Would You Rather…

A million-dollar lifestyle or a million dollars in the bank

When I was in high school I had a friend who was obsessed with “Would you rather…” questions.

He was always coming up with crazy scenarios and proposing them to us. I would arrive at 3rd-period Physics class and sit down at my desk, and he would say “Ben, would you rather lose your toenails permanently or spend three hours in a fish tank full of worms?”

Usually, the choices were always bad things.

But the ones I found more intriguing were the choices involving good things, like, “Would you rather have an extra month for summer vacation or spend a whole day hanging out with Michael Jordan?”

It was fun, because there are basically an endless number of these kinds of questions – and they always make you stop and think.

“Would You Rather…” Applied to Personal Finance

So lately I was thinking (for no apparent reason) that it would be interesting to apply this type of question to personal finance. I tried to think of a really good “Would you rather…” question that would relate to the things we discuss about money, debt, and achieving financial freedom.

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And I came up with a great question. Here it is: “Would you rather live a million-dollar lifestyle or have a million dollars in the bank?

When I say “a million-dollar lifestyle” I mean exactly that: a style of living that costs one million dollars (at least) per year – whether that means partying in expensive nightclubs, traveling to exotic lands, purchasing fancy cars, redecorating your home, whatever it may be.

On the other hand, you have the option of a relatively normal lifestyle but with the satisfaction of being able to stroll over to an ATM, print out your bank account balance, and see a 7-digit number.

Both options sound nice. Which would you choose?

It’s actually a complicated question, and I think it brings up some excellent points with regard to managing your finances. I’m curious to hear your opinions in the comments, but first, here’s how I look at it…

For Most People, These Two Are Mutually Exclusive

This might be controversial, but I think it’s nearly impossible to have both a million-dollar lifestyle and have a million dollars in the bank.

Now, I understand that some people have both. So yes, it’s technically possible. But given the fact that sometimes people go broke even after being paid millions of dollars per year, I’d say it’s quite rare to achieve both.

I believe that’s because the two outcomes are at odds with each other. In order to achieve a million-dollar lifestyle, you have to spend a million dollars. And in order to achieve a million-dollar bank account, you have to save a million dollars.

While you may have a stream of income flowing in every month, if you’re spending it on a million-dollar lifestyle then it is not getting deposited into your bank account (for long).

I’m sure some of you loyal readers are all ready to point out that you can achieve a very happy and enjoyable lifestyle by living simply, and I agree. But that’s not the question here. The question is which of these two very concrete scenarios appeals more to you.

How This Applies to You

As you think about which scenario appeals more, ask yourself why? Why would you like the million-dollar lifestyle more than the million-dollar bank account (or vice versa)?

My hunch is that the answer will tell you a lot about your own hopes and dreams, as well as your disposition when it comes to money.

Believe it or not, this “Would you rather…” question actually applies to all of us. For example, if you make $50,000 per year in salary, you’re constantly making decisions about your lifestyle and your finances based upon that income.

There is an inherent tradeoff between the present and the future, so everyday you’re making subtle choices about whether to use that $50,000 now or later. Just like in the million-dollar example, you can’t save it and spend it. You have to make a choice.

Which are you choosing right now?

The Right Answer

Despite the sub-heading above, there is no right answer – at least according to me. The wise path financially, and one that would probably be recommended by most personal finance bloggers, is to save your money now and invest it so that you can eventually have enough of a nest egg or financial cushion to live the kind of life you want. (Dave Ramsey famously says, “live like no one else now, so later you can live like no one else”)

While I believe that is a wise path to take, it doesn’t mean it’s right for everyone. Maybe you’d rather travel the world while you’re young without accruing any savings and then live a simple and inexpensive life when you’re older. It’s your life, after all.

I think it’s true that you have to determine what it is you value and then make your decisions accordingly. Just remember, you probably can’t live a million-dollar lifestyle and have a million dollars in the bank too. I think life just doesn’t tend to work that way.

What do you think?

Image credit: warrengoldswain

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  • For me this one is easy…million dollars in the bank! I was living my million dollar (okay, thousand dollar) lifestyle when I got myself into debt, and it ended up feeling horrible! Plus, paring down made me realize what’s important in life – family, friends, good experiences, spending all the time you can with loved ones before it’s too late.

    • I agree, Jennifer! The best course of action is find a lifestyle that allows you to enjoy all those real things in your life while saving money and growing that bank account.

  • Marigold

    What an intriguing way to get us to look at our desires and values. But it might be possible to go with both impulses, i.e. choose champagne but drive a 10 year old car.