$5 Million is Nothing

One of my favorite scenes from Succession is when Cousin Greg turns on his grandfather and gets cut out of the will:

This is a Connor Roy classic: “You can’t do anything with five Greg. Five’s a nightmare. Can’t retire, not worth it to work.”

I’m sure plenty of people would sign up for $5 million to be the poorest rich person in America. And although Succession was just poking fun at the ultra-wealthy, this mindset is more prevalent than many realize.

Once you become wealthy you start to spend more money. And you hang out with people who are even wealthier than you are, so you begin to feel inadequate.

I know I have a lot of money but I still don’t feel rich.

Sure, I have a million bucks but what if I had two million instead?

I’m worth five million but I’d be a lot happier with ten million.

I’ve heard this kind of stuff from wealthy clients over the years again and again. Everyone always thinks if they just had double the amount of money they would be happy.

Money can make you comfortable. It can buy convenience and luxury. But money cannot make you content.

CNBC recently shared some survey data that backs up this idea:

Even among millionaires, only 8% would characterize themselves as wealthy these days.

Roughly 60% of investors with $1 million or more of investable assets said they are more likely upper middle class, according to a recent Ameriprise Financial survey of more than 3,000 adults.

To that point, 31% consider themselves decidedly middle class.

There are roughly 16 million American households that are worth $1 million or more. But that number includes primary residence so the number with $1 million in investable assets is much smaller. We’re probably talking something like 5% of the population.

If you have $1 million in investable assets you are not certainly not middle class or upper middle class — you’re rich!

But wait…there’s more:

Of those making more than $175,000 a year, or roughly the top 10% of tax filers, one-quarter said they were either “very poor,” “poor” or “getting by but things are tight.”

Even a share of those making more than $500,000 and $1,000,000 said the same.

Despite their high net worth, just 44% of all millionaires felt “very comfortable,” another report by Edelman Financial Engines found.

Are these people all delusional or are they just human?

In one of his final interviews before passing away, Charlie Munger was asked by CNBC’s Becky Quick about what he might have done differently in his life:

CHARLIE MUNGER: Knowing your circle of competency. Right. And that kept me away from those businesses totally. but I’m not all that pleased. I could of done a lot better if I had been a little smarter, a little quicker.

BECKY QUICK: What are you talking about? Like, you’ve had success in everything you’ve done in life. What would you like to do differently?

CHARLIE MUNGER: Well, no, but I might have had multiple trillions instead of multiple billions.

BECKY QUICK: Do you sit around thinking about this? What would you have done differently?

CHARLIE MUNGER: Yes, I do think about it. I think about it. Yes, I think about it, about what I nearly missed by being just not quite smart enough or hardworking enough.

One of my favorite quotes from Munger was, “It’s not greed that drives the world, but envy.”

It’s possible that quote came from personal experience.

Munger was worth something like $2-3 billion. He was as good as anyone at understanding human psychology, incentives and behavior. And he still couldn’t help but wonder if he could’ve been richer!

If one of the wisest minds fell prey to the trap of more what chance do we mere mortals have?

None, obviously.

If the question is: How much money do you need to be happy?

The answer is always going to be: More.

I’ve come around to the idea that this answer is fine as long as you recognize it’s the human condition. It’s just how we’re wired. There’s nothing wrong with you if this is how you feel.

That’s why contentment will always come from the parts of your life that go beyond finances.

You need family, friends, pursuits, hobbies and experiences to fill the void money never will.

Money can get you pretty far in life but it can’t get you over the finish line of fulfillment.

Michael and I talked about rich people’s relationship with money, finding enough and much more on this week’s Animal Spirits video:

Subscribe to The Compound so you never miss an episode.

Further Reading:
Careful What You Wish For

Now here’s what I’ve been reading lately:


This content, which contains security-related opinions and/or information, is provided for informational purposes only and should not be relied upon in any manner as professional advice, or an endorsement of any practices, products or services. There can be no guarantees or assurances that the views expressed here will be applicable for any particular facts or circumstances, and should not be relied upon in any manner. You should consult your own advisers as to legal, business, tax, and other related matters concerning any investment.

The commentary in this “post” (including any related blog, podcasts, videos, and social media) reflects the personal opinions, viewpoints, and analyses of the Ritholtz Wealth Management employees providing such comments, and should not be regarded the views of Ritholtz Wealth Management LLC. or its respective affiliates or as a description of advisory services provided by Ritholtz Wealth Management or performance returns of any Ritholtz Wealth Management Investments client.

References to any securities or digital assets, or performance data, are for illustrative purposes only and do not constitute an investment recommendation or offer to provide investment advisory services. Charts and graphs provided within are for informational purposes solely and should not be relied upon when making any investment decision. Past performance is not indicative of future results. The content speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others.

The Compound Media, Inc., an affiliate of Ritholtz Wealth Management, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. Investments in securities involve the risk of loss. For additional advertisement disclaimers see here: https://www.ritholtzwealth.com/advertising-disclaimers

Please see disclosures here.