Financial Wellbeing By Dan Ariely And Gallup

1018 Words 5 Pages
1. Dan Ariely and Chapter 3 - Financial Wellbeing (Gallup) make a similar point about relativity when it comes to our salaries and material possessions. Explain this point then discuss how this relates to a person's ability to build wealth over time.

Both Dan Ariely and Chapter 3 in Financial Wellbeing make a similar point about what relativity has to do with personal salaries and material possessions. In both sources it shows how when people are give two options such as “making $50,000 while those around you make $25,000” or “making $100,000 while those around you make $200,000” people will choose the first option over the second even though they would be making less money. This is because people compare their financial well being to others
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He shows through data and research that the majority of millionaires aren't people with fancy cars two houses and a nice boats but rather those who are frugal with their money. Sure they may look like millionaire with their fancy things but with the high spending of money they become more quickly broke. If you want to become a millionaire on an 80,000 a year paycheck you have to be frugal and live below your means. This may sound dumb because why would someone who makes so much want to live below their means wouldnt that make them less happy not using the money they have. Research proves the opposite though. If a frugal spender lives in a neighborhood that is “poorer” than what they are able to live in it can actually make them happier because in relativity to their peers they are better off. There is also a correlation between wealth and health. When you aren't spending extra money on going out to restaurants, buying extra snacks, and purchasing alcohol you will save money and increase your health. These three things ( not buying overpriced things to look wealthy, living below your means, and using health to save money) can be applied to my life as a young adult. Because even though I probably won't be able to become a millionaire while paying off student loans it will keep me from going too far in debt by learning what I can do to be frugal and save …show more content…
Based on all the materials posted in the Week 8 and Week 9 modules, what conclusions did you draw about the importance of frugality and contentment in ones' life? After going through all of the materials I have found that it is very important to be frugal in order to be content with my life and to get the most out of my money. It came almost as a shock to me how millionares spend their money and they way they live their lives. I think it was such a shock because of how millionares are portrayed on TV. It amazes me how the happiest wealthy people are ones who spend their money on other and keep a well budgeted plan, rather than the wealthy who spend on extra things for themselves. I learned that you don’t have to have a huge income to become wealthy if you are frugal with your money and live below your means. This means that wealth is not limited to those with 6 figure incomes. I also learned there are so many small things that you can do to save up money and get the most bang for your buck. If I automatically put away money and only spend it on the things I need it won't be hard to slowly but surely build up money. This frugality will overall help me feel more secure and content in my financial

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