Nova workboard

a blog from young economists at Nova SBE

Why do people want to be rich?

“If only I had enough money, I could… “

“If I had money I would… “

“Ff only I were rich…”

We heard people referring to these quotes all the time. It seems that the only obstacle separating people from living a fascinating life is money itself.

One thing that is hard to state is the importance of money; everyone knows that people need money to be able to purchase the basic goods, the ones that are truly necessary and that we cannot live without such as food. People that do not have sufficient money to satisfy the basic needs, when confronted with a situation of an increase in their disposable income, see their quality of life increasing dramatically. On the other hand if people already have a considerable amount of money that allows them to have their basic needs fulfilled, an increase in the disposable income would not have the same impact: at the margin their value of money has diminished.

Money is many times the source of frustrations due to the inability of average income people to acquire the quality of life of richer people. Humans have an obsession with wealth. Everybody wants to be rich, but the truth is when people are confronted with the question: “what being rich means to you?” they can’t define it because they don’t really know. People are utility-maximizing agents, they make decisions always maximizing their happiness, trading leisure for money by working and then they use that money to buy goods and services in order to maximize their happiness.

However, can the money buy everything? In my opinion the answer is no. Personally I believe that there are several ways to buy a fascinating life and money is just one of the currencies to that. To some individuals being rich means having a large amount of money in the bank, to others it just means not have to worry about money. At the margin is it more important to have more money or to have other currencies for happiness such as knowledge of languages, friendships, know how to travel…? Having money can give us a little freedom in the sense that we pay for experiences that otherwise we couldn’t have but still having a lot of money also have disadvantages such as being unfairly judge, never knowing if people are really interest in you or in your money and of course, money doesn’t buy happiness.

There is a certain propensity to blame money for our problems, but we can be wealthy without being rich. It is up to people to set up their priorities and think about the currencies that they need to meet their goals, and to be able to have that amazing life that they aim to.

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Author: studentnovasbe

Master student in Nova Sbe

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