"It was the biggest shock in my life," said Austrian millionaire Karl Habeder, "when I realized how horrible, soulless and without feeling the five-star lifestyle is."
So he's giving away all his money. Every penny, trading in his two luxury homes for a mountain hut and a bedsit in the city. "My idea is to have nothing left. Absolutely nothing," he said. "Money is counterproductive – it prevents happiness to come."
Responses on blogs have been universally positive: "True wealth is good health. Money can't buy you happiness. etc." Which is true. Numerous studies on happiness indicate that factors like health, marriage and how we're doing in relation to our peers determine our happiness.
But am I the only person who's worried this guy has lost his mind?
Every article I've found reports how the 47-year-old Rabeder is giving away his £3 million "fortune," which, if my calculations are correct, makes him worth roughly $4.5 million. Now, on a global scale, I suppose that's a fortune, but so is owning a pair of shoes. No, what we have here is a 47-year-old European giving away his savings. Unless he's planning on dying soon, this makes me want to call Suze Orman on his behalf.
Let's look at that math: Rabeder sold his company in 2006, which, if you read between the lines, means he's unemployed. So his only income is from his net worth.
Rabeder is selling off his belongings (two houses, six gliders and an Audi A8 worth a total of approximately £2.5 million), which leaves him about $750,000. In this economy, he's lucky if he's earning 5% on that money, which keeps him just ahead of inflation. Which means, unless he goes out and gets a new job, he's got $750,000 to live on for the next forty years. Giving him an income of $18,750 a year.
I've lived on that little. And I've got news for Karl Rabeder. It did not make me happy. In fact, it made me miserable. Anyone who's had to switch the check for the gas and electric bill just to buy themselves some time knows what I'm talking about. Money can't buy you happiness, but neither can poverty.
So, yes, Karl, by all means give up your conspicuous consumption. With so little in savings to begin with, you were already living beyond your means. And I commend your philanthropy. A life of simplicity so that you can serve others is admirable.
But for God's sakes, save a little for yourself. Austria is really expensive.
Then again, what do I know? Maybe Rabeder's actions will inspire others. And when he's old and eating cat food in his mountain hut some other generous millionaire will give away his money to him.
And that, my friends, is The Upside.
Introduction to ETFs
The basics of Exchange Traded Funds and why ETFs are hot.View Course »