Aristotle was exactly right, but it seems as if we haven’t really learned his lesson in the more than 2000 years since he was around.
Lets be clear, money is a token. Green paper does not have any value in and of itself, it is simply a medium between us and the things we want.
Now this is obvious and most people would consider it common sense, but this study called Medium Maximization found that we value the tokens (money) just like we value the things the tokens get us.
The researchers did an experiment to test what effect, if any, tokens would have on the decision making process of participants:
The researchers set up a situation similar to one that a lot of people have probably experienced. They gave people the option of two rewards, and reward #2 was only slightly better than reward #1, but the tokens needed to achieve reward #2 were significantly more than the tokens needed to achieve reward #1. The researchers found that the significantly larger amount of tokens available for reward #2 actually helped convince people to take it instead of reward #1.
This is very similar to a situation most of us encounter in the job world. Most of us would gladly take a job that required a lot more effort and rewarded us with a lot more tokens (money), despite the fact that our happiness level would probably increase very little. In fact, spending all that time and effort collecting tokens might even distract us from the things that make us happy, which would make us less happy in the end.
So the research shows that we are, unfortunately, naturally inclined to want to collect money, regardless of whether or not we know what to do with that money when we get it. And our society reinforces this inclination: we are lead to believe we need to collect money, and to a certain extent we do. We need it because it is between us and the things we want, not simply because it is worth collecting.
The lesson here is that you must set goals and put your money to work.
Don’t collect money because it seems like the right thing to do, rather set goals for your money. What are the things you want? What are the experiences you want to have? Make enough money to get those things and then get them!
Further Reading:
- Medium Maximization (pdf) by Christopher K Hsee, Fang Yu, Jiao Zhang, and Yan Zhang
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