While travelling on the bus back from the city today, Smallsteps asked me how much someone needs to be rich. A pretty common question I suspect from kids who are starting to have a better understanding that everything costs something. However, while common, the answer isn't very simple, because while it might be possible to give a dollar amount on what that might be (for instance Smallsteps asked if a million euros is enough), the idea of "rich" is hard to define at the individual level.
It led to an interesting discussion (for a nine year old) to consider what rich means in terms of life value, with us discussing what it means to have enough. I kicked off the conversation on how different people see money, where for instance, a person with one million euros would be considered rich, but another person with ten million euros might not consider themselves rich, and even a failure. Imagine if Musk was suddenly worth ten million dollars, which would be plenty for the vast majority of people in the world, but for him, he would consider himself a pauper.
And then it was about what kinds of things money can buy, and what people feel brings value to their lives in terms of an apartment, relationships or the ability to do what you want. And then, what you want, is also going to be dictated by how much money you have, because it creates an anchor. Like some people will be happy with a simple car, another with a supercar, another with a jet. But, most people probably wouldn't spend everything they have to satisfy their happiness on an item like a car. If a person has two million dollars, they probably won't spend it all on a two million supercar - they will make concessions. Instead, they will find their happiness in less, perhaps spending 100K on a car instead, and justifying their lower spend as happiness inducing.
Rich can be affected by many factors, and much of it lays outside of any particular dollar amount. Instead, it depends on a persons references to access opportunities they consider richness. It might be as simple as being able to go to dinner at a nice restaurant monthly without it breaking the bank for some people, or to buy the desired equipment and supplies for a particular hobby.
As we were talking and walking together, I sketched a scenario where we had to sell and didn't live in a house and instead had a small apartment. We would have to get rid of most of the things we have, and we would be far more cramped for space daily. Yet, in many ways, it would also improve our living conditions, because we would have less cleaning to do, less overheads, and probably spend more time together instead of each doing maintenance work. In some ways, we would be richer, in some ways, we would be poorer.
We can look at the "rich" of a country as being the top 10%, with the top 1% being very wealthy and the top 0.1% extremely wealthy. And while people can argue that "money doesn't make you happy", the fact of the world is that most of us want to do things that require money to do, whether that be eat good quality food, or travel, or buy our kids a toy they would enjoy. Sure, for most of us, we are pretty limited in our desires, but there are still financial needs, and they are getting harder and harder to meet, the more those wealth gaps keep growing. So, people have to keep lowering their expectations on what is going to make them happy, while wealth at the top becomes more extreme. It is pretty pathetic, really.
Whenever this kind of conversation comes up, a lot of people "auto-respond" with some kind of pithy saying about money not buying love or happiness, or whatever. But, it never really satisfies me as an answer, because at a practical level, that hasn't been my full experience. Not having enough money is hard, and it can become problematic in order to maintain good relationships when it is always driven by compromise and going without. Some people manage this well, many will not, but there is always going to be a variation on the spectrum on how people behave, and feel about themselves, especially if no matter how hard they try, they keep failing to provide for those they care about.
we might not need much to be happy, but we all need something and it just doesn't work in the current world we have been conditioned to be part of in particular ways, to say "be happy with less" when it is always becoming less. We are collectors at heart, and the weight of loss weighs twice that of gain, so when we are continually forced into losing, happiness and contentment can be difficult to accomplish, in the moment, or in the future.
At the end of the day, regardless of what happens throughout our life, the only thing we can really claim is our own, is our character. And the thing with character is, it has to hold up under pressure, otherwise, it is not character, it is just an act.
Acting rich, doesn't make it so.
What is your number?
Taraz
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Well, for me, money does buy happiness. If anyone doubts this, they should give up all their wealth and watch how complicated and sad their lives would become. I assume that what people actually want to say when using the phrase: 'money can't buy happiness', is that money can't buy hundred percent happiness. Because you can be rich and still be sad. The money itself can make you happy, but another incident in your life comes and reduces the joy of having money or in some cases, cancels it altogether.
If it didn't work for Buddha, suspect it won't work for most of us.
Mate, a million euro would do us fine. Where do I sign up?
I wonder if there is a study where they will give me a million to see if it affects my mood.
Well that was a hard question indeed. I do remember having the same conversation with my sons. The problem is that people, in general, connect the word "rich" to money or wealth.
