Inherently, money has no value at all. It is a dull, lifeless, man-made creation designed to ease the facilitation of commerce. It exists as pieces of paper, coins, or numbers on a spreadsheet or statement.
The real value of money lies in what it allows you to experience. In our society, money provides a mechanism to get the goods and services we need and want. As we continue to achieve higher success, we begin to mentally recategorize many of our wants as needs. We all know that money does not buy happiness, but that sure doesn’t stop a lot of folks from trying!
In his book, Peaks and Valleys, author Spencer Johnson describes the journey through our lives and professional careers as a series of peaks and valleys. The key to living a richer life is centered on the way you perceive and experience them. When we reach the summit, it is very easy to feel accomplished and pat ourselves on the back for the successes we have had. We often believe that a well-deserved celebration is in order after all of our hard work. However, as the celebration begins, many folks begin to look around at the new view and focus their attention on all the other people that have reached a higher summit. We are better off looking back down into the valley to remind ourselves of what got us there, and shift our focus toward remaining at the peak as long as we can.
When we reach a peak in our financial lives, the belief that one can buy happiness causes many smart and successful people to sacrifice what they truly value for stuff. This peak we are feeling is not a reflection of how much we have, but a series of strange feelings and emotions that lead to that evasive state we are searching for – happiness. We often do not recognize these feelings because they rarely occur. When they do, we rush to suppress them rather than welcome them into our lives. Instead, many folks reach the pinnacle, only peer over the top and focus on the entire range of higher peaks (the Joneses) that lie beyond it.
Inevitably, this frustration often leads to destructive financial behavior. Folks cut back on their savings to buy a bigger house or nicer car. People take their money out of their emergency funds and shove it into stocks expecting their run of fortune in the market to continue. They forget all about the discipline and hard work that got them there and soon find themselves spiraling back into the valley.
On the surface, the view from the valley is much less glamorous than the peak. People that find themselves there may have feelings of shame or regret, and they may go on a man-hunt for others to blame. Inevitably, they will ask the question, “what now?” Buried in this simple question is the existence of choice.
As you begin to look around from the valley, you notice that it is really not all bad. You notice a lot of hard-working friends and neighbors interacting with one another and working to provide the goods and services we took for granted on our way to the top. In fact, looking back up at the peak, you can’t help but notice how lonely it looks up there above the tree line. You begin to realize that as you climbed out of the valley, you left many of the things you love and value behind, but you sure miss those feelings of security and balance you felt as you reached the top.
Johnson states that “the path out of a valley appears when you choose to see things differently.” Tough times provide an opportunity for people to refocus on the things they truly value. Your next visit to a financial peak will be a much longer and more pleasant journey if you forget about the Joneses and simply bring the things you value along with you.
This article was originally published on the Financial Planning Association’s All Things Financial Planning Blog.