value Archives - The Cracked Door

The Affluence Trap: Why More Money Doesn’t Always Mean More Freedom

You would think that those who make more money would have less financial troubles, but in many cases, you would be wrong. In surveys, people with higher income often report living from paycheck to paycheck.

This is because many wealthier people succumb to income inflation. This is a common human phenomena where those who make more money spend more on more expensive items and thus feel the need to make even more money. The millionaire struggling to afford the payments to keep his private airplane fueled, if you will.

Why does this happen? In short, because when many people make more money, they get a sense that they should live it up, buying more and more things. This can creep slowly and before you know it, one is spending hundreds of thousands of dollars a year on simple payments.

Whether you are wealthy or of modest means, these are three tricks to counteract this tendency:

The first is to think about what you really want in your life. Too often people assume that because they are wealthier, they should want and do the things that other wealthier people seem to want to and do: to buy a big house in whatever neighborhood is considered “nice,” buy expensive clothes, eat out at fancy restaurants, etc. But are these things you actually want?

It is reasonable to shell out more for better quality or for the things one truly desires in life, but most of the time, more expensive does not mean better quality. Many luxury brands are not better in quality; they are just more expensive, and to a point, many fancier restaurants similarly do not have a similar increase in quality. In situations where the more expensive product has a useful feature for you, it can be worth it to pay more for it, but most often, restaurants or stores that charge more do so because people think of more expensive products as better, not because they are actually better.

Similarly, buy only the specifications that you need. This can include durability: paying a little more for something that will last a long time costs less money in the long run than having to replace it down the line. If you only need a normal computer with normal processing, shelling out thousands of dollars for the latest high-end portable “supercomputer” does not make sense. Some people (like software engineers) may need those specifications, but if you are not one of those people, don’t worry about it. Marketers often convince us to buy products beyond what they actually need.

Second, don’t buy on credit. People should not do this unless they absolutely have to, and those who are making higher incomes do not have to. (The less well-off often get trapped into buying on credit, crippling them with debt, but that is a topic for another article.) Spend the money you have, nothing more and nothing less. I am even hesitant to get out a loan and pay for expensive purchases: purchase what you can afford right now. If you are buying something that takes years to pay back, consider whether that thing is worth being overworked in a crappy yet well-paid job with an obnoxious boss to complete your payments, because that is in effect what you are doing. For example, would you rather have a cheaper used car that still gets you around but retire early? I have a friend who bought a second home in the countryside, which he never visits. Was it really worth it to him to have to work several decades to own a place he doesn’t do much with? No. It was self-defeating: to pay for his new home, he had to work a job that never gave him the free time to enjoy the home in the first place. Many major expenses like cars and a new home may not be worth sacrificing the majority of one’s life to.

Buying experiences like traveling to new parts of the world or having adventures can be a fulfilling yet strategic use of one’s wealth. If you can afford a few thousand dollars, spending it on a trip to some new part of the world you have never been to is likely a far more spiritually enriching use of money than using it for the first month’s down payment on a bigger house in another part of town. If your circumstances change, you can always claw back on experiences, but a mortgage locks you in for decades.

Finally, think for yourself about what is important for you and what you value. Many wealthier people simply enact the narratives of what it means to be wealthy they see around them consciously or subconsciously. They think, “Oh being wealthier means, I get a big house and a fancy car, eat fine foods,” and so on. This traps them into a certain lifestyle where they must work a very selective number of positions that can pay for such a lifestyle. What do you truly find meaningful? It may not be wearing fancy jewelry, and it may not be living in the standard place every other wealthy person lives in.

Like many humans, many wealthy people live with a type of insecurity, as if they have to prove their value to others. This can lead to them showing off their wealth as a sign of their status. “Look at me; I made it.” For those like this, their problem is internal: they need to work on themselves and figure out why they don’t value who they are. If they did value who they are, they would realize how useless and fleeting the approval of others (especially strangers they don’t know) actually is.

For others, they buy the things other wealthy people seem to buy rather than think through what they value and actually want in life. Unsurprisingly, these social expectations are ever expanding: companies will always present us with another thing we need to get until we stop listening to them. Pausing and thinking for yourself about what you actually want knocks us off of that treadmill.

I hope this helps in thinking about how to deal with income inflation. Don’t follow others with means into this trap. Swim against the current of our society telling us to spend spend spend and figure out how to enjoy your life on your own terms.

