While the title is all encompassing we’ll go ahead and say that health is the only category where we can’t think of any upside. Becoming disabled or significantly impaired. One item could be “appreciating life more” if you know that you only have a few years to live. Besides that we can’t really think of any benefits from becoming ill/sick. This is also due to our belief that Health is always #1 followed by your personal relationships and money. Essentially we have a bias towards health that makes it impossible for us to recognize why being impaired would ever have a silver lining. That said. We used to believe that getting richer was always a good thing… that isn’t true as well. So we’ll highlight some interesting things to think about.
Bad Side of Getting Rich: If getting rich means you have $100,000 in your account, then there isn’t much downside. We’ve been there before and not much changes (you simply lose the fear of becoming homeless any time soon). When we refer to rich, we’re going to draw a minimum value at around $1,000,000. At this point, things start to change. This is because you will have to be a lot more careful. Even if you’re flying under the radar for the most part, anyone who spends more than a few hours with you at a time (per month) will eventually figure you out. They won’t know how much you’re worth *exactly* but they’ll know that you’re doing well. It could be free time, it could be the amount you fly, it could be your demeanor when money conversations come up (every average dude spends a ton of time talking about money and you won’t relate). Or the most likely culprit… people will realize that you never complain about money.
You’d think there is no downside, but there is a big one: general distrust. This can also be called cynicism, the richer you get the more likely you’ll develop more cynicism as you’ll notice people “angling” for something. It could be as small as “oh sure you can pay for this you’re rich!” (while at lunch) or as large as “Hey I know this isn’t a lot of money for you so let me do the project” (classic). Essentially, unless the person is not directly competing with you (in your field) and the person is also rich (millionaire at minimum), it isn’t easy to trust them. The life you live compared to a person still trying to “make it” is unfathomable.
For fun this is also a good way to tell if someone is actually rich. They don’t complain about having “a lot of friends”. People who have no money are the ones who are most likely to suffer from “a low friend count”. If you’re rich and socially intelligent you’ll limit the number of real contacts to handful. This isn’t due to anti-social behavior. It is due to experience. Essentially, people who don’t have much going on for them will always ask about “how to network better” a polite way of saying they want to scam their way into a good network of rich people without doing any work. These same people will also ask how to become “the life of the party” because people are less likely to hang out with unsuccessful people. Funny how it works. When you make it, you spend more time avoiding people than you do trying to get into a new network. You already have your network since you had value (ta da!).
Bad Side of Spending: One of the other interesting things to be aware of is the downside of spending. Travel is probably the biggest giveaway. Once you’re well off and you’ve traveled to say 30-40 major cities, you don’t feel a “jolt” when you go to a new one. For people on the younger side of the age spectrum, packing your bags and landing in a new city (Moscow, Buenos Aires, Miami, etc.) is exciting. You feel a rush of adrenaline and excitement. We’re here to tell you that this goes away! Eventually, when you have gone to numerous cities, the plane flight and the new city are not exciting anymore. You simply land and you feel like you’ve already been there before. Essentially you’ve become desensitized to new cities unless something extreme is happening.
This same desensitization will overflow into material items as well. If you grew up with no money, buying a new item (car, suit, shoes etc.) gave you a rush. Fast forward a few years after living a more comfortable life and this feeling declines. In fact, buying clothes will become mundane/boring (usually the most common one to go first). You will simply look at your shoes or shirts and say “oh yeah i need to replace this it’s old” and go buy a new one. There will be no emotion and you might even get questioned by the sales people “are you sure you want to buy this so quickly you’ve only been in the store for 5 minutes”. Hilariously, some people will ask you for your ID since your rapid purchase will look like someone who is operating with a stolen credit card. They will be even more confused when you tell them to cut off all the tags and throw away the receipt (no returns).
The final downside of spending? Comfort. The more money you make the more money you’ll spend on comfort. Not sure why this is but it’s a common trend. If you are then forced to stay in a terrible hotel or sit in the middle seat of a plane all the way in the back, you’re going to feel terrible. This is again a “1%er problem” but is a legitimate problem. The more you get used to something the harder it is to go back. This simple sentence is important and explains why we don’t believe in spending more than you make. If you’re saving over 50% of your income, you’re able to live the same life for at least a year without any sort of cash flow.
