7 + 1 Life Lessons from the Very (and Not So Very) Wealthy

Over the weekend Barry Ritholtz published an excellent column in the Washington Post listing 7 lessons he’s learned through his interactions with high net-worth clients.  The lessons reflected a number of the values we have at Below Your Means.  Under #3 – Memories are better than material objects, he writes:

The rule of diminishing returns is a harsh mistress with luxury goods. Do you really think $100,000 audio speakers sound 20 times better than a pair of $5,000 speakers? (They don’t). Is a $250,000 sports car five times faster than a $50,000? (It is not). These days, you can buy quite a lovely home for $1,000,000 (and much less in the country’s interior). Those $10,000,000 manses are not 10 times roomier. Anyone who has owned a $10,000 Rolex will tell you that a $39 Casio keeps better time.

We like this one a lot – and it’s a common problem.  As your income increases, there is no requirement to increase your spending!

Ritholz continues (emphasis ours):

When discussing the benefits of wealth, I have heard again and again about amazing experiences, family get-togethers, vacations, shows, sporting events, weddings and other events as these people’s most important life experiences. While these things cost money, nearly every family can afford reasonable versions of them.

This leads to our addition to the list:

8.  Don’t think you have to have money already to start living richly

As with anything that requires discipline (losing weight & getting in shape, for example), too many people make the mistake of thinking “this would be so much easier if I already had X”, where X is being at a certain weight, or fitness level, or having a certain income.  It is just as easy to blow through a $100K/year salary as it is to blow through a $50K/year salary.  Now, if you are reading this and trying to make ends meet on a $50K/year salary, this statement may make you angry.  But trust me (and the experience of many people who have seen their expenses grow as their income grows) – it is just a matter of making a decision to live within your means.  Of course, if you are dealing with large medical bills or a house that you can’t afford after a job loss, you have an immeidate problem that requires more complex solutions than we are offering here.  But for a large portion of the population, the issue is more choosing to start living within your means, finding ways to increase your means, and growing your net worth than it is one of mere survival.  We’re not saying money doesn’t help, but it isn’t a requirement.  The authors of this blog certainly started before they had the incomes that they enjoy now.

Another point Ritholz makes that we love (emphasis added):

I am struck by how many very wealthy people I know — especially tech entrepreneurs – have expressed being grateful for their good luck. Again and again, I have heard the phrase: “Being smart is good, but being lucky is better.” Rather than leave you with the impression that success is simply a roll of the dice, I am compelled to remind you what the Roman philosopher Seneca the Younger was reputed to have said: “Luck is where preparation meets opportunity.” I don’t know whether it’s better to be smart or lucky, but I would suggest that making the most of the opportunities takes more than just dumb luck.

Opportunities will come your way all the time.  Living within your means is one way to ensure that you have the freedom to take advantage of those opportunites.  The second – don’t be too proud.  The most successful people we know will do everything from negotiate a seven-figure deal to dig a ditch, if that is what it takes to sieze the opportunity in front of them.

Over to the Washington Post for more…

7 Life Lessons from the Very Wealthy | The Washington Post

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3 Responses to “7 + 1 Life Lessons from the Very (and Not So Very) Wealthy”


  1. krantcents

    The most meaningful and memorable times were with family at a simple dinner at home. I value time together more than expensive gifts, vacation or money.

  2. Amanda L Grossman

    Sounds like a great article–I like the three lessons you chose!

  3. Ginger

    I think there is a bottom level that all your income is going to expenses but above that the income level does not matter, you can save and spend at any income level.