In the epilogue of Naked Economics Wheelan asks the reader “How rich is rich enough?” He goes on to say that today Americans are richer than most of the developed world, work harder, take less vacations and retire later. The “backward-bending labor supply curve” shows a situation when as real, or inflation-corrected, wages increase beyond a certain level, people will substitute leisure (non-paid time) for paid work time. Eventually our time becomes more important than the money we make while working.
When thinking about the opportunity cost of working 24/7 it brings to life the reality of families where the parents are working all the time and miss out on the majority of their children’s lives. For example, a mother who is always working might miss her child’s first steps, first soccer game, or first haircut. The opportunity cost of these parents working all the time is that they miss out on important milestones and events in their children’s lives.
If individuals often aim to maximize their utility some individuals may believe that you can never be rich enough. Therefore those types of people would believe that the best way to maximize your utility is to work long and hard your whole life in order to maximize their utility to the fullest ability.
People with sufficient wealth to meet all their needs should consider that the strategy to get rich is completely different from the strategy to stay rich. The strategy to get rich is to take risks and to focus them on one’s own business. However, the strategy to stay rich is to minimize risk, expand the risks you take and to avoid spending too much. After securing a decent retirement and some extra benefits such as travel and flexible money, there is not much more you could possibly need.
Productivity growth forces us to make choices every day. We can continue to work the same amount while producing more or we can produce the same amount by working less. Forbes magazine claims that productivity is “the most important determinant of the standard of living of a group of people, a nation or a planet.”
Psychologists have found that once you have obtained enough money to meet your basic needs like food, shelter, and health care, income and wealth have little effect on your happiness. Once you have met those requirements the good things in life, the things that are most important are either free or cheap. For example, swimming in the ocean with your friend, going to the park, reading a book, playing board games or playing with your kids doesn’t cost very much if anything.
The best things in life may be free, but the only thing missing is having the time to enjoy said things. Therefore, saving your money and investing can help you buy time, which is in turn priceless.
Forbes. Forbes Magazine, n.d. Web. 22 June 2016.
“How Rich Is Rich Enough?” Julette Millien. N.p., n.d. Web. 22 June 2016.
“Productivity and Economic Growth.” Forbes. Forbes Magazine, n.d. Web. 22 June 2016.