being busy and stressed can be proxies for being high-status. Nonetheless, if the work is difficult, why do these people, who are very well-remunerated, not simply quit and live off the fruits of their labour entirely, or take another, less stressful job?

I can see now that the above over-simplification shows that I did not fully understand the motives and environment of these people, the waters they swim in.

I also probably also felt some disdain for these types of work due to a misplaced belief that I could claim moral high ground, combined with being jealous of their big paychecks and big houses in salubrious postcodes.

Lately, however, I have done some work with corporations and so the veil has lifted a little, and I can see more clearly the mechanisms at play and the forces which drive high-earners to behave the way they do.

Factors which keep people working

Lifestyle creep

People in well-paid jobs tend to have a lot of ‘lifestyle creep,’ and not in the take-out coffee kind of way. They mingle in social circles which come with certain expectations and their expenses, particularly ‘fixed costs’ are bloated in ways which aren’t easy to solve. It’s difficult, for example, to haul your kid out of the high-fee private school to send him to the public school at the other side of town, without raising an eyebrow here and there. Similarly, how can you signal your success to others if you live in a modest house in a modest neighbourhood?

With money comes expectations and, even amongst the uber-rich, keeping up with the Jones’ is still necessary. While paying off the big mortgage requires an ongoing big paycheck, it also requires that you keep your nose to the grindstone and disqualifies you from leaving money on the table, especially if you want to be that country cottage, beach villa or city penthouse, and so on.

In other words, the grind doesn’t stop, and even if you manage to save up a very large stash of cash, you still generally need an income for various kinds of loans, to get credit cards, etc. This leads to a situation where one finds one’s self trapped in a very comfortable and well-upholstered prison cell. The walls are padded and the food is good, but there isn’t much room for manoeuvre, without a drastic change of outlook.

Money left on the table – who would do such a thing?!

Comparison, optics & social norms

Comparison is truly the thief of joy. If even Jeff Bezos and Elon Musk are comparing yachts, it seems that man is only happy only in comparison to his peers, which a claim which also seems to be ‘backed by research.’

In other words, you will feel more content having the biggest house in a very modest development, than having the most modest house in a luxury development, even if it is 10x the size of the former.

This is why, to some extent, it’s never enough. Every time we get wealthier, if we are fortunate enough, we enter a new peer group with new expectations. Society, being work-centric, is stratified generally according to income and class, which has the unfortunate side-effect of never allowing anyone to rest on their laurels.

Even those who are happy to ride off into the sunset must face the issue of optics. How do you communicate this to others? It is not particularly comfortable or socially frictionless to go around telling people you are retired or unemployed, two terms which are saddled with diverse arrays of emotional and sociocultural baggage. If you don’t have a problem with this personally, you might find your spouse or your spouse’s family find it odd, and awkward questions might ensue at Sunday lunch.

Others may pity you, assuming you are some kind of imbecile or suffering from an undisclosed medical condition. The rest will be confused, envious, or angry, depending on their receptive underlying psychological substrate, through which the information will quickly filter and take root. There is also the long-lost cousins who will see you as a target for gentle extortion, and the other long-lost cousin who will assume you are a useless ‘deadbeat’, that most American of insults.

Work is fundamental

Those who choose to retire early really are few and far between. The wealthy who have ‘exited’ often take a breather, before rejoining the fray, albeit with less of the rabid fervour which once animated them. It seems that the little proteins which make up our DNA seem to always push us back into working on something, which usually ends up being profitable, ie, a job. The human needs a project.

I see this as the hunter-gatherer compulsion, a quirk of our genetics which means we can’t, at the lizard brain level, comprehend a quantity of resources which precludes us from having to work again. When the hunter-gathered stalked deer, he knew that the fruits of his accurate spear-throwing must be consumed within a few days, before the meat spoiled. He could not conceive, not just of frozen food, but of a mass-market fungible and more or less evergreen token, known as currency, which at scale, could solve all, or nearly all, problems of resources.

Status

We work not just for money, but also for status, power, prestige, all of which are related, but subtly dissimilar. I recently spoke to a retired doctor who told me that as soon as he retired, he didn’t feel important anymore. Just a few months beforehand, he was practicing medicine and taking care of patients, something he missed and expected to miss, but what he did not expect was the loss of ‘soft power’. He did not state this directly, but I know that he no longer had influence in subtle ways, such as being able to recommend or refer to other doctors, being able to get expedite patients on waiting lists if appropriate, being seen as an influential person in certain circles, and so on. Very likely, down at the golf course or country club, he was no longer sought out for a favour or a medical opinion.

One of the harsh realities of life which I learned from Louie Bacaj is that people only care about two things.

1. What you have done for them in the past.

2. What you can do for them in the future.

My friend the retired doctor was missing out on #2.

Intoxication, power and career creep

I heard a story recently about a guy who has a very stressful job with an airline. He is worth tens of millions, but he spends half his life flying around the globe to important meetings, and never sees his wife and kids. I am sure all his inboxes are full of messages from people looking for jobs, business deals, favours, and he manages relationships and ventures which are worth hundreds of millions, or billions. How can a guy like that give it all up? He is intoxicated by his own power.

