Ten Ways to Feel Rich


Today’s Saturday Selection from The White Coat Investor describes a number of ways for you to feel like a rich person, even if you’re one yet.

Going through the list, I can check just about every box. I could probably add a few items, too. “Rich” means different things to different people, but in this case, the good doctor is referring to material wealth.

Try a few of these tips to feel rich and eventually, you’ll probably end up actually being rich. This post was originally published on The White Coat Investor.


 

As I write this (back in December of 2016) I have been thinking about “feeling rich” lately. (I know, I know, nobody likes the word “rich” because it reminds people of the phrase “filthy rich.” Substitute “wealthy”, “comfortable”, or “financially independent” as you see fit if it makes you feel better.) Stephen Nelson got me thinking about it at first, which his excellent Thanksgiving blog post (which was apparently somehow inspired by something I wrote.) He pointed out that:

But to me, the really interesting element of Dr. Dahle’s essay is not that he’s become rich through hard work and intelligence, common sense and good luck. No, the interesting part to me is that Dahle feels rich.

 

 

He feels wealthy.

What’s weird about that? Well, a couple of things. Many people with high incomes and impressive net worth don’t feel rich or wealthy. Even though they are. And then often people with high income or high wealth feel (mostly) stressed. Or financially insecure. Or like runners in a rat race.

Dahle, to his great credit doesn’t feel this way. And with an eye toward the Thanksgiving holiday, I’d like to suggest three reasons why I think this is maybe the case.

Then, I got to experience these “many people” myself on a Bogleheads forum thread. It starts with the original poster stating:

I’m 53 years old, have ~$8 Million in various mutual funds, stocks, ETFs, bond funds. House is almost paid off with no plans to move. Three kids to put through college. Living in the San Francisco Bay area in a house valued at about $4 Million, and all this does not make us feel wealthy with a net worth over $14 Million (including a rental house). We live a simple lifestyle with no expensive vacations or large expenses.

set for lifeAs if that wasn’t bad enough, one of the replies said this:

I have a net worth of over $30 Million ($9 Million real estate and $21 Million stocks/bonds/cash) and no debt. I’m 51 years old and I would like to retire but I am not yet confident in doing it…. I’m not sure its enough.

I couldn’t resist leaving a reply to each of them, hopefully taken in the spirit in which it was intended. I hope you can see why the way they feel is nutso. If not, this post is for you. There is a lot of truth in the axiom that “Rich is always twice what you have.” I’ve found that to be true in my life and I bet you have too. So, assuming we are rich, what can we do to feel rich? Let’s make a list.

 

Ten Ways to Feel Rich

 

# 1 Get Rich

 

Well, the first thing you need to do before you can feel rich is to get rich. There are a lot of well-meaning folks out there who say “rich is a state of mind,” “we’re all rich compared to the starving refugees,” and the like. That’s all true of course, but if you’re a reader of this blog with a net worth of $50,000, I think you would be well-served to NOT feel rich, because your financial situation is actually rather precarious, even if that puts you in the richest 1% of people who have ever lived.

So the first thing you probably ought to do to feel rich is to get rich. Even Mr. Money Mustache, one of our generation’s most hyper-frugal folks, waited until he had a high six-figure portfolio before declaring himself financially independent. I think that’s a pretty good benchmark for our society. If you haven’t hit a net worth of half a million yet, I think you probably ought to get there before worrying about feeling rich.

 

# 2 Insure Against Financial Catastrophe

 

Wealth can be ripped away from you very quickly in certain situations. You can insure against many of these situations pretty easily and inexpensively. So make sure you do so by purchasing disability insurance, term life insurance, professional liability insurance, personal liability insurance, and property insurance for your expensive property. Minimizing (I suppose you can never truly eliminate) it can help you to feel richer.

# 3 Recognize the Power of Anxiety

 

Despite not going into psychiatry, I might be an expert in anxiety. I would guess that fully 1/3 of my clinical paycheck comes from anxiety. I see an endless parade of patients with nothing serious causing their chest pain, abdominal pain, headache, dyspnea, paralysis etc.

The mind-body connection is very real and very powerful. We should all be in awe of it. We should also realize that we are not immune to its effects. Consider the $30 million guy above. He WANTS to retire. He has enough to retire in an amazingly comfortable way in any city in the world (although of course perhaps not every neighborhood in the world.) Sure, he doesn’t have his own airport and jet, yet he doesn’t have the confidence that he has enough.