A Warning from Death (A Short Story)

Hello,

I wanted to write a letter to clear things up. I am quite possibly the most misunderstood person you will meet. Most people fear me, but I’m not scary. I am the one who helps you pursue what is most important in life. I am the End, yes, but the end is what makes the journey a journey. Without it, you would no real reason to focus on what is most important, nor acceptance of what you have. By establishing finiteness, I establish value.

I know very well what it is like to be feared. This is the standard way humans misunderstand me. I have dealt with it for millennia. What I didn’t anticipate was your corporations. They drain bits and pieces of my essence for their profit, all in the effort to give others cheap profit. Momentary happiness or release to hook people into an addiction in which I slowly drain them into me. The endless machine of more and more is ever consuming. It will only expand to engulf your world and everything in it.

What is truly shocking to me is how these humans who drain the life of others for their own profit don’t really gain much of anything in the process. These vampires are too wasting their life. They just spend their life trying to make more instead of enjoying what they have. Addicted to money and the gain for more more more each quarter, they remake their consumers into their own vampiric image. They also leave their employees husks of their former selves, only able to consume with the little energy and money they have. Take me as a purist, but this bends the very foundation of what I am.

So take this my warning. Embrace death so that you can embrace life, but if you embrace this, you are embracing nothing but a shadowy existence that is neither.

Yours truly,
Death

What Are Emotions, and What Do They Tell Us About Ourselves?

Many are critical of emotions, seeing feelings as something that stifles them, as something they must overcome with reason and rationality, but that is foolish in the long run. We should be aware of our emotions because they teach us crucial lessons about ourselves and our needs.

Emotions are one of our internal mechanisms to orient us towards what we need. Thus, they are crucial. Even though sometimes emotions can be overwhelming or lead people to make decisions in the moment that turn out to be poor ones, we should not ignore or suppress our emotions.

Instead, we should seek to understand what they are telling us about what we need. Anxiety is a sign that we consider whatever we are anticipating as important. Worry and fear area signs that we are concerned about our wellbeing. Anger is a sign that we feel an injustice has threatened ourselves or others we care about.

At the end of the day, they are signals. Signals that can turn out to be correct or incorrect. Sometimes we are angry at something that we discover is not a real injustice, and sometimes, what we fear turns out not to be much of a concern. But often they are not wrong: our minds can be very good at assessing what is important.

Either way, it’s important to process the emotion, understand why you feel it, and then determine the best response to having the emotion. Through this, we can synchronize our emotions with our rational thinking. Using our reason to think about whether our emotion’s assessments are missing important information, and in turn, determining whether our rational self is ignoring something our emotions are picking up on.

A successful marriage between the two is a healthier way to respond to our emotions than suppression and a better way to use the tools in our psychological toolset to engage the world and live a good life.

What Is the Point of Money?

Many spend their lives acquiring money, but what really is money?

For many scholars, money is the ability to do something – whether that is to eat a sandwich, own a nice necklace, have someone provide a service for you – turned into a quantified unit. By this definition, money has incredible value. It literally is the ability to do or have things, but there are still some limitations to that value.

First, the capacity to do what? At the end of the day, money is a tool, a way to meet other goals. Capacity makes a very poor goal or purpose in itself. People who pursue money for money’s sake are attaining the ability to do things without a sense of what they want to do in life in the first place.

Second, as quantified capacity, money becomes less valuable the more you attain it. Everyone has the capacity to do things with their time and energy. Your salary has a certain amount of capacity as well. When you work, you trade the ability to do whatever it is you could do with your time and energy during that time for the capacity latent in your salary.

Often, this trade may give us even greater capacity, allowing us to do things we otherwise could not do with the time we have. You can use that capacity to meet your needs and pay for the things that you want, and thus help you live a better life. Such a trade may be worth it for you.

But after you have so much stored, gaining more may no longer add much value to your life and in some cases, may decrease it. Billionaires, for example, have enough to meet an entire life’s worth of needs and wants (and often the needs and wants of dozens or hundreds of more lives after that).

In such a situation, they do not have enough time left in their life to enjoy the capacity that they would gain from making more money through work. Each day they work, they lose one more day they have spent doing anything else (spending time with family, relaxing on a beach, or whatever makes one happy). Some ultra wealthy still work because they feel their job gives them a sense of meaning in their lives, but from a certain perspective, they are sacrificing their capacity to keep working.

Billionaires are an extreme example, but this applies to a certain degree to everyone. There is a time to build a base of capacity for ourselves by earning money, but the more one builds up, the less useful any new money we gain becomes. Eventually, that can switch and trying to attain more money after that is actually counterproductive.

You should evaluate for yourself how much of this thing called money you truly need and when the money you would gain is no longer worth what you would have to do to get it.