Sunday, March 9, 2008

How much Money does it take for you to FEEL Rich?

The first time I heard this question, it was from my ninth grade speech teacher. She asked each of us to think about what we needed to feel rich and then one by one she had us walk to the front of the class to tell everybody our answer and why we felt that way. This is one of the few impromptu public speeches that I did not dread!

Of course, we all had some dollar amount that we thought was needed. Not one student ventured into any kind of deep, introspective thinking about non-monetary life values and risked being ridiculed by the class. We all gave pretty standard answers. Some only required $5 to $20, others went as high as $100.

Why so little? As 14 year olds, we had no expenses and being in school all day we had very few items available to purchase. If I had ten bucks in my pocket, I felt rich. I could easily buy a lunch at the cafeteria, a snack after school and a soda. What more does one need in life?

From that memory, I surmised that our perception of wealth has a lot to do with a combination of three items:

  • Quantity of money in your pocket
  • Current Expenses
  • Buying opportunities

In the PF blog world we hear a lot about spending less than you earn. But that is only part of the equation. Having limited buying opportunities is another big factor in accumulating wealth.

For instance, if you are always shopping or watching TV you will be bombarded with the latest and greatest gadgets, vehicles, clothing, etc. This stuff is paraded in front of you all of the time. You can’t help but want to have some of it. It's only natural. Likewise,
if you are constantly comparing what you have to your co-worker or neighbor, you will always feel like you need more.

Obviously, it’s nearly impossible to avoid the onslaught of commercials, advertisements and neighbors. That means we have to take matters into our own hands. And the way to do that is to stop buying and admit that we have enough. We have enough stuff. We do not need to go shopping for anything more than basic necessities. Try it for one week.

Personally, I know a handful of people who have done this. They have jumped out of the rat race. Some have moved to an area with a lower cost of living. And to hear them describe it, they cherish having a simpler life, fewer choices, less items to clean and care for, and of course, more money.


  1. True, the key to amassing wealth is to living within your means and not expand your desires just because you paycheck increases.

    At a certain salary point I felt I reached the comfort zone and all additional increases were icing on the cake and went into savings/investments.

    By the way, I'm sure you already know this, buy you're going to be getting a lot of teasing at your job as well as by your friends thanks to the Governor of NY and his "liaison" who shares your name. =)

  2. I did the same thing - my living expenses have not changed much over the years, so any extra income goes straight to investments.

    Thanks for the heads up on the name thing. I have a witty reply ready!