Now, I suppose it is possible he just has an incredibly high burn rate, but more likely, there is some anxiety at play here. One huge downside of becoming rich is that you have something to lose.

The homeless dude on the corner has nothing to lose. He’s not worried about creditors, a house burning down, not being able to work, or burning through his nest egg by age 80. But the solution to anxiety isn’t accumulating more money. That just makes you the richest guy in the graveyard. Hearses don’t have trailer hitches.

 

# 4 Know Where You Stand

 

One thing that will help you to feel wealthier is to know where you are actually at. Knowing your net worth, your required spending level, your desired spending level, and your “enough” level, and having some sort of plan to arrive at that level removes a great deal of worry and anxiety. Lots of people are anxious about their financial situation and should be because they have no plan.

 


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# 5 Hang Out With a Different Set of Joneses

 

We are social creatures. We cannot but help comparing ourselves to those around us. That includes at work, at church, with social groups, with family members, and in our neighborhoods.

Thus it is with feeling rich — if you are richer than most of those you are around, you will feel rich. If you are poorer than most, you will feel poor.

Buying the least expensive home in a nice neighborhood might be good to maximize real estate appreciation, but it is also likely to lead you to feeling poor. It might not feel entirely comfortable being around those with less income and less net worth than you, but I can guarantee it will make you feel wealthier!

If your friends take vacations to the local state park and you can go to Belize once a year, you’ll feel wealthy. If your friends vacation four times a year in Europe, your trip to Belize isn’t going to seem very glamorous in comparison. If $14 million doesn’t feel like “enough” in Silicon Valley, move to Reno and buy ten houses similar to yours in Silicon Valley.

 

Dahle Family Tubing

keeping up with the dahles

 

# 6 Give Money Away

 

You didn’t become wealthy by frittering away money. Mathematically, giving away money, even to a qualified charity, isn’t going to make you any richer. You might get 45 cents off your taxes for every dollar you donate, but you’ll still come out behind. However, there is a subtle message you are sending to your psyche when you give away money — “We have enough.” That subconscious message will permeate your life and cause you to be happier, feel less anxious, and feel wealthier.

 

# 7 Live On Much Less Than You Earn

 

bankofamericaAnother great way my wife and I have discovered to feel rich is to live on much less than you earn. As our income has grown to that of the average physician, to that of the average specialist, and beyond, we have saved more and more money and given away more and more money.

Are we spending more of that extra income? Sure, but there is still a monstrous (and increasing, even after our much higher tax bill) gap between what we are earning and what we are spending. That gap provides a lot of financial security and makes us feel wealthier. If you are living paycheck to paycheck (as many high-income professionals do) it’s pretty tough to feel rich.

 

# 8 Limit Fixed Expenses

 

Another behavioral trick we’ve used is to limit fixed expenses. Mathematically, the best way to maximize your net worth is to maximally leverage your life — always borrowing whenever possible at low rates and investing the difference at higher rates.

However, when you have all that debt to service, it increases your fixed expenses. We are not afraid to blow ridiculous amounts of money on one time purchases and trips, but when we add on a recurring expense, it gets hawk-like scrutiny. Like living on much less than you earn, having very limited fixed expenses allows you to dramatically downsize your spending in the event of income loss or other economic event without going hungry.

 

# 9 Volunteer

 

Like giving money away, volunteering your time helps you to focus on others, rather than yourself. When you’re trying to figure out ways to help others, you’re not worrying about your own problems. Happiness studies are very clear that volunteering your time makes you happier. Plus, when you volunteer you are generally working with people who have much less than you do (not only because most people have much less than you do, but volunteer organizations tend to serve the most unfortunate.)

 

# 10 Travel Internationally

 

There is nothing so useful to reset your perspective as traveling internationally. While it is nice to see Rome and Paris, that’s not what I’m talking about. Go trek in Nepal, hike to Mayan ruins in Guatemala, walk on a beach in Fiji, and explore Peru. If you are like most, you will feel very wealthy, very quickly.

Hopefully, these tips will help you to feel more wealthy, whether you have “enough” yet or not.

 

 

What do you think?  Do you feel rich? Why or why not? What have you done to help you feel rich? Comment below!

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24 comments

  • Net worth of $30 million and doesn’t think it’s enough? I think that person has some serious issues to deal with..

    From my observation #5 is one of the bigger factors for most. Comparison is such an evil thing.

    • There will always be a larger jet, more luxurious mansion, and a more secluded private island. Best to learn to be happy with what you’ve got.

