Couldn’t agree more: The Golden Handcuffs.
Sometimes it feels, I don’t know, wrong to speak/write about the problems of earning too much at a job. But the idea of golden handcuffs, or indeed the Hedonic treadmill, is well worth consideration. Thoughts:
- Simply put: earning high compensation is great, as long as it comfortably exceeds living standards. Otherwise you get locked into a job which you may not like, just to pay bills which seem other-worldly.
- For example, I’ve read about families struggling on $250,000 a year or so; by the time the mortgage is paid, car payments are made, and private school tuition covered, there’s hardly enough for shopping at Whole Foods – let alone saving for retirement. That family is frankly worse-off than many families earning median income, but more accustomed to a lower living standard.
- It’s another reason to heed advice such as: continue living like a college kid when you leave school. Once the living standards expectations go up, they rarely come back down.
- Another piece of advice I would like to thank Aswath Damodoran for: when entering a high-paying career path (in my case, investment banking), live poor and save loads. The goal should be fuck you money; in this case, the ability to tell your boss – who has just told you to work another all-nighter for no good reason – exactly what he/she can do.