Money is the basic need of every person, which is required to satisfy basic needs such as food, clothing and shelter. Lets take an example, when a person is earning 50,000 and his basic needs are satisfied with 40,000, he is happy that he is able to meet his basic needs, and is a happy person.

When the same person starts earning 100,000 then his consumption also proportionately increases. Economist call this “marginal propensity to consume”.

This gets the person into a vicious cycle where his needs starts getting into greed. His needs keeps increasing and then it become a greed.

This is the reason why you would find that people are never satisfied with money and as economist says “human wants are unlimited”

To be satisfied with the money you have, you need to keep your needs limited or have unlimited money. But even if you have unlimited money, you would never be able to satisfy the unlimited wants.

Richard Stallman – Founder of Free Software Foundation, says I don’t like expensive luxuries. he often prefers to travel by the cheapest means of travel. He also calls kids as expensive luxuries 🙂

Once you get out of the vicious cycle you start enjoying life more, rather than focusing on satisfying your basic needs you can now focus on bigger things that you always wanted to do. You are also able to dream and work towards achieving your dreams.

We often find Indians living in India are struggling with their basic needs but when the same person goes to the West, he/she is able to go beyond the basic needs. You find people writing books, becoming management gurus and achieving their goals. This doesn’t mean that the person can’t do the same in India but when you have millions of people around you which are competing to satisfy their basic needs, you get pushed into the rat race to earn more. Once you realise this, you are able to focus more on your goals rather than your basic needs.

The solution around this to keep your basic needs limited even when your income increases, this way you are not spending more, have more money than you need and money doesn’t become a concern anymore.