Who doesn’t want to earn at least a little bit more than they are right now?
Back when I made $35,000 a year, I’d look to the goal of $40,000 as if it were the be-all-end-all salary. If only I could get to that threshold, life would be sweet!
However, with each passing year, I wanted to earn a little bit more. And it usually came in the form of a modest pay raise (all but 1 year, from what I recall). But once I got to the promise land, every time my previous goal was replaced with a new goal. And that has happened about a dozen times since.
An analogy of an early explorer comes to mind. He sees the tallest mountain-of-all-mountains and sets out to climb to its peak. After painstaking efforts, he finally arrives, but when he gets there, his glory is short-lived. In the distance, he sees a neighboring mountain with a 20% higher peak for the first time. Aha! An even greater triumph to be had! So he sets out to climb it and after more painstaking efforts (and a few casualties), he does. But again, another taller peak in the distance. With each ascension, his goal of reaching the highest peak proves only to be a moving target. Days, weeks, months, and years of his life are pulled away from him in this pursuit. Friends and family are forgotten, health becomes fleeting, and total victory never achieved.
Pushing for more and accumulating savings faster is one of the keystones of personal finance success.
Particularly in your early years, accelerating wealth accumulation is vitally important to helping you reach your financial goals.
And the more you can crank the dial up to 11 and beyond, the better off you’ll be in later years and the faster you will achieve your goals.
But it is a path that is not without risk. There is a dark side, and it’s a big one. The quest for more can become a never-ending cycle. And for many, it becomes the driving motivator behind everything they do. Whether the wealth-seeker recognizes it or not, there is a shut-off button. It’s just that they are never able to hit it. And if not careful, health, friends, family, quality of life, and time are all sacrificed in its pursuit.
We all need to understand why we compete in the wealth accumulation game.
In the beginning it could be to pay off our debts (student loans, mortgages, auto, credit card, etc.).
From there, it’s to save for retirement.
Then maybe to pay off our children’s higher education.
And finally to achieve financial independence.
But then what? Here’s where it gets tricky. Financial independence can be achieved based on current expenditures, but those expenditures can always shift. The wealth-seeker will look for even higher levels of savings to meet higher projected expenditures, additional safety margin (for health care cost increases, natural disasters, extended life), and even bucket-list fantasies. The notion that more stuff and more security won’t make them any happier is fleeting.
For some, those tangible goals are simply replaced by one single goal: more accumulation. Enough is never truly enough. We’ve all seen or heard the stories of unimaginable wealth and said to ourselves, “Why the F do they keep doing it?! If I had that much, I sure as hell wouldn’t be living out of a suitcase or prepping for board meetings!”
How else can you explain the stressed out CEO, who after 20 years of 100+ hour weeks dies from a heart attack at age 55 after hitting his first $100 million.
Or the billionaire oil tycoon who throws environmental safety to the wind in the hopes of eeking out a 10% increase in equity.
Or the football player who ignores his 10th concussion or 3rd knee surgery and signs another 5-year contract, after accumulating tens of millions.
For some, maybe they do truly love it so much that they cannot imagine doing anything else with their time.
But for most, it’s about the pursuit of more money. That continuously moving target.
So here’s my suggestion: recognize the trap, then set a limit on your pursuit of accumulation and stick to it. Maybe it is your crossover point. Maybe it is 50% more. But once you achieve it, be grateful and hold yourself accountable to stop there. If you accumulate more, let it be as a byproduct of other pursuits, versus letting the accumulation drive your pursuit. You are one of the lucky few who have made it. Congratulations. Time to celebrate and explore the rest that life has to offer.
Nobody lies on their deathbed wishing that they had reached 10X of their wealth goal or need versus just 4X.