Everyone wants to live “the good life” – right? I know I do. Of course what constitutes the “good life” for one person can be very different from another. And even for the same person that definition can change over time. Let’s talk about some ways to live that good life, without misery but also without going broke.
The Diderot Effect
Have you heard of Denis Diderot? He was a French philosopher who lived in the 1700s. Diderot spent most of his life poor but in his later ages he came into quite a lot of money. Once he had this new found financial freedom, he decided to buy something nice for himself. Who can blame him, right?
With this new fancy item (a “robe” or “dressing gown”) in his possession he started to feel that perhaps it was out of place. It was nicer than everything else he owned. So he decided he should buy a couple more items so he wouldn’t look and feel out of place. Once he had those other new items he realized the older possessions really looked out of place. Guess what he did? Yeah, he kept buying and upgrading until he found himself in debt.
Mr. Diderot wrote an essay titled Regrets on Parting with My Old Dressing Gown, in which he wrote:
“I was absolute master of my old dressing gown, but I have become a slave to my new one … Beware of the contamination of sudden wealth. The poor man may take his ease without thinking of appearances, but the rich man is always under a strain.” – Diderot
Perhaps you have heard the stories of the large number of lottery winners that wind up broke and in debt? Same situation. It’s the Diderot Effect. In striving to live what these people think is the good life, they actually wind up bringing a lot of misery upon themselves. Are you thinking “But that would never happen to me”? I’m sure they thought the same thing, so be careful.
A personal story
I can’t help but think of how silly it sounds that people with high wealth could blow it so easily. But all money does is amplify who we are and how we act. If we struggle with this in any fashion right now, chances are that it would only get worse if we had a lot of money thrust upon us.
A few years ago my family and I lived in our dream house. It was around the bottom of the housing crash and we found a beautiful waterfront house that was selling for way less than it cost to build. Even discounted it was a lot of money, but we could afford it fairly comfortably (as long as our income didn’t drop).
It was a beautiful three story house with five bedrooms, four and a half baths, about 4,000 square feet with an elevator and whole-house generator. Now look out the back window to the dock on the deep water waterfront property. It was awesome, so we bought it.
Within a short period of time we realized we were not only short on furniture because this house was bigger than our last, but also the furniture we had didn’t “look right” in the new place. So we bought some new couches. Then we needed a coffee table to compliment the couches. Of course we needed some area rugs. Spare bedrooms can’t sit empty, so we furnished those.