Good Side of Being Broke: Flipping this around but sticking with money, there is one very big upside to being broke… you don’t know what you didn’t have! Sure you always knew that other people had access to more resources than you did, but you definitely did not know what they were consuming. This means your decisions going forward are *hopefully* more practical. If you’re used to viewing a $100 purchase as a big deal, you’re going to save and invest like crazy until you actually view that purchase as tiny. Odd how that works.
Keeping it simple with examples, take your living situation. If you grew up in a richer home we’ve noticed that these individuals hate living in smaller places out of college. This creates a need to “upgrade” their living situation over and over again (increasing fixed costs). On the contrary, a person who grew up with no money and had to live in a shared bedroom for his life, is going to feel perfectly fine in a one bedroom apartment. In fact, that one bedroom apartment feels a bit big and annoying making him more likely to stay and simply hire a maid for once a month cleaning. When we think of this example it helps explain why the top 1% changes so rapidly every 10-20 years. It’s because the offspring of rich people do not know what a difficult life looks like. This requires them to spend more to try and mirror their prior lifestyle even if they don’t have the money.
The last upside of starting from zero is that each small gain actually gives you a rush. If a person grew up upper middle class, being able to go out to dinner once a week is not special. If you grew up with nothing, being able to go out and spend $50 on dinner every week is an absolute luxury. This “life style high” lasts a long time. Why? Well if $50 can give you a big “life style high” then you only need to earn ~$50/week for a few years in a row to keep this high ($2,600 in annual income spending). Compare this to someone who “expects” to do this. They likely need to spend an extra $500 a week to get the same high ($26,000 in annual income spending).
Good Side of Being Low Status at the Beginning: While this is a different bullet it it still related to being broke. Anyone who started with almost no money, knows that they are treated differently from people with money. This is the same for attractive and unattractive people. Believing that a good looking or rich man will be treated the same as an ugly or broke man but the general public is unbelievably crazy. If you don’t “look” the part or people can get the sense that you “don’t belong” they’ll definitely try to ostracize you and push you away. This teaches you a valuable lesson on human nature and also makes you significantly better at reading people.
The work place is probably the best example. Once a person from a lower status background gets moved up once or twice, he’ll immediately recognize the difference in treatment from people below him. In fact, he can figure out which of those people came from lower or upper classes based on how he’s treated. As a general rule? If the person grew up rich he’ll always believe that he deserves your spot and that he’s underpaid. You see this a lot on Wall Street which is why we used it as an example. If anyone reading this is still on Wall Street, please let us know when the industry wakes up and realizes the best hire is never the guy who grew up rich. The best hire in the guy who grew up with nothing because he had to do a lot more work and stand out to make it in the first place. The only exception is the ultra rich candidate who can somehow immediately bring revenue into the firm (his dad/mom is a client for example, which happen all the time too)
The other major benefit of being low status is that your close friends are more trustworthy. This relates to the prior paragraphs as your friends when you had nothing are the same people you’ll trust when you have everything. Naturally, you’ll lose a ton of people through attrition but it’s always good to know that the people who also make it are unlikely going to stab you in the back any time soon.
Bad Side of “Success”: One of the themes here is “detachment”. While it could be argued that this isn’t bad but a by product it does help us understand why many celebrities and artists die of drug abuse. When you make a big break through (sell a company, make the next big music hit) you get an enormous high. You’re thrilled beyond belief and feel like you’re a king. We imagine this is what your average person feels like when he goes to Thailand or another cheap place where he’s suddenly in the top 1% of the pecking order.
The big negative here is that you’re going to spend a lot of time trying to chase that high. In some cases it won’t actually show up. We’ve seen too many cases of one hit wonders and multiple failed companies (after one successful one). While it hasn’t happened to us (yet and hopefully never) it is very very very easy to see how it happens. When you make your first breakthrough we’ll all but guarantee you go through a stage of hedonism (nothing is ever enough!). If you’re smart/lucky you’ll recognize it and break the pattern. But. There is no doubt that many people fall victim to the spiral if they can’t find anything to replace the high they got from success (money/success is the most powerful drug in the world).
