Your money isn’t worth what you think it is.

“Money never made a man happy yet, nor will it. There is nothing in its nature to produce happiness. The more a man has, the more he wants. Instead of its filling a vacuum, it makes one. If it satisfies one want, it doubles and trebles that want another way.” Benjamin Franklin

Quick question: how much more is $100 worth than $10? Easy, right? It’s clearly worth 10 times more, isn’t it? Quantitatively, that would be correct, but human emotional experience is rarely quantitative, and money is no exception. Instead, a person’s utility of money experiences diminishing marginal returns just as surely as any other consumable good, often varying drastically from the linear progression of numbers.

What are diminishing marginal returns? Think of a lemonade stand in the summer. You’ve just been working for a few hours in the hot sun, and across the street you see that the neighbors adorable kids have set up a lemonade stand. Your thirst response lights up like a 5-alarm fire and it’s all you can do not to run over and guzzle their entire supply. You probably think to yourself that lemonade is the best thing in the world, and if they told you it was $10 a glass you wouldn’t hesitate to fork it over for that sweet refreshment. But fortunately, these sweet kids don’t fully grasp your predicament of the economic vulnerability it creates in you, and are only charging 25 cents. So you fork over a measly quarter and down the glass in one fell swoop. It tastes like liquid gold and you think to yourself, “Why did I never realize how amazing lemonade tastes?!”

Of course, at this fantastically low price, you figure you might as well have another glass! The second glass still tastes pretty darn good, and you’d have probably paid $5 for it, but these sweet kids still haven’t caught on to your thirst dilemna and are still charging the same 25 cents. After the third glass, which you mentally gauge you’d probably have been willing to pay $1 for, because it’s still pretty darn good lemonade, but you’re much less thirsty than when you first approached their stand. But still, it’s pretty hot out, and you’ve been sweating for a few hours, so you buy one more glass for good measure. After all, it’s still only a quarter! But now you’re feeling like it’s worth about what their charging, so it’s not a bad deal, but you’re not making out like a king.

After you finish the 4th glass, the neighbor’s sweet 5 year old daughter looks up at you and asks you if you’d like another. By now, some of the sugar has gotten to your head and your thirst is pretty well raked. So you think to yourself, “Is a glass of lemonade really worth 25 cents to me?” And it’s not. That same glass, of the very same lemonade, that just 3 minutes ago you’d have paid $5 for, now isn’t worth a quarter to you. You sure as heck wouldn’t buy 10 more glasses of lemonade. Welcome to the world of diminishing marginal returns.

The interesting thing is, that money itself has diminishing marginal returns. $100 should be worth twice what $50 is, right? That’s the very nature of money! If you have twice as much, it must obviously be worth twice as much! But take the concept of money out of the picture, and go back to the lemonade example. If I gave you $50 to spend, you’d spend it on whatever was at the top of your list of things that you most would like to have under $50. If I gave you an additional $50, for a total of $100, you’d then spend it on the next item or items on that list, but which weren’t as “valuable” to you as the item(s) you purchased with the first allotment of $50. Now carry that out to infinity, and imagine I keep giving you $50 (or $50,000) every time you asked for it. Pretty soon, you’d run out of things you really wanted to buy and would just start throwing money around on whatever whimsically crossed your mind.

There’s an additional psychological element at play here. More is less. And not just in the world of makeup. When you exceed a certain amount or number of possessions, your cumulative enjoyment of those possessions actually decreases! This has been scientifically shown in countless studies. You might think that if you’re a certain level of happy right now, and you added something to your “pile”, you’d most certainly me more happy. But that is simply not the case, for many reasons.

For starters, when you have more spending power, and use it to buy more “stuff” easily, each item that you possess becomes less and less special, because it’s just one of many things you own. Compare the appreciation that a homeless child would feel towards the one ragged toy in his possession, while the spoiled child of wealthy parents who bestow countless gifts and possessions on their child, only to wonder why the child doesn’t value or respect anything he or she owns, and is constantly asking for more and more.

On top of that, every new possession gained results in an incremental loss of enjoyment from each possession that you already owned, not to mention the added stress of keeping track of one more thing in your life, and the subsequent feeling of loss and waste that you don’t have enough time in your life to enjoy everything that you have. You used to have all the time in the world to spend fishing, or having a beer with your friends on the porch, until you got that fancy new Porsche, a nice new set of golf clubs, and a condo on the beach. But every time you enjoy one thing, you’re giving up the chance to use each and every other thing you have! This process then exacerbates itself because now you’re frustrated that you’ve got all this stuff and why isn’t it making you happy, and that just makes you even more unhappy!

