Or I could get a new smartphone, I guess.

Work and wealth are intertwined, but one is not a straight line to the other.  We all remember the feeling of receiving our first paycheck.  We tore open our pay stub and looked at the modest amount within and thought, “Hot damn!  I’m rich!”  Our thoughts bubbled with the possibilities of all the things we could suddenly afford.  For most of us, the paycheck, and the giddy feelings of possibility, were soon a memory.  We went back to work, craving our next paycheck and all the stuff it allowed us to fill our lives with.  We stepped onto the working man’s treadmill and never looked back.

Wealth is a Harvest, Work is a Habit

Without knowing it, most of us began to accept as fact this notion:  If work = money = stuff, then more work = more money = more and better stuff.  Makes sense, right?  The harder you work, the more you are likely to become wealthy, right?  It turns out things aren’t nearly that simple.

In his book The Power of Habits, author Charles Duhigg argues that all habits are a combination of cue, routine, and reward.  In this case, the cue is the desire for something we cannot afford.  The routine is work, and the reward is ultimately the ability to buy the thing.  Since the only way most of us know how to obtain stuff is through work, we developed an almost irresistible habit to work.  What’s more, as human beings, we want to assign virtue to our actions, so work itself becomes a virtuous.  This is a particularly strong social compulsion in the United States, where many genuinely believe that work is what gives them purpose.

It’s somewhat easy to understand why those who work the system of social safety nets are villainized.  The thought process goes: If work is a virtue, and work gives us purpose, then those who opt not to work at our expense have neither virtue nor purpose.  “How dare they? If I’ve got to do it, why not them?”  Though I think our sense of fair play is an element here, I think the violation of our work habit is the bigger one.  All one has to do is read an article at Forbes or Yahoo about early retirement, then the subsequent comments.  They can generally be divided into three groups:

1. Those who believe retirement is impossible
2. Those who believe that early retirement is laziness
3. Those who pity the retiree their lack of purpose

If work leads to wealth, and work is good, then why is amassing enough wealth to stop working looked down upon?

This is where we begin to encounter the logical fallacy we have all been trapped within.  Work provides compensation, but real wealth is more like a carefully tended field.  Wealth replaces work because it is self-sustaining.  What’s more, wealth frees us up to pursue our actual purpose– something all too few of us ever discover.

Wealth is Modest

My very favorite personal finance book is called The Millionaire Next Door, by Thomas Stanley.  For the past several years, I have read it every year around New Year’s.  I find that each time I read it, my sense of passion for both early retirement and frugal living is renewed.  The book is essentially a research study into the lives of American millionaires.  If I could sum the entire thing up in one sentence, and if there’s one sentence I’d want you to take away from this post, it would be this:

The average American millionaire lives far below their means, and those who appear conspicuously wealthy are among the least likely to have accumulated wealth.

Really take the time to digest that for a second.  From their choice of watch and vehicle to their choice of suit, The Millionaire Next Door deconstructs the myth of the American millionaire.  A few of my favorite examples:

• 57% of American millionaires drive a modest, American-made car.
• The maximum price 75% of millionaires have ever paid for a suit: $600.  A watch? $235.
• They are far more likely to drink cheap domestic beer than expensive scotch.
• Less than half have ever received a single dollar of inheritance.
• Two thirds of them are self-employed.

These are just a few of the cute anecdotes the book actually takes the time to quantify, but the point is, if we are truly happy and prosperous, we should have neither the need nor the desire to demonstrate our prosperity to others.

Live modestly, save everything, find meaning

The heading above is what it all comes down to.  Once we see the Work-Wealth fallacy for what it is, we can set about the work (ha!) of breaking a lifetime of habit.  Purpose is for the individual to seek, not for their profession to define.  If I am a house painter, and my neighbor is a doctor, is his purpose greater simply because he has a more esteemed career?  Of course not.  It’s nonsense.

I’ll touch on this more in a future article, but living modestly is both the key to saving and a critical step in finding purpose and happiness.  To me, stuff is a four letter word.  Don’t get me wrong, I like my toys almost as much as the next guy, but after a few years, the brief endorphin rush of getting some new tech toy or plaything no longer has the appeal it used to.  Watching my net worth (and the counters to the right) grow larger?  Now that’s addictive!

Once we are living modestly and saving everything we can, we can invest that money wisely and put it to work for us.  Money is good, but money that makes us more money is even better.  In this, we sow the field of our future wealth and cut away a few more of the strings that bind us to our work habit.

I’ve just started down the path of evaluating everything on its long term ability to make me happy.  The emotional or chemical reward of a big purchase has to be weighed against its impact on the long term goal:  To retire early and set my own purpose on a daily basis.  Most days, it’s simply no contest.