The intoxicating fruits of thy labour

If he quits his stressful job and takes an easy, three day a week gig at another firm, making half as much money, I somehow doubt he will sit quietly in the zoom meeting when his twenty-seven year old manager gives orders and advice. Just like a lot of things in life, if you are used to power and ordering people around and making big decisions, it doesn’t come easily to then suddenly take a back seat and go along with the orders from your new boss, whom you would have regarded as small-fry before.

The human is wired this way. We have receptors for status and power. Taking a step back from a powerful position, voluntarily, has a certain incongruity about it and, sadly people in society will assume there is something wrong with you or that you got fired, or you are a troublemaker. I call this phenomenon ‘career creep,’ after lifestyle creep, which describes a habituation to a certain level of comfort. In the case of career creep, the stimulus and addiction is related to status and power, which makes it difficult to climb back down the ladder. Similarly, many high-level politicians, after doing the top job, don’t simply go back to the back benches – they generally call it a day or move to another field.

Even in hospital medicine, there was an odd sort of career creep. When I nearly finished my ‘intern year’ (the lowest rung), I developed a mild and healthy amount of scepticism of the authority of the doctor who was one step ahead, the senior house officer. Then, as a senior house officer, when almost finished that stage of training, I developed a natural scepticism for the decisions made by the registrar, the next-ranked doctor. This is healthy and normal, and part of becoming experienced, but what would not have been tolerable would have been to return to a position lower on the ladder, and to have to abide by the laws of those who are higher up but less competent. This unfortunate situation, of feeling more qualified than a superior, is a frequent source of discord.

Even the hardest worker will some day burn out, and so provision should always be made for some kind of exit pathway, even if you love your work. Besides, you might get sick, or have a change of circumstances which means your company might not want you any more, or you might not want them.

How much money is enough?

For most people, work is not a status or a prestige game for most. The average person, who is not glamorous to write about, puts in an honest day’s work for an honest day’s pay, and not to send their kids to private schools or to go on fancy holidays. They therefore don’t usually consider how much is ‘enough’, a topic which was explored on the first episode of Moneywise, a new podcast by Sam Parr of My First Million Fame.

The first guest, Ankur Nagpal, has a net worth of ‘north of nine figures’, which I believe means he has more than a $100 million in the bank. He sees $10 million as a number where he could say ‘I’m good’, keeping in mind that this applies to life in New York, which is of course a very expensive place to live. The next guest, who owns a successful law firm, and brings in $10-15 million a year, reports that an income of $500,000 a year is enough, or allowed him to buy everything he wanted.

Sam himself, the host, is a little more bullish on stacking cash, reporting that $25 million is needed, as a minimum or ‘threshold number’ which allows people to live happily without chasing more money. He arrived at this number using the ‘safe withdrawal method’ (nothing to do with family planning), beloved by FIRE enthusiasts. In this case, he thinks very wealthy people spend $80k a month to cover their bases, which more or less amounts to $1 million a year, multiplied by 25 as per the standard maths, thereby amounting to $25 Million.

Although I am not here to criticise the uber-rich – I appreciate their transparency in sharing figures and it is of course true that money only solves your money problems, it is still hard not to see these figures as being quite ridiculous, at least from my perspective in the cheap seats.

In the interest of balance, I am sure there are very happy people across the globe who merely subsist, and the heartiest smiles and laughter I ever personally saw, came from the happy faces of the everyday people I came across when I was in Tanzania. Being grateful for what we have, rather than always looking for more, really seems like a key skill to cultivate.

Conclusion

Having gotten to understand this little corner of the world a little bit more in the last few years, I can see how people get ‘addicted’ to some degree to glamorous yet stressful jobs. In their eyes, they don’t have a choice: they are hooked on the dopamine of a big paycheck and hooked on the power, and society can be unkind if they take a step back.

Personality surely plays a role, too, and I’m sure many would never want a high-octane job, whereas others are actively seeking one out. Financially, there are some who just place a high value on luxury, and others who, even if wealthy, just want their McDonald’s for breakfast everyday, like Warren Buffett, or who want a simple solitary life in a cabin in the woods, like Thoreau (even if his mother did come to do his laundry).

What do you think? I have written a few ‘takeaways’ below, in an attempt to extract something concrete and of value from my musings.

Takeaways

1. Be grateful for what you have

2. Don’t tie your identity to your job

3. Be a big fish in a small pond, rather than a small fish in a big pond.

4. Humans may be wired to work and to cultivate income or resource streams

5. Work also serves as a vehicle to meet people, to keep our brains active, to contribute to society

6. It’s good to earn money and have a fulfilling career, but don’t lose sight of the portion of your life which finances cannot solve – relationships, family, emotional, mental and physical health.

   ---

Thanks for reading, and apologies for publishing two articles in two days, but I am trying to stick to the schedule of producing one article a week, at least in aggregate. Let me know what you think of the above, and subscribe below if you want to read more.

Affiliates: I recommend the Supernote e-ink device, which I use for reading, writing, and annotating documents. This affiliate link is only valid for EU customers.

You can also support me by joining the Pathless Path Community, a cozy online space where creators support each other to work in the most meaningful and aligned way possible.