Beauty is in the eye of the beholder, or so the saying goes. Believe it or not, wealth is equally subjective.
One of my big revelations in working with individuals and their finances is that no one feels wealthy. Ever. No matter how much they have. And I think I have figured out why.
It’s interesting. Wealth is often thought of as money. In that sense, wealth should be a practical tool to use for comparison purposes. If you have $2 million and I have $1 million, then you have twice as much wealth as me. Right?
Not so fast. On paper that may be true, but in real life it is often not. I have met plenty of people with a net worth of $2 million who do not feel wealthy at all. On the other hand, I have met people with less than $1 million in net worth who genuinely feel like some of the richest people on Earth.
That tells us something. It tells us that wealth is relative. It is not a line of demarcation. At best, it is shades of grey.
Years ago, the Chronicle of Philanthropy asked individuals who inherited substantial sums of money a simple question: What amount of money would you need to feel totally secure? The results were telling. The study showed that, no matter how much wealth an individual possessed, they named a number that was roughly twice what they had.
Abigail Disney, an heiress to the Disney family fortune, knows a thing or two about wealth. She has been given a lot. But she has also worked to try and prevent her wealth from rotting her from the outside in.
“If [wealth] is your primary measure of success or value in life, then good luck with that,” Disney warned in an interview last year. “Because it will never feel good.”
Wealth is far more a state of mind than a number on a page. No one feels wealthy because there is always someone with more.
Think about it this way. Bill Gates, the founder of Microsoft and the second richest person in the world with a net worth of $106 billion, cannot have all the things Jeff Bezos, the founder of Amazon.com and the richest person in the world, could buy. Bezos has $143 billion in net worth.
But even Bezos could point to John D. Rockefeller as having more money, in inflation-adjusted terms, than he does. And Rockefeller could have singled out Marcus Licinius Crassus, who was the richest person in Roman history with an estimated net worth in the trillions, as far wealthier than him.
And on and on it goes.
Fortunately, when it comes to wealth, there may be a trick to more accurately gauging your financial lot in life. Look down.
When we compare our wealth we almost always look up. In other words, we identify someone who we believe has more than us and use them as a benchmark.
But what if we did the opposite? What if every time we compare our wealth to others, we look down? We compare ourselves to others who may have less. I certainly do not mean we “look down on” others. It is not about how much they have. It is about recognizing how much we have.
And for most of us, especially in America, we have a lot.
The Credit Suisse Research Institute issued a study called the Global Wealth Report in 2018. To be in the top 10% of the richest people in the world, you needed to have $93,170 to your name. Think about that. By having just less than $100,000 to your name, 90% of the people on this planet are looking up to you as wealthier than them.
We may not feel wealthy, but most of us are.
It is simply a matter of where you look.