The Real Value of Wealth
The value of money – or more specifically wealth – is the freedom it grants you. Everything else is nonsense.
For me, that freedom is the ultimate goal of working. And paired with the relationships you build, it's the one thing that can make you truly happy.
I realize, of course, that few get to jump-start their wealth building with a high-paying career on Wall Street, let alone at Goldman Sachs like I did. Even fewer retire to become medical doctors (without amassing hundreds of thousands of dollars in student loans). I've been blessed in that regard.
But every bit of wealth you save earns you more freedom. Most of us have had a time when an unexpected bill or car repair could wreck our entire month. Building a little savings account frees you from that stress. Many of us have been stuck in a job we'd love to quit... But you've got rent to pay. Building up a bigger nest egg could allow you to job hunt full time.
There are a lot of steps to take to start on your path to financial freedom. But the first one is straightforward... You need to spend less than you earn.
If you don't save your money, you'll never get anywhere.
This isn't a matter of intelligence or study. It's a matter of discipline.
Everyone knows that saving more will build their wealth. Every January 1, you probably make a resolution to save more money this year.
Yet almost no one does it.
According to data from the Bureau of Economic Analysis, Americans only save about 4.5% of their income. That's far below 15%, which is generally accepted as the proper amount to save if you want to be prepared for emergencies and save for retirement.
Our lack of savings isn't because we're lazy or stupid.
Part of the reason we don't save is because of something called the "present bias." Present bias is when we prioritize our current desires at the expense of our long-term goals.
In other words, "I want it now."
This mindset is heavily ingrained in the human mind. And it's hard to break free.
For one, we do a bad job of understanding what will really make us happy. It's never a gadget or status symbol. We all get a little rush of satisfaction when we buy something cool – or something that makes us look cool – but a moment of honest reflection would teach us that, even 20 minutes later, the feeling is gone. And so is your money.
You should have hobbies and interests that you are willing to spend on.
For me, it's books, wine, and good meals. If you're a true gearhead, you might enjoy owning a nice car. But if you just want something with a Lexus logo to impress your friends, that's wasted money. I drove the same old Hyundai for nearly 15 years.
Everyone else is caught up in their own world, and they probably think about you a lot less than you can imagine.
We all overspend for different reasons, and you need to find the mental tricks that work for you. Some folks do well by pricing things in "hours worked" instead of dollars. Others do well by having wages directly deposited into a savings account so they never see them. Some can keep a tighter eye on things by obsessing over a detailed monthly budget.
Try all the tricks and see which one works to prevent your spending vices. Then stick to it.
Once you've got a little extra money, what should you do with it? You've got to pay off the credit cards and build up a "rainy day" account of at least three months of expenses.
Remember, no one is going to grow your savings account but you. And you're not going to do it by spending more than you earn. Show that you've earned a place in the world of adults by spending wisely.
What We're Reading...
- Did you miss it? The value of a can of Coke.
- Something different: Regularly eating fries drastically raises your diabetes risk.
Here's to our health, wealth, and a great retirement,
Dr. David Eifrig and the Health & Wealth Bulletin Research Team
August 8, 2025