Good Side of Mediocrity: That’s right, there is an actual good side here. The good side is that you’re likely emotionally stable all of the time. While we don’t think this is a life most of our readers are interested in, just take the life of a monk (an extreme). By being able to remain stable at all times, the person is relieved of all worry from his life. He doesn’t have to worry about investments or people angling for his pot of the pie since there are no investment and there is no pie. Instead he’s able to make due with what he has and simply “lives”.
There is a lot of good here that only makes sense once you’ve seen success destroy a few lives. Don’t get us wrong, we strongly prefer immense success with emotional control. But. Living a basic life has many merits. It can create a meditative calm around your life as there are no tasks that need to be done. If you want to see what this is like, try to turn off all of your electronics and leave them for at least 2-3 days. You’ll be surprised at how addicted you are to working and “moving forward”.
Bonus: One last negative for being rich is motivation. If you have $3M in investments, you’re generating $180K without moving at 6% returns. This means a new idea that makes $20-40K but occupies your time, might be a complete waste of your time. This won’t make sense to regular people and will also become apparent when you’re unmotivated for projects most people would die to have.
This is why I think that “monk mode” is BS and balance is key. Of course you want to strive to start the side hustle and put the work in. Of course you want to learn and move up in your day job. But it’s good to smartly take advantage of a lot of what your income offers you in the moment. Go out and rave until 8am, go date different types, go have some beers and watch football with the normies once in awhile. Because once you get your secret sauce down for successful online product sales, you will be thrown into a world of constantly available infinite pleasure for the right price (which you can afford).
What goes up must come down, and having complete information to “price” the detriment of pleasure and comfort is something you’ve now built over time and through experience. So you can intelligently avoid the pitfalls.
ex. Finally creating a million dollar yearly revenue online product line, only to fall into drug addiction because you have too much money and time and you never dabbled and learned lessons earlier.
ex. Having no friends because you never spent the time to listen to others’ struggles and build relationships through common hardships/achievements and instead spent all your time “grinding.”
True. Plus, taking time off from your purpose allows you to clear your mind and not be thinking about the same thing 24/7, which can burn you out.
I think you guys misunderstand mediocrity (that’s a good thing – you’re far away from it).
A monk isn’t mediocre, he’s living a very nice lifestyle for a reason that makes sense to him.
A mediocre person lives his life chasing what other people wants. He lets those false desires control his emotions and as a result, he’s stressed out.
He needs a “prestigious” job in order to command respect. He feels jealous when his wife or girlfriend talks to another guy for too long. He buys brand items so that others will see that he can afford the brand. He hopes to afford a Rolex when he’s around 50 because he feels he’s supposed to have one when his peers have similar watches.
He’s stressed out because he doesn’t have control of his own emotions. The mediocrity that you talked about assumes the person has emotional control.
Ha fair enough!
“You already have your network since you had value!”
“Value” is subjective, and unfortunately most consumer’s (whose opinions matter since they need to be sold) INCLUDING wealthy consumers (consume here means however the “value” being “sold” IS being sold. A relationship of any kind as you essentially mentioned can be sold or consumed, valued or costly) are fucking stupid. I know you will disagree and call me a hater but I don’t care. Rich people are often just as stupid and gullible as non rich because they (the smart ones, the rest inherit which is the worst) got rich as specialists. THIS is fine, HOWEVER, they think their high level knowledge in their particular specialized field means they are just oh so smart, so they begin surrounding themselves (intentionally or not) with sycophants, bloating their egos and ultimately allowing themselves to get scammed by stupid shit like “the art world” etc. I mean millionaires here.
Now billionaires, I don’t know any personally, but I do know a number of millionaires and they run the gamut just like non-rich in terms of the stupid ego based shit they fall prey to. If anything, the money just facilitates the trappings even further. Consider how many rich people have maids that clean their houses without supervision. Shit like that is fucking idiotic and soft.
