The Magical Money Illusion
Bigg success is life on your own terms. There are five elements of bigg success – money, time, growth, work and play. Today we’ll focus on money.
Status – a high rank or standing within a group of people – is a good thing. It means prestige, importance and respect.
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But status also can work against us. Sometimes in our quest to show off our net worth, we lose our self-worth. We worry about our image instead of our essence.
We give off the illusion of money when often the money isn’t there. It’s the magical money illusion. Even though we make a lot of money, it all goes out the door trying to give off the illusion of wealth.
This is one of the lessons we’ve learned from recent history. Now we’re going back to timeless principles of saving money and using debt sparingly.
For some reason, there seems to be a natural human tendency to compare ourselves to others. We found a great article that describes two experiments that tested people’s desire for relative affluence.
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The first one was conducted in the early 1990s. Participants were presented with two job opportunities in the same industry.
With the first option, they would earn $35,000 a year while their colleagues earn $38,000. Under their second choice, they would earn $33,000 while colleagues earn $30,000.
Most people chose Option 1. However, here’s where it gets interesting:
Two-thirds said Option 2 would make them happier.
We think more money will make us happier. However, this research shows that, for a lot of people, making more than their peers is what really does the trick.
Half the money is just fine
Let’s look at a second study. Its participants were a very bright group – the faculty, staff and students at Harvard University.
They were also presented with two options. The researchers took special care to make it clear that the prices paid for goods and services would be the same in both cases. In other words, more money would mean more and/or better stuff.
Under Option 1, they were offered $50,000 per year while others were only making $25,000. With Option 2, they would earn $100,000 a year while everyone else earns $200,000.
56% of the participants chose Option 1! They gave up $50,000 in income in order to make more than their peers.
It’s the Jones Effect. They’re happier making more comparatively but less absolutely.
Isn’t it amazing that really bright people making choices that seem illogical?
How do you move past this natural inclination to compare yourself to others? How do you do what’s really best for you?
Change the focus of your comparison.
Instead of focusing on what you make or what you have compared to others, concentrate on what you need to live the life you desire.
When you live your life on your own terms, you’re liberated from all of that. You focus on what you make relative to you what you need to make. Others disappear from the calculation.
You focus on what you want relative to what you have. Who cares what anyone else has.
You focus on what you know, not on what other people think. You create the life you want and you make sure it’s sustainable. That’s financial freedom. That’s peace of mind. That’s bigg success!
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Thank you so much for checking in with us today. Please join us next time when we talk about horse jockeys and personal productivity. Until then, here’s to your bigg success!
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(Image in today's post by miamiamia)