How to Determine If You Are Rich
I'll start off with a disclaimer - this post is not intended to be a debate on whether or not one is wealthy. Nor is it intended to attack the wealth of others. This is merely meant as a reminder that, while we can never know exactly what a person's material wealth is, we can measure our own level of financial success in other ways.
What we have discovered over the last few years (as outlined in the previous post) is that there are multiple factors that contribute to feeling rich; and that these factors are largely independent of income. We have also found that most people do not realize how many external factors affect their level of wealth, or lack thereof.
After discussing these concepts with some friends who had achieved varying levels of financial success, I realized something important: Once my friend David reached his goal last year (and was able to stop working), he didn't feel rich anymore . . . until he got back into investing and started trading stocks again. Once David was able to make more money because he started trading again, he felt richer than ever!
This fact really blew me away - and now I'm going to try and share this information with you before you make your plans for 2023 - or perhaps even before you decide whether or not you should get into the stock market at all!
- A Realistic Perspective on Wealth The ultimate synonym for happiness?
- Understanding the true meaning of rich
- Remembering that there's no such thing as a free lunch
- Remembering that there's always someone ahead of you on the ladder and someone behind you!
- Comparing your lifestyle to those in a lower income bracket than you
- Measuring your wealth in assets rather than income
- Feeling the need to constantly compare yourself to others
- People are rich if they feel like they are rich
A Realistic Perspective on Wealth The ultimate synonym for happiness?
Takeaway: It's okay if you don't feel like being rich this year! Understanding why your existing spending habits will influence your feelings of wealth.
Understanding the true meaning of rich
Understanding the true meaning of rich
Rich people possess three important traits: money, assets, and mindset. Money is a quantifiable measure of wealth and is supported by assets like a house or car. You can think of it as a tool used to accumulate more assets.
However, having lots of money without any real purpose or intention will not make you feel rich; it will only cause you stress and anxiety because you have so much responsibility upon yourself. Therefore, being rich also requires understanding what it means to be wealthy in your own life; this includes knowing how much money is enough for those things that are most important to you.
Remembering that there's no such thing as a free lunch
It’s time to take a long, hard look at what you have.
In order to achieve true wealth, you need to look at all of your assets and make sure they are worth the cost.
This means that if you have a house, it needs to be paid for in full. If not, then it’s not yours—it’s just an asset for someone else who can take it away from you at any moment.
You should also consider whether or not the cars in your garage are truly “yours” if they haven't been paid off yet (and even then there may be loans on them). The same thing goes for any clothes or other things bought on credit: They might as well belong to someone else because they'll disappear when their payments come due.
Remembering that there's always someone ahead of you on the ladder and someone behind you!
A lot of people make the mistake of comparing themselves to others and feeling bad if they're not as successful or rich as their neighbor, coworker or friend. The problem is that everyone's life is different—everyone has unique interests, skills and personality traits. So how can you tell if you're rich? You need to look at your own achievements.
What do you do for fun? Do you have lots of friends? Do people tell you that they're proud of what you've accomplished in life? Are there things about which other people admire or envy your skill level (for example, are there skills that other kids asked for help from)? Remembering that there's always someone ahead of me on the ladder . . . and someone behind me!
Comparing your lifestyle to those in a lower income bracket than you
- If you are a millionaire, but your net worth is only $1 million and your friends are millionaires with a net worth of $10 million, then you may not be rich.
- If your net worth is one tenth of what someone in your income bracket has, then you may not be rich.
- If your net worth is one tenth of what someone in the same age bracket as you has, then it's possible that you're not rich.
- If being rich means being wealthy relative to others in the same gender group as yourself (for example men compared to other men), then comparing yourself with another man will tell if he has more money than you do or whether he's just wealthier than average for his gender group
Measuring your wealth in assets rather than income
The most important thing to know is that an asset is anything you own that has value. A house, a car and even your skill set are all assets. Income is the money you earn from working—it's important but not as permanent as having something like a house or patent.
If you're looking to be rich, it's best to measure yourself in terms of assets rather than income because when it comes down to it, assets are more stable than income. Unlike wealth measurement based on net worth (which includes liabilities), measuring your wealth by assets may help shield you from volatile changes in the market value of your investments.
It also makes sense: You don't have to worry about making payments on an asset once you own it; its price won't change unless there's some kind of catastrophic event affecting all similar items at once (like a natural disaster).
In addition, because most people have greater flexibility over their time than their finances do, those who can take advantage of liquidation opportunities (selling off certain items) will benefit from doing so—especially if they use proceeds wisely!
Feeling the need to constantly compare yourself to others
"If you want to determine if you are rich, ask yourself if you feel rich. If the answer is yes, then you are rich."
There it is! The magic formula for determining whether or not your lifestyle qualifies as wealthy or not. But wait: how can this be? After all, it seems obvious that there are many ways to measure wealth (in terms of income and net worth) which do not rely on subjective feelings of personal well-being. Surely those things must matter in some way—right?
It turns out that yes, they do matter—but only in a limited capacity. In fact, researchers have found that more objective measurements such as income and net worth aren't nearly as important as people might think when determining if they're "better off" than others. Instead, social comparisons play a bigger role in our feelings about our relative status compared to other groups of people around us.*
People are rich if they feel like they are rich
- You're rich if you feel like you are rich.
- The measure of your wealth is not in the amount of money you earn, but in what you have and what your assets are worth. A person with a $100,000 salary who has no savings or investments is not as wealthy as someone earning $30,000 per year who has managed to save half their income for retirement. They may be able to buy more things with their lower income but they are just as poor because they do not have enough savings or investments to help them maintain a comfortable lifestyle when they reach retirement age. The rich don't necessarily make more money than others; rather it's how much they have left after all expenses that determines whether or not they're actually rich or simply well-to-do (which many consider themselves).
- If someone else has something better than yours, then it doesn't necessarily mean that either one of them is "richer" than the other person - unless both sets can afford those things simultaneously without having any negative impact on their lives at all times during which such items/material goods were present within their possession.. It's important remember this fact before making any assumptions based on appearances alone!
In the end, it all comes down to how you feel. If you’re happy with your level of wealth and feel that it’s enough for your needs, then there’s no reason to compare yourself to others. If you find yourself constantly comparing yourself to others or feeling the need for more money than what you have in order to be happy with life—then perhaps it may be time for a change!
Leave a Reply