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Is it possible to achieve income satisfaction?

April 13th, 2011 | Author: Bogey

In the extremely scientific poll I conducted last week, I asked my readers how much money they currently earn, as well as how much money they would like to earn. Throughout the process of reading the various responses, I was absolutely shocked to learn that all the responders had one thing in common:

They all wanted to earn more money than they currently do.

OK, so I wasn’t really shocked. Quite frankly, when I posed this question last week, I knew almost exactly the type of responses I would receive. The reason I even bothered to ask the question was that I wanted documented proof for some of the things I am about to tell you today.

You will never be satisfied with your income

Never is a pretty strong word. In reality, the top 0.1% of income earners around the world might actually be satisfied with their income. But unless you are Bill Gates, Carlos Slim, or someone else similar (richest people in the world), someone is always doing better than you are. There is always another rung on the ladder to be climbed. Consider the following facts about my income:

  • 4 years ago I was a college student earning maybe $1,000 each semester from part time work, and $5,000 each summer if I was lucky. I probably never earned more than $7,000 in any one year throughout the time I was going to college. I could not wait to get out into the “real world” and start earning real money.
  • My first “real” job out of college paid $40k per year. I remember getting offer letters from about 4 different companies when I was interviewing as a college senior. All the offers were pretty similar when it came to compensation. I just remembered thinking that I was going to be rolling in money as soon as I began my new job. This feeling lasted for about 3 months. By that time I learned that many of the people I was working with on a daily basis were earning anywhere from 150% to 2,000% of my current income level. I remember thinking that I couldn’t wait to gain more experience so that I could start moving up and earning more (starting to see a pattern here?).
  • About 4 years into my career, I am now earning a little over twice what I was earning when I started out. When I reached this number, I felt elated for several months, but now, my new higher level of income is the new normal for me. Now I have a job with more responsibility, and I work with some of the most successful people in my city. Needless to say, my reference point has once again been escalated, and again I realize that there is much more potential for what my income could be compared to what it is today.

Now, let’s look at some of the current/desired income numbers you the readers provided last week:

  • Current incomes ranged from $7,500 for a 4 month stint as an intern, up to $100,000 for what I assume is a full time position.
  • Desired income levels ranged from $50,000 (current income for this person was just slightly less than $50k) all the way up to $500,000 (current income level was $100k in this case.
  • In all cases, desired level of income was higher than current level of income (sometimes only slightly higher, but in most cases, much higher).

It’s safe to say that of the people who interact on this blog, the majority of us (including myself) have not yet reached the point of income satisfaction (and it is unlikely that we ever will). The perfect level of income always seems to be a moving target. There is always someone that we know who is earning more than us. There is always something else that we need or want. The savings account or retirement account could always stand to be just a little bit larger.

So what do we do?

The biggest problem I see with income satisfaction being so elusive is this:

If you are constantly thinking about achieving a higher level of income, you’ll spend the majority of your time working toward a goal that will never be reached (because it is a moving target) and you’ll be less satisfied with what you have today.

Let’s face it, if you’re the type of person who is reading Back Nine Finance on a Wednesday in April, then you are probably more focused on earning and income than the majority of people in the world – nobody winds up here by accident!

But if we all want to earn more, and we know it’s highly unlikely we’ll ever reach the point of income satisfaction, then how do we use this knowledge? Simple, really:

  • Admit that earning more won’t really make you any happier. Think back to the last time your income increased. Once this initial feeling of euphoria wore off (in a few days, weeks or months depending on the size of the increase), things felt “normal” again pretty quickly. You might have a few nicer toys around you, be living in a nicer neighborhood, driving a fancier car, etc.  But it likely didn’t take long for you to have another higher income goal in mind, and start pushing toward it.
  • Understand that if your basic needs are met (along with a few wants), then you have it made. If you have acceptable levels of food, clothing and shelter, and at the same time can save some amount for your future, enjoy some hobbies and splurges today, then any increase in income won’t really increase your quality of life that much. Any gains beyond this basic standard of living will only be marginally beneficial to your level of happiness. It always seems like pursuing some big goal in life, such as a brand new car or a nicer house will drastically change your life. But as least for me, 3-6 months down the line, I’ve settled comfortably into my new normal, and I’m on to the next big thing.

Conclusion

If at times it seems like you will never arrive at your destination (whatever it is you are wanting out of life), consider this:

Perhaps you have already arrived.

We are living in amazing times:

  • Within 15 minutes, I could get into my car and drive to enjoy virtually any type of food I can imagine.
  • Via the internet, I can communicate and interact with people from all over the world, almost instantaneously.
  • We actually have daily discussions about how we’ll save enough money for a retirement that might be 30 years or more away instead of daily discussions about how we’ll feed ourselves or the kids.

I’m not saying that you shouldn’t strive to earn more money and increase your standard of living, savings, etc. But the issue with this mentality is that it forces you to focus on the future to the detriment of today. If you’ll stop and take a look around, you might realize that you’ve reached a pretty good place already. I’d hate for you (and me) to miss out on the blessings of today because we are caught up in wanting more for tomorrow.

What do you think – is it possible to reach the point where you are totally satisfied with your income?

Do you ever find yourself wanting more income without a clear reason why?

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Posted in Career, Earning & Income, Financial Psychology, General

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