Now we’ve gone from diminishing marginal returns of money to negative marginal returns. More money makes you less happy! Remember our lemonade stand? Let’s take that one a little further. All of a sudden, these sweet kids of your neighbors unleash their sadistic side. Before you know what’s happening, they’ve strapped you down in one of their garden chairs, and start funneling lemonade into your mouth! What started as delicious refreshment now is making you sick, and your belly feels like it’s about to burst. If they kept going, it would eventually kill you! Granted, this is an extreme example, but money has the same effect on people in so many ways. At first, it feels awesome to have lots of money, but after a while that money comes with a higher price than the “value” it grants the owner.

Wait, that can’t be right. We all have grandiose dreams of what we’d do if we had a million dollars, or heck, why not a billion? When Warren Buffett announced that he was sponsoring a contest that would award anyone who picked a perfect bracket for the NCAA men’s basketball tournament one billion dollars, how many people started spending that money in their heads. Lottery sales are infinitely higher when the payouts are higher, which doesn’t make sense because we’ve just proven that a higher amount of money will actually make you less happy! But because we’ve adopted money as our absolute purveyor of value, and money is expressed in linear quantities, we’re trapped in the great capitalist lie that more is always better. Mathematically, one billion is one thousand times more than one million. So therefore one billion dollars must be one thousand times better than one million dollars! But money is NOT value. Money is a means to an end, not the end itself. The end is happiness, and happiness is not linearly related to money. Just like lemonade.

So what to do? We need money to live, so clearly the answer isn’t to throw it all away and reject the whole monetary system! We know that $0 isn’t enough to live on, and we’d be really unhappy if we couldn’t afford basic necessities like rent and food on the table. But we’ve just discovered that an unlimited amount of money makes you unhappy too. So where’s the sweet spot? What’s the magic number? Turns out, for most people, it’s $75,000 per year. Enough to afford the essential basics, plus a few luxuries here and there, but not enough to incur the detrimental effects of negative marginal returns that we discussed above. Kinda like Goldilocks and the 3 bears – not too much, not too little, but just right. 🙂



Size DOES Matter.

how-big-are-youThis past weekend, we held a flying trapeze class for a group of aerialists from Sky Gym in Atlanta. Among the students in our class were a dad and his teenage son Julian. Julian was very enthusiastic and attentive, and focused considerable energy on attaining the knee-hang position and back-flip dismount, the preliminary tricks beginners tackle in their first class. Flying trapeze didn’t necessarily come naturally to Julian, and he lacked the grace of his female classmates, but he was determined to succeed. After each turn he diligently listened to my feedback on his efforts, a rare skill for a teenage boy, and by the end of the class was able to attempt and make a catch. When I caught his outstretched arms, he let out a cry of genuine elation, and I realized what a special moment it was for him.  After the class was finished, this impression was confirmed when Julian’s father took me aside and thanked me for giving his son such a valuable experience.  He explained that his son had difficulty competing in sports in which success depended more on size than athletic ability, and it affected his confidence levels.  But learning aerial arts, and now flying trapeze, was showing him that there were areas in which he could succeed based more on the ratio of strength to weight than on sheer size alone.  

This was a poignant moment for me, as I also struggled mightily with the same issue during my high school years.  I was a prototypical late bloomer, taking far longer to hit my various growth spurts than my peers.  It didn’t help any that I was one of the youngest in my class, having a spring birthday and spotting anywhere from three to nine months in age to my fellow classmates.  As an adult that hardly matters, but to a 13 year old it can make a tremendous difference in physical maturity. Malcolm Gladwell documented this effect well in his 2008 bestseller “Outliers: The Story of Success”.  All told, I faced a significant disadvantage when it came to succeeding at various size-dependent high school sports.  I might have been far more athletic than many of my larger peers, but that didn’t matter if they were far taller and heavier.  I made my way around this as a member of the wrestling team, but I lamented not being able to play the marquee sports of football, basketball or baseball.  To this day I still battle internal demons of insecurity and self-esteem that arose in large part out of the size discrepancy I felt so overwhelmingly through my developmental years.  

