Modern capitalism is a pro at two things:

  • Generating wealth; and
  • Generating envy.

The modern world is good at generating envy. Public display of a good life, acquisition of things and conspicuous opulence is meant to define the notion of success.

It is interesting that if you have R1 billion, you will be okay until with yourself until you found someone who has R1 billion and R1. Envy will drive you to want more than her.

The urge to surpass your neighbours, peers, and friends, can energise our hard work.

Social comparison can cause us to feel like we are never enough. 

We feel we are not enough when we do not live the life others seems to be living.

This makes us buy things we do not need because we believe that life is not fun without a sense of these things.

What we do not realise is that in our quest to keep up with the Jones, usually the Jones are actually broke, and all their public display of wealth is often financed through debt.

Morgan Housel in his book The Psychology of Money argues that happiness is just results minus expectations.

I like that: Happiness is just results minus expectations.

The goal of financial skill is getting the goalpost to stop moving.

If expectations rise with results there is no logic in striving for more because you will feel the same after putting in extra effort.

It gets dangerous when the taste of having more, more money, more power, more prestige, increases ambition faster than satisfaction.

In that case one step forward pushes the goalposts two steps ahead.

You feel as if you are falling behind, and the only way to catch up is to take greater and greater amounts of risk.

Happiness, as it is said, is just results minus expectations.

The goal should be to do work that truly matters, not try catch up with the neighbours.

Source: The Psychology of Money by Morgal Housel.

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