Welcome to Friday, hustlers.
You know how everyone’s always talking about “keeping up with the Joneses,” and how it’s best to not compare yourselves to others? Well, this Would You Rather we’ve got for you today will test you on just that ;) I reckon most of you will vote the financially smart way considering you’re on this site, but do try to answer this honestly so we can get a good discussion going.
You ready for it? Here we go….
Would you rather…. Have a salary of $50,000 where everyone around you only has $25,000 – OR – Make $100,000 but everyone around you makes $200,000?
Haha… Not as clear cut is it? Obviously making more is the best answer for you and your goals/family, but what happens when everyone around you is making double? For presumably doing the same amount of work as you are? (There’s a ton of factors that would go into this of course, so let’s just assume everything else in life is the same besides the salary people are making).
Would you be able to comfortably live your life when everyone’s blowing more $$ on fancier cars, houses, vacations, toys, etc? Which odds would go in that direction since a vast majority of people aren’t as sexy with their money as you are? How would the quality of your life change? Or would it? (Also, what happens to everyone else’s life in the reverse? $25k is not much for most people.)
Initially I chose the $100,000 off the bat, but then I stopped and pictured exactly where I’m living now and pretended that all my neighbors, friends, etc were all making $200,000. Would that make me feel funny? Truthfully – yes. It definitely doesn’t make me feel BETTER, haha… But why? Do I care about fancier stuff or what others are doing? Not really. In fact, I ignore most everyone. But the idea that I’d be the only one with 1/2 of what everyone else gets just feels weird. And again, in this situation it’s not like I could work more or get a better job/etc to pump up the $$$ – we’re all magically stuck at our salaries!
And perhaps that’s the problem I have with this. It strips away the level of effort or smarts we all have. Everyone gets a flat $200,000 instead of those of us who choose $100,000 no matter how awesome or sucky we are at our jobs. You’re forever earning 50% less!
But then I close my eyes and focus on what a lifestyle of earning $100,000 would mean. Would I be able to live an awesome life? Hell yeah! In fact, I’ve earned $100,000 or more two out of the last three years, and I can damn well tell you it’s better than making $50,000 :) The ratio of lifestyle and happiness isn’t an incredible amount (it doesn’t take much for me to enjoy my life), but it’s certainly noticeable. And frankly, much more desirable. With an extra $50,000 you could speed up your goals an extraordinary amount.
[Of course, the main problem w/ this whole question is that we’re not all making the same amount of money right now so depending on where you are on the scale, $100k might sound lame if you’re making more, and $50k might sound incredible if you’re making less. But just play along anyways and assume this morning that everyone’s salaries got wiped away and now 99.9999999% of the world will make the same amount, and then there’s you ;)]
When all things are considered however, I’d opt for the $100,000 in the end. Yeah the emotions might take some getting used to, but ultimately I’d need to do what’s best for me and my family. And we can live a much better – less stressed – life at $100k/year than we could at $50k. We could make $50k work too if needed, but with a magical fairy doubling it on the spot why not? Also, wouldn’t that mean my wife now makes $200,000? ;) Ooooh!!! Yet another factor to consider! Haha…
The Harvard Study: Is More Always Better?
Before I turn it over to you to get your thoughts, let me tell you where this whole thing came from…
I was reading one of my newer favorite blogs, A Wealth of Common Sense, and one of the articles Ben wrote was on a study that Harvard researchers did on how people (and monkeys!) compare themselves to others. They asked this same salary question to their subjects, and here were the results:
In the end 52% of the respondents preferred the $50K scenario. These people would accept half as much money in absolute terms as the second option just so they could make twice as much as their neighbors… Unfortunately, perception matters when money is involved. The problem is that there will always be someone getting richer at a faster pace than you are. Stating the obvious, this is not a great way to live your life.
So more people chose the $50,000 option than the $100,000 option! WOW! I figured it wouldn’t be a total win for the $100k’ers, but to LOSE the battle in the end? Pretty incredible.
If you’d like to see the entire story by Harvard, I dug it up here [PDF]: Is more always better?: A survey on positional concerns
There’s a lot of garble in there (ie. stuff that only smart people would follow ;)), but here were some other interesting choices they gave people:
A: You have 2 weeks of vacation; others have 1 week.
B: You have 4 weeks of vacation; others have 8 weeks.
A: Your IQ is 110; others average 90.
B: Your IQ is 130; others average 150.
A: Your physical attractiveness is 6; others average 4.
B: Your physical attractiveness is 8; others average 10.
A: Your child has 12 years of education (high school); other people’s children have 8.
B: Your child has 16 years of education (college); other people’s children have 20 (graduate degree).
This must have been one fun study :) Here are the choices I would have made:
- Vacation: More! I could really care less about others here (my wife agreed)
- IQ: I was torn 50/50. I hate feeling stupid around people, even if I’m smart at 130 (wouldn’t the scales not matter anymore if everyone else is smarter than you thus making you not smart?)
- Attractiveness: Same problem I have w/ the rating here too, but I’d def. choose 8 :) Would be hard to erase what we consider attractive after living a life having a perception of it already.
- Child’s education: More every time! As much as I don’t care much about other people in normal situations (ie, not in weird magical land like this one), I DEFINITELY don’t care at all about other children… Wait, that sounded bad, haha… I mean, I don’t care whether they’re smarter/better or worse than mine. I just want my boys to be happy and healthy and live a great life!!
Okay, now it’s your turn.
What would you rather have? $50k while everyone else has a $25k salary, or a $100k salary when everyone else has $200k? What was your initial thought before analyzing it to death like I just did? ;) What do you think about some of those other Harvard questions?
If you want to waste more time at work right now, here are some of our past Would You Rathers too ;)
- Would You Rather… $1 Billion or 15 years of life?
- Would You Rather…. Weight vs Debt
- Would You Rather… Spending Money Qs
- Would You Rather… Saving Money/Making Money
While we’ll never be able to fully test these in real life, they’re great things to consider while working on our money. And a much more fun way too ;) Enjoy the weekend homies.
[Photo cred: Mark Dodd]