The Quest of the Simple Life

An excerpt from The Art of Spending Money.

I wrote The Art of Spending Money (learn more here) because there’s endless advice on how to build wealth and almost none on what to do with it. What follows is an excerpt from the book’s introduction.

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Dr. Dan Goodman once performed LASIK eye surgery on a woman looking to ditch her glasses. The patient returned for a checkup a few weeks later, despondent. She said the surgery ruined her life.

There was nothing wrong with the procedure—she could see clearly without glasses for the first time in years.

Goodman pressed: Then what’s the problem?

The patient said she expected that after losing her glasses, her husband would find her more attractive and her coworkers would find her more intelligent. When she realized they didn’t, and love and respect weren’t driven by something superficial like her glasses, she was crushed.

“You have a problem I can’t help you with,” Goodman told her. “I’m sorry I didn’t realize it earlier.”

It’s astounding to witness someone gain what they thought they always wanted only to realize that happiness is more complicated than they first assumed.

And, my gosh, that is so true with money.

There’s an old saying that nothing’s worse than getting what you want but not what you need. That sums up so many people’s relationship with money and success. If you’re lucky enough to get what you want (money), you might still realize it’s not what you need (family, friends, health, being part of something bigger than yourself). And then you’re disappointed. What could be worse?

This book is about how spending money has little to do with spreadsheets and numbers and a lot to do with psychology, envy, social aspirations, identity, insecurity, and other topics that are too often ignored in finance.

Can money buy happiness? Yes.

Can spending money make you happier? Yes.

But it’s more complicated than many people think. In between the numbers, charts, and data sits the messiness and absurdity of the human mind. Money is a remarkable tool that can provide a better life if you know how to use it. But knowing how to use it is quite different from knowing how to acquire it.

Winston Churchill famously said that he got more out of alcohol than alcohol got out of him. By the same logic: I have seen rich people whose money got more out of them than they got from it, because they spent their life desperately chasing money without any sense of how to use it to make them happier. I have also seen low-income people get tremendous value out of what little money they had, using it as a source of leverage to acquire more of what made them happy.

What matters is not necessarily how much money you have. It’s whether you understand and can control the psychology and behaviors that can make the connection between money and happiness more complicated than we assume.

There are so many ways that observation can affect your own life.

Think about the broke young person who buys a car he can’t afford because he thinks it will bring respect and admiration from his peers.

Or someone who diligently saved their entire life but cannot bring themselves to spend a reasonable amount of money in retirement because “saver” has become ingrained as part of their identity.

Or the young couple saving for a down payment on a two-bedroom house whose expectations are suddenly inflated by a friend who just bought a three-bedroom house.

The rich entrepreneur who never feels like she has enough.

The low-wage worker who always feels like he has plenty.

None of these topics have to do with spreadsheets or numbers. They’re so much messier than that. It’s all psychology, sociology, and understanding how everyone’s different. Understanding how everyone’s just trying to make it through life the best they can, making sense of the world given the experiences they’ve had, who they want to be, and what they think others think of them.

In school, finance is taught as a science, with clean formulas and logical conclusions. But in the real world, money is an art.

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I worked as a valet at a five-star hotel in Los Angeles during college. One day we hosted an invite-only high-end furniture show for the city’s moneyed elite.

A man came out to the valet stand chatting with a friend about how he just spent $21,000 on an armchair. Several of my colleagues and I overheard him and were stunned. Spending that much on a chair—a chair—was inconceivable to us.

The guy saw our bewildered expressions and said: “Boys, I know. It’s crazy. But when you have money, this is what you’re supposed to do.”

I found it such an interesting choice of words. “Supposed to do.” Did he actually like the chair? Or was he blindly pursuing what society told him he’s supposed to like and how he should spend his money?

I remember then thinking, as a nineteen-year-old aspiring to be rich one day: Is that what I’m supposed to do one day? I’m supposed to study long hours in college and grind in a career for decades so I can tell my friends I bought an ugly chair that costs the equivalent of one half of an average household income?

Would that actually make me happier?

