I recently found this article on Quora, and it really piqued my interest. I’ve always had the opinion that spending money on experiences is far more rewarding than accumulating material goods, and this (supposed) billionaire has reinforced this in his answer to an almost unrelated question.
The question is “What does it feel like to be a self-made millionaire under the age of 25?”
And here’s the answer that caught my attention: (Note: I bolded my favorite sections)
“I’ve been featured on the homepage of Yahoo! as a millionaire, offered 3 separate reality TV shows – including that terrible Millionaire Dating one on Bravo. I bought a luxury car with cash on my 16th birthday, owned a house a few years later.
Hitting $1m was a non-event, I don’t even know the exact date it happened. The dividends just all of a sudden added up, and it was there. I celebrated by buying myself a used Rolex. A few years later I also did a vacation where I “tried to spend as much money as possible” – but I still found myself gravitating towards “values” on the wine list rather than blowing it all out by spending thousands on a bottle, which I thought was silly.
Hitting 8-figures was a bit more substantial, I knew it meant I’d never, ever have to work again unless something went terribly wrong. The closing call with the law firm was one of the biggest anti-climaxes of my life. I had already “owned” the money in my head years before hand, so seeing it crystallize on my bank statement didn’t make a huge difference, except that it freed me up to start tackling bucket-list items.
I had been postponing so many experiences with the idea of “doing it at some point in the future when I made it” that I just started tackling them one by one. Superbowl. Sundance. SobeFest. Africa. A month around Europe. 3-Star Michelin dining.
The only “awkward” thing I keep running into repeatedly, is other people’s comments about wealth or money. Whether it’s a tour guide pointing out a hotel that costs $1000/night and everybody in the tour bus gasps (and it’s where I’m staying) or taxi drivers making snarky comments about millionaires, or people suggesting it’s my “lucky day and I should buy a lotto ticket” – I run into it repeatedly and predictably, but I always tend to keep my mouth shut and not say anything.
Along the way, the most interesting phenomenon has been “adaptation”. Moving from a $300K apartment to a $1m one barely made a difference after the first month.
Jumping from that to something 60% bigger, and oceanfront (on the beach) that was worth over $2m barely made a blip after the first few weeks.
Buying a fancy, fast sports car – yes, I did it, but again people tend to massively overestimate the “joy” or “happiness” that a particular item will give them vs. reality. After a few weeks, it just sits there. The anticipation, wait and planning is almost better than the realization of the event itself.
When they say “it’s all about the journey, rather than the destination” that’s absolutely true. The part that I’ve most enjoyed is hanging out, meeting and become friends with amazing, successful, smart and ambitious entrepreneurs. It’s inspiring, invigorating, and just plain fun.
I still don’t have a private plane or NetJets card, I fly economy-class around North America most of the time, I don’t even have a maid to do my cleaning. I prefer to buy clothes when they go on sale, and I cringe at people who waste thousands on Gucci-this or Prada-that. I upgrade my MacBook every few years, not every model. I still use an original iPad. I’ve never bought a new car (except for my parents). The biggest TV in my apartment is 42″.
Experiences, even when they cost thousands of dollars a day, so far have been my best investments. I’ve stopped postponing as much as I used to. The best time is “now”, but to be honest, I could have done many of these things much earlier, and on a lower-budget, and probably still had a great time.
Try this as a test–
Make a list of all physical things you would buy if you had $10 million. Let your mind roam free. Don’t limit yourself to the reasonable.
It’s not that long, is it?
And if you worked a decade, or more to earn that money, you’d cross 90% off the items off that list anyway. There’s amazingly few physical things that are worth spending money off once you’ve covered the basics. If I gave you $100K in cash and told you to spend it in a day, you’d be hard pressed unless you bought jewellery, or a car.
Gadgets? Clothes? A bigger TV? Unless money fell from the sky into your lap, you’re probably going to be quite pragmatic about what you invest in. There’s a reason why most lottery winners end up bankrupt within a few years.
The utility of money once you get past a certain threshold is very limited. And I honestly think that most people who want to be “rich” don’t really mean it. What they are really saying is that they’d like someone to hand them a check.
But when push comes to shove, and there’s hard work, sacrifices, and tears involved, they’d rather spend 4-hours a day watching TV along with the rest of America.”