“Henceforth I ask not good fortune. I myself am good fortune.” —Walt Whitman
Whitman would fit in well with the “simplicity-frugal movement” of today. And the famous Walden Pond, by Henry David Thoreau, inspired me to appreciate the simplest pleasures in life — a mentality that’s helped both my mind and my wallet in equal measure.
Both Whitman and Thoreau’s written works exude self-possession, contentment, and the joy of living. This may sound a bit idealistic, but in reality, isn’t it really what most of us seek: wealth in life, not just money.
More often than not our motivations to live a “happy” life come from a drive to acquire lots of material goods. But the numbers show there’s not an equal relationship between the acquisition of status symbols and personal satisfaction.
Though earning more annually does lead to an increase in happiness, this personal satisfaction stems from the freedom additional income provides, according to a wide-reaching study conducted by the University of Pennsylvania’s Wharton School of Business.
With this in mind, the study calls into question the traditional wisdom that money itself buys happiness, when it might be more accurate to say financial freedom does.
If we’ve seen that getting the “things” that we want doesn’t help us manifest the true happiness we want in our lives, it might be time to re-evaluate our relationship with buying expensive items — and turn our focus elsewhere.
Why Buy a Rolex?
My friend Sharlene really wants a Rolex watch but the average price of one is $7,000 to $12,000. Highly coveted, rare models like the Paul Newman Daytona model are sold for hundreds of thousands of dollars.
Buying a Rolex is one of Sharlene’s important life goals. I am not sure why she wants one but if I had to guess, it’s probably not so that she can keep extremely accurate time.
Telling time is as simple as looking at one’s cell phone, so owning a watch is often a symbolic representation of one’s wealth, a fashion statement, or some combination of the two.
The Sociology of Status Symbols
On the matter of wealth, status, and prestige, there is certainly nothing fundamentally wrong with wanting to dress to impress, and that is why many people buy a Rolex.
“Coming from a biological perspective, nature has designed us humans to survive as well as thrive,” says Grinil Khanna, a clinical psychologist and family coach.
“One of the unique ways we thrive is by forming complex social systems through friends, co-workers, and social media to name a few,” Khanna adds. “Status through lavish, materialist items is a huge factor in these social systems because it makes us feel like we are important, desired, and accepted by our communities.”
Sharlene is not alone in wanting recognition and gratification through the ownership of material items. About 77 percent of millennials made a purchase in order to post about it on social media, a recent study from Chase Bank found.
We are wired to seek validation from our peers, and one instantaneous way of achieving this is through the purchase of highly sought-after items.
But is the high price point of a watch worth the status in the end?
Luxury Smartwatches Bring Competition
With the prevalence of digital time functions on cell phones, in some circles, watches are taking on an entirely new role for a fraction of the cost.
I’ve noticed that many of my daughter’s friends eschew a traditional watch and use their phone instead. Or, if they do go for a watch, they’ll shell out a few hundred bucks for an Apple Watch.
The newest Apple Watch Series 6, starting at around $400, is a far cry from $10,000, yet this digital watch drastically outperforms a Rolex. Features like cellular connectivity, health and wellness tracking, and an Ion-X glass display make the price of an Apple Watch far more attractive than that of a Rolex.
So, on one end of the spectrum is Sharlene, a woman of middle income dreaming of owning a Rolex, and on the other, my daughter (and many of her cohorts born after 1980) relinquishing the traditional watch to the “antiques” bin.
Well, who really cares? If Sharlene wants a Rolex, it certainly isn’t any of my business. And each of us has the right to choose our own goals and values.
Are Social Symbols Worth the Cost?
Purchasing highly sought-after items can bring instant gratification. But are these high involvement purchases worth it?
“When it comes to quality of life, you need to consider how a watch contributes,” says simple-living advocate and public speaker Joshua Fields Millburn, who opines on his “less is more” philosophy via the aptly titled podcast The Minimalists.
“I used to earn about $200,000 a year at the peak of my corporate days, but I was miserable — my quality of life was poor,” Fields adds.
The more things you want, the more difficult it is to fulfill those wants. If you are unsatisfied with what you have, and always want more, you’ll never be happy.
So what is the solution? In life and money, if you are constantly striving and desiring more, you are dissatisfied with what you do have. Jean Chatzky, in her book The Difference, offers a wonderful strategy for upping your happiness:
Compare yourself with those who have less than you, not those who have more.
If Sharlene compares herself to celebrities, she feels poor and inadequate. She spends a lot of her mental resources striving to buy a Rolex watch, which costs 30 percent of her annual income.
The Bottom Line
This anecdote about Sharlene isn’t intended to suggest that there are good or bad financial goals, nor that one shouldn’t aim to fulfill some short- or long-term financial desires. The point is that it’s important to look at your budget on a broad scale in order to avoid debt and money regrets.
Consider other ways you can achieve respect and acceptance from exterior forces without buying a Rolex or spending a fortune on superficial items. Think through your options and values before dedicating your money to a fund that may not be worth your time after all.
Barbara Friedberg received her M.B.A. in finance and writes about managing your money habits and building wealth. You can further your knowledge of financial strategy by reading her book, How to Get Rich Without Winning the Lottery.
Additional reporting by Ellie Schmitt.