I’m saying all this to say quite frankly, the part about valueless people trying to network because they don’t have value in the first place is not an intelligent way of explaining that. I understand what you are trying to say but it’s just not true generally (and no I did not take it personally. In fact I used to think that way and it fucked me pretty hard.) Essentially Feels > Reals for most INCLUDING the rich (Theranos, Enron, all of the “art world”, The current valuation of most “tech stocks”, The Microsoft Windows OS’ suite (ALL of them) etc etc ad infinitum). You even mentioned how the lucky essentially bestow luck to those around them. This is true and shit like that (who you know how much they like you etc) trumps “objective value” EVERY TIME wrt to making money (at least in the low millions, higher than that I have NO CLUE tbh)
Craziest rant of the year ha!
Are you “too busy to respond” (I’ll imply this for you since you essentially already have by being dismissive) or just upset that you have no response? Introspection is a good thing, at any level of wealth, and your lack of it here really only further proves the points I made above, quite frankly.
Nah read it thought it was funny and approved that’s it
Valueless people is in fact the easiest way to explain it as most people don’t have any skills that wouldn’t generate any profit. Most are just rule followers and have no talent.
Value = things you can do that less than 1% of the world can do. Otherwise it’s *generally* useless.
>[Rich people] think their high level knowledge in their particular specialized field means they are just oh so smart
Nice try. Statistically speaking they are (IQ score)
Pretty much everything rings a bell, a highly accurate post.
In my opinion, finding the pros and cons in everything is a necessary mental model.
If you can’t find at least one con to something, you are in for a surprise. The pros are relatively easy to figure out, but you must also think of the ways you can get screwed.
From my experience, very few people actively do that.
Another solid post, you are closing the year on fire!
True, travel does get boring and can be seen as a form of “escapism” for some people.
Thats why I like business and sports. I started a small side business 4 years ago that keeps me busy and I started competing in powerlifting and track and field again in my late 30s.
Need to find a way to stay hungry…
“Value = things you can do that less than 1% of the world can do. Otherwise it’s *generally* useless.”
Yeah tell that to the countless cam girls online who make a living doing that. Are the ones who get rich in the top 1% (in terms of “value”) of ….naked camming, and thus more “valuable” than other “valueless” potential/ less profitable cammers? No, they are just perceived as better because they are better at selling themselves (or they go viral and get lucky). I mean you ignored everything I said earlier (not sure what was “funny” or “crazy” about it) but: Like I said, the art world is a bunch of crap, yet Banksy or whatever is oh so valuable. Art is subjective so you can go with better examples like I gave above. That Theranos chick? Was SHE “valuable”? You could argue she was in the top 1% of grifters I guess but what inherent value is there in that? She had a talent for stealing lol? And there’s nothing cherry pickish or new about people/ideas/etc who are liked being perceived as more valuable over ACTUAL things/people of value. Do you have any idea how many EXTREMELY talented programmers there are who are stuck in some shit hole in India and forced to be paid dogshit $$$ on Fiver, while lame white tech bros get the big bucks for “fitting into the culture”? C’mon man, you are better than this!
My point is pretty simple dude, one is MUCH better off with a large network and extremely good people skills with SOME level of expertise that they can bloviate on about in front of potential ignorant suckers with $$$ to be extracted, than they are with “talent” or “value” alone. Ofc the obvious response is that both are preferred but my point is that the both aren’t needed, at least for making millions and in FACT, getting good at controlling people’s feels almost ALWAYS has SIGNIFICANTLY higher returns than acquiring “value” due to the time constraints of acquiring (and benefiting from) said actual “value” vs the almost IMMEDIATE benefits gained from USEFUL networking/ making the right people like you). The idea that you portray that the rich can sniff out “valuable” people from “valueless” people is rebuked by all of my previous examples, and really just a simple glance at the world and how people think. The rich are just as gullible as everyone else, generally (millions idk about billions or high high millions) when the right conditions are met.
Your delivery is weakened significantly by your need to CAPITALIZE EVERY ADJECTIVE
I did that to help the slow hone in on what I am saying. Apparently it was enough for you to notice, still not enough to elicit an actual rebuttal to my argument. MAYBE I SHOULD HAVE CAPPED EVERY SINGLE WORD LIKE THIS…. You people are boring
heh I was thinking same exact thing. That’s how my little sister types.
Thanks for posting. I’m on the *trying to make it* phase and noticed a pattern similar to the people that have made it (detachment and cynicism).. don’t know if this happened to anyone else working like an animal and it’s just a byproduct of learning human nature and cutting Bs out of your life.
