It doesn’t make sense at first glance, but a higher salary doesn’t actually mean that you make more money than someone else. I don’t know why you’d want to compare your own singular, idiosyncratic, irreplaceable life with anyone else’s anyway, but if you absolutely must, then we should at least get the math right.
For example, a person making $40,000 per year might actually be making more per hour than someone earning $70,000 per year. How does that work?
Well, two ways.
Both can be so insidious in that, on the surface, you’ll never see these two factors eating away at your wealth, your freedom, your happiness, your sanity, and everything else.
Before we go on, I want you to know that I am not AGAINST money. That’s ridiculous. Money is a fantastic tool that can help you buy your freedom, buy back your time, make other people happy (and yourself, too) — it just does all these incredible things. I love money!
But I also have self-respect. I don’t salivate like a f***ing dog whenever I’m given the chance to run off after more money. I know what’s it good for and what it’s not suited to do, and I’m telling you: you should take a look at the fine print.
Maybe that was harsh. But you’re “worth” more than your net worth. Much more. And once you dig a little deeper, you’ll find that there are more questions to ask before you know for sure whether that higher salary is what you actually want. Let’s ask some of them, shall we?
Schedules gone wild
A higher salary doesn’t always mean more actual income on an hourly basis. To use really simple numbers, the person who earns $100,000/year but also works 4,500 hours per year (90 hours per week, which is crazy!), actually brings home a little more than $22/hour before taxes. Before taxes.
You can play around with the variables a little bit, but I wouldn’t work 90 hours a week just to make $22/hour. It’s just not worth it. Not since there are so many other things I’d rather do than go to a job. I even found time to read 179 books last year. But the math here isn’t obvious! It’s plainly counterintuitive that more money does NOT equal more money per hour.
Compare this to someone with a $50,000/year job who works just 40 hours a week, not including vacation. Their take-home is a little above $24/hour before taxes. And that job probably comes with a LOT less stress too.
Again, it’s all about what you want for yourself. I haven’t given you any more information about either job, only that they bring home a different dollar amount every payday. To choose between them, you’re going to need a lot more information.
But, yet again, that information isn’t immediately obvious. It’s to that subject that we now turn.
Higher fixed costs
It depends on the job, of course, but usually, at least in the mainstream corporate world, higher-paying jobs come attached with a whole additional set of obligations and expectations that that real costs — fixed and variable — that you have to factor in to the equation.
Bill Perkins, the author of the excellent book Die with Zero, explains that:
“It’s all about life energy. If the $70,000 job costs you more in terms of your life energy — the cost in time of a long commute to the city, the cost of the kinds of clothes you need for this high-status job, and of course the extra hours you have to put into the job itself — then the person making the higher salary often comes out poorer in the end. This supposedly high earner also has less time left to enjoy the money he or she is earning. So when you’re comparing jobs, you really have to factor in those hidden but essential costs.”
-Bill Perkins, Die with Zero
It can be so easy to add an additional $10,000-$15,000 in expenses once you think about the cost of keeping up with the people in your professional circle. For one, you’ll need more than one or two suits, and once you pile on promotion after promotion, you’ll need to upgrade that wardrobe accordingly.
I don’t own any suits — not since the size of my shoulders exploded and the two I had didn’t fit any more. I work at home — and on my own time, on my own schedule — and there’s no one in my “office” that I have to dress to impress. I actually like the way suits fit on me (except that they don’t show my bicep veins), but it’s a cost that I simply don’t have right now. One more thing I don’t have to worry about. As Thoreau said, a man is rich in proportion to the number of things he can afford to let alone.
Then, as Bill Perkins pointed out, there are transportation costs, expenses associated with appearing at all the right events and fundraisers, bar tabs you’ll be expected to pay for, membership dues in professional organizations, subscriptions to the professional magazines, etc. It just goes on and on! Death from a thousand cuts!
If that’s what you want, fine. I know lawyers and consultants that are happy, and lawyers and consultants that are miserable. But both groups have to pay for shit that someone who holds a different position just doesn’t.
So you really have to think about whether you want the money or the freedom. I never use my freedom to buy money. It’s the other way around. Always.
One of the greatest lessons I’ve ever learned is that if you ever get jealous or envious of someone, take a look at their entire life. See if you actually want it. Because you can’t pick and choose. You may want someone else’s salary, but do you really wanna look like that person? Do you want to work as hard as they do? Do you want to have your freedom as restricted as theirs is? Not only that, maybe there’s a whole lot of shit that you don’t know about. You need more information to make an informed decision! Maybe you wouldn’t actually want that person’s life if you knew the truth.
Maybe that person just received a cancer diagnosis. Or someone they love did. Or their wife or husband hates their guts. Or they’re about to get arrested. There’s just no end to the speculation. Each sovereign individual is a universe unto themselves, completely unknowable.
Again, there’s nothing wrong with wanting to make more money. It’s a perfectly natural desire, and it’s not shameful whatsoever. Money can be a force for good — in your own life and in the lives of all the others that you can help with it. Just make sure you know what exactly you’re getting yourself into.
All the best,
P.S. Here is a reading list of 50+ books to take your life to the next level, and I’d also like to give you my Top 20 Unconventional Reading Strategies for free.