marginal utility of money

Something our boss said this morning hit home more than I care to admit. He said the marginal utility of money is very small, much smaller than we give it credit for. When you've earned enough to cover your basic necessities, the quest for additional money just to keep up with the luxuries of life is often where you get into trouble. Definitely, when you are in need of money, because you cannot cover the basic needs of you and your family, then money is at its most use (and of most importance) to you. Then you crave more, to cover life's little luxuries, which I guess is still okay. After all, what differentiates life from existence is quality. And certain aspects of a quality life do require some measure of money. For example, travel is life-enriching but is also a rather expensive hobby. Education is another, though basic education would mean getting educated here whereas "luxury education" would mean a foreign degree or even an additional degree like an MBA. You would also need a cushion to cover a rainy day (or days, as last week proved to be), especially when you have aging parents or many dependents or simply just for your sanity. In Manila too, a car is almost a necessity, as is the occasional movie and dinner date to destress.

However, after you've checked those marks, and you crave more money, you'll find this incremental moolah to deliver way less than what the earlier amounts did, at least in terms of satisfaction and happiness. In fact, you'll discover that what you need to sacrifice, in the name of this additional money, may cost you more than the benefits to be derived by the possession of these incremental pesos. Such examples are time with your family, your health, your spiritual life, or simply just your life. In the quest for more money, you run faster and faster on the hamster wheel, only to end up not being able to enjoy the very money for which you exerted that much effort for. Worse, after earning so much money, you find yourself dying due to the stress of the quest.

So I guess the point is to continually reflect and evaluate the "point" in everything we do, including everything we sacrifice. There's obviously a tradeoff, and the reward that you're working for may or may not end up to be as satisfying as it appeared to be in your head.

Definitely, at this age, my husband and I are still very much justified to stay in the rat race. After all, we don't have children yet, and I've heard children tend to cost a substantial amount of money. Plus, we do have dreams yet to be achieved, before we can say we've had enough of our work. But it's good to see this perspective from a 50-year-old marketing veteran and learn that, after a certain point, you really don't need "more" anymore. Life is not about that at all. What's tricky is knowing where to draw the line and keep your sights at it, no matter the temptation (whether in your head or through people around you). Hopefully, you'll also be brave enough to get off the horse when you need to, in recognition of better things to allocate your time, effort and attention for, even if these things do not appear in a bank statement or chequebook. Unlike in the corporate world, achievements in life are not supposed to be in numerical format.

:)

building a pipeline or hauling buckets

I stumbled upon this story from a blog of a friend and wanted to post it here so I won't forget it. I feel it can be related to many things in life, most obviously to the ever-lingering idea of setting up my own business vs staying in this corporate rat race forever. Read on!

Are you building a pipeline or hauling buckets?

A village in Africa needed water, so they gave 2 people, Bill and Ed, the contract to supply it, reasoning that the competition would keep prices reasonable and the service good. Bill immediately ran out, bought to buckets, and started making the trek to and from the lake, which was a mile away. He started making money immediately, which was great, especially as Ed disappeared from the village. The downside was that he had to get up before everybody else to make sure that the village had the water, and his work was very tiring, as he spent his whole day carrying buckets of water.

Several months later, Ed returned with a construction crew, and built a stainless steel pipe from the lake to the village. Once it was ready, he announced that he would charge 75% less for his water than Bill, that his water would be cleaner than Bill’s, because it would be covered the whole way, and that it would run 24/7, unlike Bill’s, because Bill didn’t work on weekends.

When Bill saw everybody run to the new faucet at the end of Ed’s pipeline, he dropped his prices by 75%, bought covers for his buckets, and employed his sons to work night and weekend shifts. Once his sons had left for college (and inexplicably never returned), he had to hire more workers to cover their costs, and spent his days dealing with accounting and labor issues.

Ed saw the success of his pipeline in this village, and went on to build them in several other villages as well, earning only pennies on every bucket delivered, but delivering millions of buckets a day. He oversees his business from a beach in Hawaii, as the water flows whether he is working or not.

THE END

The story ends with this advice: don’t spend your days working for money when you could be designing systems to have money flowing to, and working for you. But I feel that it can be related to so many more things other than money. Are you sacrificing long-term gains for short-term contentment? Are you missing the bigger picture in the quest to have something solid now? Are you building a pipeline or hauling buckets?!

"Not much to look forward to this year"...

Some of my friends said this at the top of the year, especially in the context of 2010 being a action-packed, exciting year for all of us, peppered with memories of weddings and babies. I couldn’t relate to this feeling at first, since we had our Europe trip (of the decade!) in the pipeline during that period. I was too busy looking up itineraries, comparing hotels, preparing flight schedules, etc, to feel that there’s not much to look forward to. My heart was so full of excitement and happy anticipation. Now that that has peaked and we’re back to regular life, I can’t help but agree with the statement now. Especially given the recent work challenges, which either pull me to the direction of feeling work is so humdrum, or haul me back to the other direction of feeling overwhelmed and tired by this new assignment. Granted, the resurrection of my teaching career does put an exclamation point to my weekly sched, and my MBA does keep me extra busy, but I don’t know, I feel like something is off. Or, better said, something seems dissatisfying. I can’t quite pinpoint what it is exactly. All I know is what it is NOT about – I’m 100% happy with my marriage and 100% happy with my personal and student-related lives. I have a sneaking suspicion it’s about work.. and about my impatience with the next stage in life.

There's no solid point to this post. I just wanted to jot down this feeling, in hopes of untangling the mixed emotions and finding the center of it all. I'll let you know if it worked...

Not this time :(

Erased my last post about crossing fingers for good news this month because, well, the good news didn't come. I would be lying if I said we're not disappointed. Frankly, the feeling resembles heartbreak way too closely- and I doubt we can be faulted. The signs all pointed there, and I can be sure that while some may arguably just reside in the place in my heart that really wants it to come true, the other signs were so real they really had us fooled :(

Oh well, no use agonizing. We can always try again.

And let it be said that I have the best husband in the world. Hope every girl out there finds someone as devoted and as loving, to be with in good times and sad :(