How To Lead a Rich Life

You're rich.
Well, at least well-off. I am certain of this, because the average reader of this magazine has a household income of $119,000, which puts him or her in the upper segment of the richest society in the history of the world. Maybe you don't fall into that core group. Maybe you're scanning this article in the waiting room of a doctor's office, and your household income is bit less (or much more) than that. Either way, relatively speaking, you're rich. Not filthy rich, but better-off than almost everyone else on the planet.

Yet -- and I am certain of this too -- you don't feel rich (or even well-off). Money doesn't buy what it used to. A million bucks seems more like a living wage than a small fortune. Millionaires are a dime a dozen: There are nearly 5 million households in America with a net worth of at least $1 million. Even Joe Millionaire, reality TV's latest must-see phenom, needs a faux fortune of $50 million to impress the ladies. For the average Joe, a garden-suburb mortgage, private-school tuition, an SUV in the garage, and spring break in Vail can make a six-figure salary feel like almost nothing.

Meanwhile, it's impossible to escape the barrage of images of the Rich Life, Supersized for the American Century. Even post bust and mid-recession, Bentleys, which start at $200,000, are sell-outs; Vertu cell phones cost almost $20,000; and Johnnie Walker has introduced the $180-a-bottle Blue label (as if the Red and Black labels weren't luxurious enough), which sells for as much as $700 a bottle in clubs. And this is what passes as scaling back for tough times: The $52,000 H2 Hummer urban-assault vehicle (a bargain compared to the $116,000 H1 model) is flying off of dealers' lots.

The desire for more is the most powerful drive in our culture. It's in the DNA of democracy and at the heart of the American Dream: Every person gets an equal chance to make it, and it's our responsibility to take it. Of late, that drive has produced an ethnography of excess -- books such as Juliet Schor's The Overspent American, Robert Frank's Luxury Fever, and even Eric Schlosser's Fast Food Nation. These accounts of the rich and spendthrift point to one big question: What does all that income and spending add up to? A lot of nothing, it turns out. One of the more shocking measures of our "prosperity" is the fact that the United States spends more on trash bags than 90 other countries spend on everything. In other words, the receptacles of our waste cost more than all of the goods consumed by nearly half of the world's nations.

The cost of our wealth to other societies and the environment has been well documented. But the greatest toll might be on ourselves. Between 1970 and 1999, the average American family received a 16% raise (adjusted for inflation), while the percentage of people who described themselves as "very happy" fell from 36% to 29%. We are better paid, better fed, and better educated than ever. Yet the divorce rate has doubled, the teen-suicide rate has tripled, and depression has soared in the past 30 years. The conclusion is inescapable: Our lifestyles are packed with more stuff, but we lead emptier lives. We're consuming more but enjoying it less.

Surely we're rich enough to feel better than this. So what's missing? It might help to revisit that threadbare but forever-relevant question, Does money buy happiness? You'd be hard-pressed to find someone who's willing to argue publicly that it does (although few would give up the chance to find out for themselves). The real story is that all signs point to the reverse: Happiness may help you get rich. In study after study, doing work that you love and having a great marriage and a fulfilling family life are all correlated with financial wealth. The tricky part is that you can't "get" happiness (sorry, Thomas Jefferson) by pursuing it. Put your eye on that prize, and you set yourself on the treadmill of ever-escalating aspirations. We think that we'll be happy when: when we get a better job, when we get more money, when we fall in love. But then, as Samuel Johnson put it, "Life is a progress from want to want, not from enjoyment to enjoyment."

Change your frame of reference, though -- focus on the real prize -- and leading a rich life is surprisingly cheap and highly accessible. The most serious obstacle to achieving it is ourselves. What follows, then, is a values-driven guide to mastering the money issue -- revised and updated for a poor economy. It is informed by cutting-edge insights from the new "economics of happiness," three decades of research on the defining values of America's new leadership class and the state of the American dream, and a comprehensive portrait of the highly effective habits of the truly wealthy. To be sure, this guide has more than its fair share of philosophy. But it also has formulas to measure success, questions to reshape your priorities, and tactics to steer your actions. It won't provide can't-miss investment strategies for your 401(k). But it may help you invest in something even more valuable.