      Cheers!
      -Pof

      • CM

        That reminded me of something I once read about Barry Diller and his need for a Gulfstream IV:

        ” … these jets still bring out the instincts that boys have about the size of their toys. The acquisition of such an aircraft clearly marks some sort of ineffable status on the part of the acquirer. One source, explaining the motive behind Barry Diller’s lust to take over Paramount last year, told a reporter, ”You want to know what the interactive revolution is really all about? David Geffen has a G IV and Barry Diller doesn’t. Barry wants one.” Diller does have a G II, but, of course, it’s older and smaller.”

        http://archive.fortune.com/magazines/fortune/fortune_archive/1994/05/30/79345/index.htm

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  • What a great list. If a person is worth $10-30 million dollars and does not feel rich, the issue is between their ears. Having more money will not change how they feel. You have provided a comprehensive list to help anyone get their mind right who has fallen into this mental trap.

  • I was asked in an interview, “What is the biggest problem you have faced in your retirement?” The answer was “Feeling like I had enough.” I can look at the figures on the paper and know that I have enough to last my lifetime and then some. But I still wonder if that is really true. John D. Rockefeller was at one time the richest man in the world and he was asked, “How much is enough?” His reply was, “Just a little bit more.”

    If the richest man in the world didn’t think he had enough, I guess it’s shouldn’t be surprising for me to have those feelings as well. We will never be sure we have enough, because we will never know what the future will have in store for us. Learning to be content with what we have is a great start towards feeling like we have enough. Which I suppose is what feeling like we a rich really means.

    I am rich. I have been rich for a long time. But sometimes my brain just didn’t get the memo. Before I finally pulled the trigger to retire, my wife had to keep reminding me that we had enough. Our financial future is secure. For some reason, she can see this better than I can. The concept of “enough” is difficult to get into your brain. This article gives a few good steps toward the goal of feeling like we have enough. Once we cross the finish line, we can stop running.

    I devoted the last chapter of my book, “The Doctors Guide to Eliminating Debt,” to the concept of identifying your finish line. Unless you know exactly where the finish line is, you will never be sure you have won the race. You will just keep running and running and running and running. Eventually you will become the richest man in the graveyard, yet you may never think you have won the game.

    Dr. Cory S. Fawcett
    Prescription for Financial Success

    • I hope you truly do have enough, because I believe your net worth is nearly double ours and I’m on the brink of following you into early retirement!

      The finish line for us is now based on a particular date rather than a particular dollar amount, since we surpassed the latter a while back.

      Cheers!
      -PoF

  • We just moved into the least expensive house in a country club neighborhood, and I completely agree with the assessment that it’s hard to feel rich when you look around at all the fancy cars and pools. But I keep reminding myself that we have a high net worth, and the people with the fancy cars may not! It’s hard to be counter culture with spending, so we may need to do more international trips and volunteering to counteract the Keeping Up with the Neighborhood Joneses phenomenon!

    • We’ve tended to do the opposite — have one of the nicest places is a more modest neighborhood. I recall reading years ago that doing so made people feel happier. It’s all relative.

      Of course, what we’ve done isn’t the smartest money move, but it’s not all about money. It’s about how you feel, right?

      Cheers!
      -PoF

  • I read an article recently that stated the neighbors of lottery winners have a higher bankruptcy rate. Seems keeping up with the Joneses is not financially healthy. Learn contentment and you will learn to feel rich.

    Dr. Cory S. Fawcett
    Prescription for Financial Success

    • I just read that yesterday. They focused on small lotto winners — the type of winnings that wouldn’t make the news or be obvious, but would be enough to buy a new boat, car or camper. And when they did, their neighbors followed suit.

      Fascinating.

  • Great list. I especially like the parts about donation and travel.

    That being said these days I feel wealthy. Our belongings are probably mid to lower representative of the community. But I know enough about my area to know I’m on the upper end of income and networth. So I don’t worry about it. Knowledge of that helps I guess.

    I believe not comparing is impossible so I try to force my comparisons to average. That’s usually enough for me.

  • Andrea Chakravarti

    I feel rich when I go to the grocery store and can buy anything I want.

  • There are some people out there with mentality they they never can have enough. It’s a borderline mental disorder to be honest. Reminds me of Getty who at one time was the richest man in the world and he lost family and friends because it wasn’t enough. He even went so far as to have a pay phone installed in his home so friends didn’t run up a phone bill.