Ha, used to be u guys didn’t see the value or point in living a frugal life. Arguably some people actually derive pleasure from living frugally.
Crazy! That is true some ultra rich stingy guys actually get dopamine by saving money on meaningless items, never understood it
Another con to getting rich for me is the fight with ego. I say “is” because I still deal with my ego. When I first made a significantly amount of money, I wanted to tell someone about the success I had achieved. I quickly realized that wasn’t something you can talk about with most people for several reasons. For me, It is hard to know you are good at something and use that confidence to build your business, but then shut that switch off when talking to others about some of the things you have done. Now I generally try to “speak softly and carry a big stick”.
This might be your best article yet well grounded paints a perfect picture, thank you very much keep up the great work
Another perk of growing up poor is that 99% of food tastes better than what you had at home… Rice + chickpeas + mayonaise and salt
Hahaha this is so true.
I’ve lived poor since I was born, in 1969. I have always been the black sheep pf the family. Out of 6 children, I’m 5th, and I was treated quite different than others. I was bullied, assaulted and ridiculed. They made me stronger.
Soon I will surpass them all in earnings. I will own a massive farm, with livestock and good, healthy food. They can stay in the trailer park and eat soy.
Rich people generally look down on the poor, and for good reason. Poor people are poor, in the head. They get entertainment from the suffering of others. They are content with allowing big monied corporations to do whatever yhe fuk they want….pollute the land, water and air for profit. There are a few good people in the poor areas, but most of them are useless eaters. They won’t read a book on self improvement even if you promise to help them after they read it. Poor people are generally rodents, but I don’t want to eliminate them. Somebody has to buy my stuff so I can be rich in 2019. Poor people are a cash cow.
Interesting take, glad you made it!!
When you begin to really crush it – it gets lonely. You haven’t made as many new friends who understand your excitement at breaking free from the “gerbil wheel” and -if you’re socially savvy – you don’t talk about your success with your “normal friends” as it just creates rifts, jealousy and alienation
Very true about the success talk and regular people. Never do it!
In general if you are successful in any of the Big 3 (health, wealth, relatioship)…
People are not happy for you. I have a great wife, we often talk about having our ”core” to protect against the jealousy/people angling. Any top performer in sport / work / relationship etc. will have this problem.
Hard to have empathy when people are unable to follow simple rules of thumb, whether related to health, wealth or relationships/dating. By the way, even if you published the ”rules” for success, only the people able to have enough emotional strenght will execute.
On randomness: nothing is guaranteed, but a good process/approach will increase the odds immensely.
On good/bad : there is no free lunch. You can absolutely get what you want in life. But you cannot get everything.
What is in your opinion the best way to save money from inflation?
Downsides of health – fat people try to get you far.
An excess of emotions also does damage to us. The human zoo. You have to know boring, contemplating … to enjoy.
It is not the same rest to lose time. The society of pleasure has to be the society of unsatisfaction for us to climb more.
We arrive to an envelope stimulus, this well, everything is good.
“To live there are infinite ways, but in the fund we are all skulls …
Para vivir hay infinitas maneras, pero en el fondo todos somos calaveras…”
Very entertaining your point of view, thank you men.
Met alot of extremly rich people when I worked in a high luxury hotel, and from speaking to many of them you understand 2 things – the people that are born to money are 99÷ ungrateful a-holes that just spend it looking for some rush, and that money just shows the real “you” – a good guy will be good because he doesn’t care about money anymore and doesn’t need to “keep it cool”, and a jerk will be a jerk for the same reason.
Great post, keep on going!
Recently I’ve filtered out some bad “friends” by talking about my recent success & failures.
True friends will show genuine happiness upon hearing your success, snakes will try to hide their smirk when they hear about your failures.
Just thought of this many weeks later.
There is even a downside to being a good looking man.
What could it be? Surely being “harassed” by women must be great, right?
Well, remember there are gays in the world…
If you are a good looking guy, you see all the ugly side of men that hot girls are so familiar with.
This was one of the big reasons why I moved out of Silicon Valley.
BTW, you can add this reason as yet another reason to hate SV and move out of there.
Conclusion: even good looks have downside. Just ask all the hot women.