One of the most important metrics that investors use when evaluating the merits of a company’s business success is the growth in earnings per share that a company has experienced or is expected to experience over a period of time. It’s become such an important measure, however, that it often gets gamed so that American companies avoid reporting a sudden drop in earnings. One method to accomplish that task: companies take on debt to repurchase stock and boost earnings per share to bolster the appearance of organic growth when none it exists.
If you’ve been reading personal finance articles for a while, you’ve probably come across the different studies that compare one’s overall sense of happiness in relation to the amount of household income that they are able to generate. You may have seen Malcolm Gladwell’s figure about how the slope of money buying happiness is the greatest around the $75,000 mark, and then money is able to buy happiness at a much slower and slower pace after that.
I never paid a whole lot of attention to those types of studies because I’ve always had the gut intuition that money is a super big deal when it comes to the basics (shelter, transportation, food, etc.) and once you have those basics covered and a little walking around money in your pocket, then the quality of your relationships with others as well as sense of personal satisfaction and accomplishment with how you are choosing to fill your days would take precedent.