So I ask them if you have all the money in the world but no friends at all, would you consider yourself rich? Or would you prefer to have enough money to life without problems and have lots of friends?
Who of the 2 above is the richest?
But indeed it is hard to express in a value. And like you said everybody would give a different number. But for me you are rich, when you do have options or can making choices in life.
I feel today, a lot of younger people undervalue the value of friends and family, because they spend too much time behind screens. The problem is, at some point, the screen isn't enough and by then it might be too late to build the "social richness" that they crave.
Well my number for being rich is anything 6,000,000 USD+
I would allocate these assets the following way:
3,000,000 - Income Producing Investments
2,000,000 - Home
1,000,000 - Everything Else
In addition to that 6 million USD net worth this assumes 0 debt and other income such as salary or business that it is 200K USD+ per year.
That is naturally applicable to Seattle area in other areas home value could be less, etc.
And yes I do get your point that you don't need a huge house or fancy car, but the scenario above is what it takes to not feel the need and live fairly modestly in Seattle area.
Would that be modest living there? Here, that is pretty extreme!
Well, considering that $1,780,000 buys you this in our bearish real estate market:
https://www.zillow.com/homedetails/2965-74th-Ave-SE-Mercer-Island-WA-98040/48956099_zpid/
That home will not make me feel rich...
Now this is for the real rich:
https://www.zillow.com/homedetails/Mercer-Island-WA-98040/454120449_zpid/
And this is for the obscenely rich:
https://www.zillow.com/homedetails/Bellevue-WA-98004/453391962_zpid/
https://www.zillow.com/homedetails/Seattle-WA-98112/455353390_zpid/
My needs are few, but having enough money to fund them along with a few luxuries and not have to work more than I want would be my personal benchmark for "rich." I'm nowhere near there and may never be.
You are similar to me in this regard. Enough to fund a decent, normal life, with a few little luxuries along the way, without the stress of having to constantly grind to make it happen.
Yeah...$1Million would do it for me.
Smallsteps really following her father's critical thinking footsteps, isn't she?...🙂
I am not sure if anyone should follow me! :D
I just checked hive price. It seems that I am less rich once again...a bit depressing. I wish that hive price would drop only when I would have funds to buy more Hive. I just powered up some on 13 day. So the price should be growing now...
Did you end up buying some?
I bought some and powered up 800 on 13 day. I also bought some maxed out splinterlands cards. these days I am only playing in frontier format. Knowing my luck it is unlikely but I would love to win one of those black cards that are worth few hundreds dollars.😛 Chances are slim but still greater than before- I am in gold 1 league. So I am getting 6-9 tickets a day.
Answer your daughter simply: A person is rich if their investments generate income equivalent to several paychecks. Most poor people live on one salary.
I think you might have missed the point.
Such a thoughtful read! Being “rich” really depends on how we define enough. 💭
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STOPYou explained well. If I have ten million euros, I may feel I’ve made it in life but Elon Musk falling back to such amount may be a disaster to him.
Money may not buy happiness but may serve as a source of joy. Let’s take for example, what will make me happy now? I would love to go to Santorini with my family. How do we get there? Money of course but we do not have the money which has hindered us from deriving the happiness that we deserve.
Then, if I’m to explain rich in my own way, I’d say it is the ability to be able to provide the basic needs for one’s family and extra. What are the extras? The vacations, travels and all because I’ve got to learn that many people find it difficult to satisfy their needs even without talking about the extras
Although money cannot buy everything, as many people say, money is something that people must have. If we have more money, we can increase our needs. We can also limit our needs by managing that money. The definition of wealth varies from person to person. Although people with more assets buy luxury goods and live a luxurious life, when they earn more, they chase after more unlimited needs. There is no stopping here. A person with moderate assets, including money, can be rich.
It is true that being rich is often more about your mindset than just the numbers in your bank account. Being able to enjoy life without worrying too much is rather important to me, as life is short :)
She is very curious about the matter of being rich. Your explanations are excellent. Because you have explained it very well and I like your words because it depends on the person to consider himself rich. However, in most of our societies, if someone has a certain amount of money, we call that person rich. Nowadays, every person dreams of becoming rich and having children is no exception because they dream of such things from their family or friends or environment. However, I think there is something exceptional that if we do not consider being rich in terms of money, but if we consider all our mental, physical and financial aspects and if a person is satisfied in all aspects, then he is truly rich.