Millionaire status is typically seen as the benchmark to consider yourself ‘rich’.
However, there is much research to suggest that past a certain level of income, more money will not make you happier.
A study by Purdue University found that once people have an income of US$95,000, having more money does not improve happiness.
People also consider themselves wealthy, or not, based on the people around them. If you earn £1,000,000 per year and live in an average income area you would feel rich compared to those around you. If you moved to an area where everyone else earnt the same, you would feel less wealthy in comparison.
Once we have enough to cover our basic needs and have financial security for ourselves and family,
Spending our money and time on purpose is what will make us feel wealthy, not just having more in the bank.
The definition of wealth does not just refer to money. Wealth is defined as having abundance in something we see as valuable.
So, if more money only gets us so far, how else can we feel wealthy?
1. Enjoy your work
We spend the majority of our time in the office. If the only reason you are in your current job is for the salary at the end of the month, this can take a huge toll on our wellbeing. Working with people you enjoy being around and for a company and occupation you feel positively about is a much richer experience than being paid well but miserable.
2. Flexible working
Technology enables people to work from anywhere. Having the option to work remotely or with flexible hours can not only improve wellbeing as workers have less commute times and are able to focus on life’s commitments. Also, it can improve productivity. If you are not restricted to a set schedule, you can work at hours when you are most efficient. Whilst this doesn’t directly add money in your pocket, it can have a positive impact on your quality of life if your job is flexible around you.
3. Make time to pursue your passions
Ask yourself, what is your money really for? Of course, it is important to know you are earning enough and saving enough to provide for our desired lifestyle in the future. But once we have that, if we are too busy earning more money to actually spend time doing the things we enjoy now, is it that extra money worth it?
Having meaningful relationships with family and friends can’t be bought. The work of Dan Buettner also found that how long we live is 90% determined by our relationships and lifestyle with only 10% being down to genetics.
5. Spend your money on things that are meaningful to you
Whether it be material objects or experiences, spend your money on things that actually mean something to you. Don’t feel you have to buy the latest luxury item just because somebody else has it.
A recent study found that from 1972-2012, regardless of income level, people’s financial satisfaction was lower if they felt they had less money than those around them and this increased their likelihood of viewing their own level of wealth as a competition with others.
Making comparisons to others is the fastest way to feel unsatisfied with your progress.
Focus on what is important to your own goals and values.
Money is important and having more undoubtedly gives you more options. More money won’t make you feel more wealthy once you get past the point that allows you to live in a way that is important to you.
Experiencing proper financial planning can help you understand what is enough to live the life you want. Once you know you have enough money and are going to be ok, you can focus on the things that really make your life feel rich. This is something we really believe in and a key part of our LifePlan discussions are about pursuing is a Better Return on Life and not just a Better Return on Investment.
Find out more about LifePlan here.