Finding flying trapeze and reaching the level of professional performer went a long way to soothing deep wounds, as did some serious soul-searching and a fair bit of therapeutic assistance (thanks Benita!), but it wasn’t an easy road or an overnight journey.  Hopefully Julian can take his experiences with acrobatics and flying trapeze and find a self-confidence at a young, vulnerable age that I was unable to, and it will help him realize that although size DOES matter, it’s not the only thing that does.

Rest In Peace, Tortured Souls

Robin_Williams-EsquireIt so often seems that depression and success come hand-in-hand in this world. We may ask ourselves how it is that those who seem to stand highest on the mountain of life could possibly feel that their life is empty or unfulfilled, but it is exactly that achievement of exalted heights which often creates such intervening lows. When one has soared through the sky like an eagle, it might seem hard for them to stand on the ground afterwards and be content. Especially when all those who come across their path are telling them how great it was when they did what they did, when they flew so high, and their identity becomes wrapped up more in their talent than in who they are beyond that talent, under the surface, as a human being. It is a wonderful thing to share one’s talent with the world, and to be appreciated for that talent, but at the same time it is crucial that each person be loved and respected for the restless and imperfect soul that resides within. Robin Williams, Heath Ledger, Philip Seymour Hoffman, and so many other immensely talented individuals before them, walked a treacherous path that rocketed them into the stratosphere of human experience at times, and surely left them struggling at times to maintain the exaltation of those moments, to be at peace with the simpler side of life where there was no applause, no award shows, no well-deserved public adulation. Regrettably, we as a society have chosen to accentuate our admiration for what these talented individuals have accomplished, yet overlook the vulnerable human vessels which carried those talents through their lives as an immense blessing and occasional heavy weight. It’s too easy to assume that rich and famous people have no problems, that their lives are one big perfect party, yet forget about the fact that there is rarely deep substance in such a life, and even more rarely is a person appreciated for simply being the person that they are. Robin Williams was better than anybody in the world at making others laugh, and we are blessed to have witnessed his talent, but maybe if he’d known that he was worthy of our love even without the laughter, he’d have been more at peace with his life and better able to see the constant joy in it. Take a moment to remind someone that you care about them, whether they make you laugh or not, whether they have a talent or none whatsoever, whether they are doing anything in particular or nothing at all. Simply because they are the person that they are and that’s good enough. Rest in peace, all the world’s tortured souls.

Flying through the air with the greatest of ease. For the most part, at least..


ringlingtrapezeI ran away and joined the circus. Literally. In my life so far, I have traveled the world many times over as a professional flying trapeze artist, and had an untold number of adventures in an untold number of places. I have performed for heads of state, for ecstatic roaring crowds, and for children of all ages. Then after I’d savored the moment and relished the glory in every way that I could, I ran away from the circus and ended up joining a home. Or sort of, at least. I’m now retired from performing, and am the proud father of twin boys who just turned one year old this past weekend. So you could say that my life is still quite the circus, I’ve just traded one version for another!

I never imagined my life would turn out this way. As a child, I dreamed of conquering the business world and amassing great fortune. My favorite childhood board game was Monopoly, and I was ruthless when it came to trading properties (especially Boardwalk and Park Place!) When our family visited New York City my greatest wish was to visit Wall Street – I was 5 years old at the time! The thought of being a professional acrobat couldn’t have any more off my radar. I remember visiting Ringling Brothers Circus in my youth at the Omni Coliseum in Atlanta, and being so overwhelmed by the that I told my parents that was the last thing in the world I could ever imagine myself being able to do. Little did I know that I would end up performing alongside some of the very same talented artists whose phenomenal exploits I witnessed during my youth. I was a whiz at math, not somersaults! Instead, I studied diligently and excelled in school, eventually attending Stanford University where I pursued a degree in Economics. The business world was mine for the taking!

But life has many detours, and mine has been no exception. A post-college stint at Club Med that was supposed to be a short and fun diversion before joining the “real world” led into a decade long career flying through the air, until a torrid love affair that began high on the trapeze brought me back down to earth with the responsibility of unexpected fatherhood. That’s a story for future posts though, this is just an introduction to who I am and how I got here. So if you find my story interesting and want to hear more, feel free to subscribe, and reader feedback is always welcome!

Thanks, and enjoy the show!