People often meet with me to discuss money topics. How to invest their hard-saved dollars. How to eliminate debt. How to plan for retirement. How to handle Social Security.
I love talking about these things. It’s what I do. But those money topics miss an important point. They fail to address the biggest issue of all. Without addressing that issue, my advice may be helpful but not nearly as valuable.
Perhaps the best way to illustrate what I mean is through a story about one of the world’s richest families in America. The story starts in 1805.
A boy, bright and diligent, drops out of school at the age of 11. Living near Staten Island, the boy decides working on the waterfront can help his family more than understanding algebra. His job was demanding. But he was hard-working and enjoyed the challenge.
At the tender age of 16 – while his friends were still in high school – he convinced his parents to lend him money to buy a boat. It wasn’t for leisure, though. He used it to transport passengers between Staten Island and New York City.
The venture was successful, and the young man was a good saver. He used his earnings to purchase more boats. Soon, he was moving people and goods all across the Hudson River and nearby bays.
By 1818, he set his sights on something bigger. He sold his boats and took a job operating steamships. It wasn’t long before he started his own steamship company and grew it – some say ruthlessly – over the next two decades. By 1846, he was a millionaire.
With money and confidence, he turned his attention to a new way of moving people and goods. By rail. He used his wealth to buy railroads in and around New York. He became the first operator to connect New York City and Chicago. By the time he died, he was worth $100 million. In today’s dollars, that would be nearly $5 billion.
Who was this man? None other than Cornelius “Commodore” Vanderbilt.
His fortune was principally left to one son – William, the oldest of 13 children. Through William, we can understand the biggest money issue I see – the point so many people miss when talking about wealth.
William said it best in testimony he gave to the U.S. Senate in 1895.
Speaking of a neighbor, William explained to the senators, “He isn’t worth a hundredth part as much as I am. But he has more of the real pleasures of life than I have.” Fistfulls of money, William clarified, is not nearly as beneficial as they first may seem.
William said his neighbor’s house was just as comfortable as his – although not as costly. His neighbor watched the same operas as him – although in more modest seats. In fact, his neighbor’s health was better than his – despite William’s ability to afford the best medical care of the time.
The fact is that wealth should not be a goal in life. William Vanderbilt said exactly that, as perhaps your mother, father or grandmother have told you in the past.
You may have a thousand times the wealth of your neighbor, but wealth does not allow you to enjoy food or drink a thousand times more than them. It does not allow you to enjoy the beauty of nature a thousand times more than them. It does not allow you to feel the warmth of love or reduce the pain of loss a thousand times more than them.
Wealth should not be the goal. Your goals should be the goal. Wealth is simply a tool.
To build a table, a carpenter must have a saw in the woodshop. The goal isn’t to have the biggest or most expensive saw. The goal is to craft a quality table. The saw, like wealth, is just a tool to achieve the ultimate objective.
What are your goals in life? How much wealth do you need to attain them? Those are the real questions you should be asking yourself.