The Price of Happiness: Horizontal vs. Vertical Wealth

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With over 85 million books sold in a lifetime, Terry Pratchett was a millionaire many times over.
But after his Discworld books became an international phenomenon, life didn’t change for Pratchett — he just kept writing funny stories.

I like guys like Pratchett.
There’s something about them, the frugal rich. Warren Buffett lives in the same Omaha house he bought in 1968. Mark Zuckerberg got married in his backyard.
I look up to these people. But, for the longest time, I couldn’t figure out why.
I found a clue while reading A Slip of the Keyboard — a collection of Terry Pratchett’s non-fiction writings. In it, he labels two types of wealth.
The first is vertical wealth:
If you are vertically wealthy, you think “I am rich. So I had better do what rich people do.” What do rich people do? Well, they find out where the hell Gstaad is, and then they go skiing there. They buy a yacht. They may go to beaches a long way away. Well, first of all, never buy a yacht. Yachts are like tearing up hundred-pound notes while standing under a cold shower. .
The vertically wealthy rush to outshine their neighbors with better Christmas decorations, shinier cars, more handsome pool boys.
Then, they move to a richer neighborhood and start all over again.
In contrast, there is horizontally wealth:
“But horizontal wealth means not letting your increased income dictate your tastes. You like books and now you have money? Buy more books! Change those catenary bookshelves for good hardwood ones! In my case, build a library extension to your office. And, of course, you buy what will be useful for that most wonderful of pursuits, blind research, which is research without direction for the sheer joy of it.”
What happens when a horizontally wealthy person goes from $30,000 a year to $3 million?
Nothing, really.
He still drives that old Volvo. He still writes stories over home brewed coffee. He still cooks dinner with his family.
To understand it, let us go back 2000 years before Pratchett, to the great Roman philosopher Seneca — advisor to Emperor Nero and one of the wealthiest people in Rome.
Here’s an excerpt from On the Happy Life (which I wouldn’t trade for several hundred copies of modern self-help books):
Riches are slaves in the house of a wise man, but masters in that of a fool. […] If one takes away riches from the wise man, one leaves him still in possession of all that is his: for he lives happy in the present, and without fear for the future.”
Take away riches from a wise man, and he still has all that is his.
And that, my friends, is the difference. While the horizontally wealthy own their riches, the vertically wealthy are owned by them.

Are you inspired yet?
If so, let me get to my real point.
One day last year, I was walking outside. It was crisp winter morning in Thailand, skies as blue as they get. I had a nice buzzed going from a weightlifting session (new PR on deadlifts!). There was an article I was dying to write. Dinner plans in the evening…
That’s when it hit me.
I already have everything I need.
It doesn’t cost a lot to be happy. For a family of three, it can be less than $26,000 a year.
Don’t spend your life chasing numbers. Figure out how much you need, get it, and go read a book.