Mark Twain on Relative Wealth

Morgan Housel (0:06)

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Before investing, consider the fund's investment objectives, risks, charges, and expenses. Visit statestreet.com/im for a prospectus containing this and other information. Read it carefully. All right, welcome back. I'm writing a book right now on financial independence. And while doing the research from that, I come across some things that I think are so interesting that I'd never really seen before. One is I was watching a documentary on minimalism. People who take so much pride in having few possessions, and they can live off of basically nothing, and they live in tiny little places with like no furniture, and they own one shirt, that kind of thing. They could afford more, but they love the minimalism. And on one hand, it's always phrased as these people have escaped materialism. And I think to some extent, that's true. But they are obsessed with what they don't own. They're obsessed with their lack of possessions. And it hit me that like being obsessed with a lack of things that you own is another form of just being obsessed with those things. These people who have apparently escaped materialism think about materialism all day long. They are obsessed with the things that they don't own. And that is just another form of thinking about things all day. And what's that long term, there's a quote that's been around forever, like the opposite of love is not hate, it's indifference.

And these people who are addicted to minimalism hated material items, which meant they were thinking about it all the time. But the real opposite of love is indifference. People who have, I think, figured it out and have the healthiest relationship with their things don't think about it. They don't think about their things all day. They're too busy enjoying the rest of their life with their hobbies that they want to do and their friends and their family. They're not obsessed with their items. That was one thing I came across recently. The other is there's a chapter in this book I'm writing about Mark Twain who is such a fascinating individual because he was the most famous and successful writer of his day, wealthiest writer of his day, and he married a very rich heiress. And so they had incredible sums of money.

They could have lived the easiest, most carefree life that could have existed, and yet they went bankrupt and lost a house that they were living in. And Mark Twain had to go on this world tour, giving lectures that he didn't want to do. He was just trying to pay off all the debts that he accumulated. It's a fascinating scenario of someone who had so much and ended up with so little. What's very interesting about Mark Twain in many aspects is that he was among the best in the world, potentially among the best of all time, at identifying other people's flaws.

And he could point out where other people with things like money were making mistakes and where their flawed thinking was, and yet he seemed blind to his own faults.

And a lot of the things that he would criticize others for, he was making that same mistake for himself, but he didn't even know it and would not admit it to other people. I came across this Twain quote, and like everything else he writes, I think it's just brilliant. He says, Since $100 million in New York City and 22 fishhooks on the border of the Arctic Circle represent the same financial supremacy, a man in strained circumstances is a fool to stay in New York when he can buy 10 cents of fishhooks and emigrate.

So he's saying like, Look, being filthy rich in New York City feels the same as being a good fisherman in the Arctic. What matters for both is not how much you have. It's how much you have relative to other people. And since there are so many wealthy people in New York, you can have a ton of money and not feel wealthy. But if you were just merely good at surviving in the middle of nowhere, you're the richest man in town. He said this like in the 1880s. So maybe $100 million is now $100 billion or something like that. But I think there's a lot of truth here that there are two ways to feel poor in life. One is to have too little, particularly for the basics that you need.