You may have come across this fable. It illustrates an interesting perspective on the meaning of success.
A businessman visited a small coastal village and bumped into a fisherman who was just docking his small boat. Inside the boat were a few large fish. The businessman complimented the fisherman on his catch and asked how long he needed to toil for them. To his surprise, the fisherman replied that he only needed a little while.
“Why didn’t you stay out longer and catch more fish?” asked the businessman.
The fisherman explained that the fishes are just what he needed for his family plus a few extra to sell.
“But then what do you do with the rest of the day?” the businessman started to get curious.
“Well, I play with my children, take naps, go on long walks with my wife and spend the rest of the evening singing and chatting with my friends.” The fisherman replied.
Without missing a beat, the businessman jumped in. “I have a PhD in Business Management. I could help you become a much more successful person. From now on you should spend more time fishing and catch as many fish possible. With the proceeds, you could buy a bigger boat and catch even more fish. Soon you will be able to afford more boats, set up your own company and start a production plant for canned food. Instead of selling to the middleman, you should control your own distribution network. By then, you will be able to move out of this small coastal village and set up a HQ in a big city to manage your expanding enterprise.”
“Then what?” asked the fisherman.
The businessman laughed, “When the time is right, you would make your company public, sell your company shares and become very rich. You would make millions!”
“Millions, really? And then what?” asked the fisherman.
The businessman continued, “That’s the best part. By then you can finally retire. Move to a small coastal village where you can fish a little, play with your children, take naps, go on long walks with my wife and spend the rest of the evening singing and chatting with your friends!”
Money and our Happiness
When I first read the story, it tickled me. But this story also touches a fundamental aspect of our lives – the money that comes from being successful in our vocation. Looking from the money perspective, who doesn’t want to be successful?
Obviously the author of the story wanted us to think that chasing after success is futile, much like a dog chasing its tail. That working hard to be successful in business and hence making a lot of money is pointless since in the end we come back a full circle doing what we wanted to do anyway. While there may be some truth to this, deep down we all know that life today is just isn’t that simple.
Sure, we want to fish (work) when we want to, play with our children, spend quality time with our wife and still have plenty of time to hang out with our buddies. But we like to do all that with enough money in our bank. We want to have the assurance which money in the bank can give us. Financial security affords us contentment and sets the stage for a happier life.
Financial means can afford us to hire helpers and outsource tasks that we find unpleasant. This makes us more content and leave us with more time to do things that we enjoy. Spending on experiences like traveling to beautiful places and attending concerts will leave us with joy of good memories. Having enough money also means that we can afford the occasional splurge on gadgets and other material wants that can bring us excitement, no matter how fleeting it may be.
Then we also want to be able to give the best education to our children. We want them to be better than fishermen and not stuck in the small coastal village with limited opportunities in living a better life. A surface research on the Internet informed me that I would need to have at least half a million dollar to cover tuition fees, lodging and food for my boy to graduate from a reputable university overseas. I have twin-boys, so that means a million dollars.
Wait, some of us may be ambitious and want the sense of achievement that is derived from being a successful businessman. I could imagine the pride, honour and recognition that comes from winning the entrepreneur of the year award.
How about that retirement fund? The money to ensure that we can lead a comfortable life until death. We also need money to pursue our interests, travels, dining, hanging out with friends, etc. All these activities need money. How much money do we need to allocate a month for the remaining part of our lives to live a comfortable and enjoyable retired lifestyle?
So the tricky question is always, how much is enough? As much as we want to have, surely there is a limit to how much money that is necessary for us to achieve a happy life that we so aspire.
The interesting truth is that we may not need as much as we think. There is plenty of research that says most of the happiness you can obtain can be achieved at a basic standard of living. More money can contribute to more happiness, but only to a certain point.
Harvard psychology professor and author Dan Gilbert suggests that after basic needs are met, more money doesn’t always equal a proportionate amount of happiness. Doubling your income will likely increase your happiness level, but it would not double the happiness. There is a diminishing ‘happiness returns’ with increasing income which leads to little or no gain in real happiness in return. In fact after the threshold is reached, further increases in income may cause reduction of life satisfaction. Beyond the optimal point, people may start to be driven by desires such as pursuing more material gains and engaging in social comparisons, which could ironically lower the level of well being.
There are also opportunity costs to earning more. Working harder and longer hours means time away from the family. Higher position and more responsibilities would equal to greater work-stress levels which is harmful to health in the long term. You can start to imagine how happiness can be quickly compromised when associated with the money earned in such a way.
This is the quandary of success or financial aspirationalism – a never-ending paper chase that often leads to unhappiness or lower levels of life satisfaction. No amount of money will ever be enough as there is always an opportunity to compare yourself to someone richer. Because of this, our happiness within the context of ‘having more money’ will forever remain elusive.
So how much money do we need to be happy? This is a very personal question. Our needs and wants are very different. How much money you need to be happy varies as it depends on how much money is required to take care of basic needs and what brings you joy personally. It is a timeless question, and one that is very difficult to answer.
Ultimately, success and money can increase your happiness. But it also depends on how you steward and use the money. Spend it on experiences or things that align to your values, share some with families and those in need, and I believe you will be on the right path towards happiness.