    Comparing with others will always be the downfall and make you unhappy. It doesn’t even have to be about money.

    There will always be someone richer, smarter, more athletic (very easy to do in my case), etc. Even with an enjoyable activity such as blogging for me can turn badly if I try to see why others have more comments, or more page views, etc. It’s easy to create competition out of nothing. Some competition is good because it drives you. But if you become obsessed it will be your downfall

    • Hightower

      Totally agree. And this is a big reason why I deleted my facebook and instagram accounts a long time ago. I’m much happier when I’m slightly ignorant to what everyone else is doing. Pretty much everything I want to accomplish in my life someone else has already accomplished and done a much better job then I could ever do, so it’s best not to pay attention to that fact too much. Instead, it’s better to remind yourself that you’ve already done a lot better than many people ever will do and they likely look at you as the successful one.

  • Hightower

    I agree with the bit about travel to help you feel rich. If you truly can afford it, taking a few nice trips a year to somewhere fairly exotic, even Hawaii, can really make you feel good about your standing. In contrast, vacationing in those places before you are wealthy can make you feel like you’re not being frugal enough. Before I started getting my financial life in order, my wife and I did a lot of traveling, not always to exotic spots, but Europe and Hawaii multiple times for sure. I now feel less inclined to book those vacations because I realize I need to build some wealth to be able to truly enjoy myself there.

  • Good list, Doc. I was really caught of guard at the over abundance of positive feelings I got from getting live insurance. I feel at ease. A burden was lifted. I travel (for work) with peace of mind. Best $40 I spend each month.

    Also, is that pic Lake Powell? When Powell is done right it’s is a top 5 vacation spot for me. Love that place.

  • Mark Dias

    Number 5 I can relate to. We go to Mexico and I speak Spanish. We don’t go to the places where the tourists go. When we eat at the restaurants I love giving good tips. To see the smiles on the waitresses faces is priceless. Tipping them is like paying their salary for the whole day. And that is when I feel wealthy. I told my children don’t worry about winning the lottery, you won the lottery by being born in the United States

  • Great post PoF. A lot of what your saying here is about managing our expectations. They can always be moved up, but it’s hard to feel happy when they’re shifted back down.

    A simple meal can be the greatest treasure on earth to a starving man, but to a wealthy man used to find dining it might be bland and flavorless.

    I’d rather have the pocketbook of the wealthy man, but the expectations of the starving man.

  • Funny stuff! Hard not to feel rich if you’re healthy and employed in ‘merica.
    Feeling rich is such an odd concept. Rich with money and means? I suppose for me that means the ability to do what I want, when I want. Recently traveled to Switzerland to celebrate a friend’s birthday (friend lives there). Used bonus miles to fly, and got to crash at friends. So maybe you could add number 11 – make friends with people you expect to move back overseas, so you can visit them and see the world for cheap.

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  • I have been working on “feeling rich” for the past few years, as I’m getting close to retirement (I’ll probably retire in 2–4 more years). I mused about why I don’t feel rich a few years ago:
    https://gasstationwithoutpumps.wordpress.com/2015/11/27/why-dont-i-feel-rich/

  • Yoma

    Great article.

    I feel rich already at 40. Had to be a stay at home parent due to circumstances even though very well qualified. My(and my husband’s) needs are very small and wants are even smaller.

    I don’t care who drives a Lamborghini around, I am happy with my SUV that I paid cash for.

    I don’t care who has a multi million dollar home, I am content in my 260K home that is decent and clean!

    If I don’t feel the need for something, I will never buy it to impress others.

    I am on Facebook and don’t get an ounce of self pity/insecurity/inferiority complex if I see someone traveling all the time. I take two -week long vacations a year and very happy with it and DON’T even post it on FB.

    We save 50+% of my husband’s high income. If I can get 5% dividends on my investments(getting close to it now), I am rich for life without even touching the principal.

    But you make a very good point on disability insurance, and I think an umbrella policy to add to it should cover us. By God’s grace IF we are healthy in our old age, we have got it all.

    The 30M$ networth person feeling low is just because his wants are BIGGER……

    So, not only do I feel rich, I feel content too. I give away a lot of money to people and don’t even worry about it not giving me a tax deduction.

    Sorry rambled away….but my thoughts had to come out. All these thoughts could be there because I am an immigrant and reached where I am in 19 years living in this great country on one income. Also, have felt financially very insecure in my teenage years because of my parents’ financially irresponsible behavior…and vowed to never take on any debt..

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