Hey, do you feel rich? Yes, yes, I know. It’s all relative and some people say you’re rich if you’re healthy, have a good relationship, are an integral part of the community, and help the less fortunate. I agree that you don’t have to have a ton of money to feel good about yourself, but let’s focus on money today. 😉 (This is one of those posts when I don’t have a clear idea of what to write about. Someday, I just have to start writing and see where it takes me. As I recommended in how to start a blog, you gotta stick to the schedule.) First of all, please take a poll. I’m sure everyone is curious to see how our readers feel about themselves.
Why I don’t feel rich
Back to the topic at hand. We’re doing quite well financially, but I don’t feel rich at all. Our net worth is over $2 million, but the majority of that is in our retirement accounts and real estate. We could access them if absolutely necessary, but it’s not exactly liquid like money in a savings account. Also, our monthly cash flow is actually not that great. On average, we have about $1,000 per month left over after our expenses. The expenses include saving over $50,000 in our tax-advantaged accounts, though. Anyway, the $1,000 per month extra cash doesn’t make me feel rich. That’s peanuts.
Maybe I don’t feel rich because we live a regular middle-class lifestyle. Our possessions are modest and not exactly what one would consider luxurious quality.
- We live in a modest 1,000 sq ft, 2 bed, 2 bath condo. The location and view are awesome, though.
- Our one car is a 2010 Mazda 5 minivan. The mileage is relatively low because we don’t drive much.
- There are plenty of consumer electronics in our home: 3 laptops, an Amazon Kindle tablet, 3 smart phones, a 720p flat screen TV, a DVD player, an old XBOX, a VCR (time to throw this baby out?), and two stereos.
- We eat out a few times per month.
- A lot of our things are getting old and worn out, but we don’t want to replace anything until we move into our rental. I really want a nicer dining set, but it can wait a bit. Our memory mattress is over 10 years old and it is not as comfortable as it once was. Someday…
- We rarely pay for expensive entertainment. I like free activities such as going for a walk, getting some books from the library, and enjoying free concerts in the park.
- We cook, clean, do our own laundry, and other chores. We don’t hire anything out unless it is beyond our ability.
- The one thing we spurge on regularly is international travel. We love seeing different parts of the world and experiencing other culture.
I guess our middle-class lifestyle is just too mundane. I imagine rich people lead much more exciting lives and have more helpers. They go to shows, hang out at country clubs, drive luxury cars, and have helpers to do chores for them. Sounds nice, doesn’t it?
What it would take to feel rich? I’ve been thinking about this for a few days and I think I got it. Our wealth building progression is too steady. Our net worth increases a little bit every year and life stays pretty much the same. I’m very happy with the slow and steady model, but it doesn’t make me feel rich. Previously, I imagined I would feel rich if our net worth ever reaches $5 million. However, now I seriously doubt it. I’d feel the same whether we have $4.9 million or $5 million. It’s like turning 40. Nothing really changed.
I think something that jars us out of normalcy might do the trick. For example, receiving a large windfall or winning the lotto. That would give us an immediate lift and I’d feel rich! At least for a while, anyway. Or maybe moving to another location with much lower cost of living. We could move to Thailand and our purchasing power would increase immediately. We could eat out all the time and hire people to clean and do laundry. That sounds pretty good, right? I plan to do that at some point, but just for a few years. It’d be fun and probably save us some money.
Here is a second poll. 🙂
How to feel rich
You know what? My 20 year old self would be amazed at how rich I am today. Back then, I didn’t have any of the stuff I listed above. I’m quite grateful for being where I am today. I guess I’m pretty rich after all. Sometime, you just have to step back and look at it from a different perspective.
What about you? Do you feel rich? What’s the secret? You can share anonymously in the comment if you don’t want to use your name.
Lastly, I’ll have to give credit to Financial Samurai for planting this idea virus in my head – When Do You Finally Feel Rich?. I forgot he wrote about this exact same subject about a month ago. It must have been bouncing around in the old noggin and made me write this today…
Passive income is the key to early retirement. This year, Joe is investing in commercial real estate with CrowdStreet. They have many projects across the USA so check them out!
Joe also highly recommends Personal Capital for DIY investors. They have many useful tools that will help you reach financial independence.