As I processed it all, I remember my reaction going from astonishment to amusement to almost feeling bad for the guy.

I got to know a lot of these people. It felt like so many of them had this mindless chase for wealth without actually knowing why they wanted it, other than the primal urge for more. They were very good at making money. But their ability to turn that money into a meaningfully better life felt rocky at best.

Of course, there’s another path. Many people have figured out how to use money as a tool to provide things that actually make them happier in life. But the rich chair guy had it right: What society tells us we’re supposed to do with money is not always what we should be doing to get the most out of it.

It’s not our fault. A combination of evolution and social forces tell us—often in a shout—what we should want: more money than other people, bigger stuff than other people, shinier toys than other people. Sometimes that is what we want, and what you should chase. More often we will realize that spending money to show people how much money you have is a fast way to go broke and an expensive way to gain respect. Disappointment is often the outcome.

Now, I think you can use money to build a better life.

I think buying nice stuff can bring you joy.

I love ambition, hard work, and—most of all—independence.

But after writing about money for two decades, I am constantly amazed at how bad most of us are at knowing what we want out of money, or how to use it as anything more than a benchmark of status and success. And let me be clear: Most of this book is reflections I’ve had trying to figure out money and happiness in my own life.

If you ask parents what they wish for their kids, many will say, “I just want them to be happy.”

Do you want them to be rich and successful? “Well, sure,” they’ll say, “but mostly I just want them to be happy.”

That’s great thinking. But many of those same parents, in their own lives, chase money and status at the expense of happiness. Perhaps the reason parents wish happiness over success for their children is because they’ve seen the downsides of blindly pursuing one over the other.

Carl Jung, one of the most influential psychologists to ever live, was once asked, “What do you consider to be more or less basic factors making for happiness in the human mind?” Jung listed them off:

1. Good physical and mental health.

2. Good personal and intimate relationships, such as those of marriage, the family, and friendships.

3. The faculty for perceiving beauty in art and nature.

4. Reasonable standards of living and satisfactory work.

5. A philosophic or religious point of view capable of coping successfully with the vicissitudes of life.

You can see how having money can affect some of those points. But money—especially lots of it—is not one of those points.

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This book will not teach you how to spend money. If I (or anyone) could do that, it would be called The Science of Spending Money.

But I’m more interested in the art of spending money. Art can’t be distilled into a one-size-fits-all formula. Art is complicated, often contradictory, and can be a window into your personality. The art of spending money covers things like individuality, greed, jealousy, status, and regret. That’s what this book is about.

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In his 1907 book The Quest of the Simple Life, William Dawson writes about how many of his London peers devoted their lives to money and success but still seemed miserable. Those who lived simple lives in the country were comparatively jubilant.

His main observation was that those who were trying to get more money were actually held captive by it. They were so obsessed with wealth that it held control over their sanity, their relationships, their quality of life. What they intended to be a strategy to live a better life often became an ideology they were beholden to, like an invisible dictator. They wanted to have more money so they could become happier. But money could buy them everything except the ability to not be obsessed with money, which led to constant anxiety, which led to unhappiness. It was a vicious cycle. And most of them were blind to it.

Sometimes the stuff you spend money on has so much influence over your behavior that it’s not clear whether you own things or the things own you. Benjamin Franklin put this so well when he wrote: “Many a man thinks he is buying pleasure, when he is really selling himself a slave to it.”

Dawson wrote that the ideal life was a simple life. A simple life might still be extravagant, with fancy homes and luxuries and toys galore. But it’s simple in the sense that money serves you, not the other way around. The kind of lifestyle you choose to live almost doesn’t matter—what matters is that you actually choose it, rather than being addicted to the mere appeal of it. Dawson wrote that his goal was not to make a living; it was to make a life, and only a fool would sacrifice his actual life for the endless pursuit of an imaginarily better one.

The quest of your own simple life—however you choose to live it—starts with a deep understanding and examination of yourself. We’ll begin there, in the next chapter, with a story about making sense of misfit children.

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Editor's note: We're signing off until the New Year, happy holidays!

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