Is Wealth a Number or State of Mind?

Is Wealth a Number or State of Mind? I don’t consider myself wealthy but I am financially free enough to retire early and live life on my terms. A little while back the US Government enacted some tax increases on those it considered as the top 2% of earners and pegged the low-end of wealth at $250K for a couple. Even more tax increases were enacted for those in the $400K income range and above. But is that a true measure of wealth?

As I have always said, It’s not what you earn it’s what you keep that matters. People who make a lot of money but have high debt and an undisciplined spending habit won’t be feeling wealthy. Certainly the government has put a number to wealth but the number itself can’t be a true measure of wealth.

Is Wealth a Number or State of Mind: How do I define wealth?

I suppose I define it like many people do. Having an abundance of valuables, money, etc. but in the back of mind it’s always those millionaires and billionaires I read and hear about. The rich and famous, movie and rock stars, the big money CEOs and Wall Street movers and shakers.

So subconsciously I too have a soft number that I associate to wealth. I really never gave it much thought until today other than I never think of myself as wealthy. However something happened to make me think I was wrong and that I am actually wealthy. Wow, I said it out loud as I typed it here and it feels pretty darn good.

Financial Freedom Wealth Through Frugal Living is at Odds With What We Equate to Wealth

Is Wealth a Number or State of Mind

I think what caused me and I am sure others who are working toward financial freedom or those who are financially free to not consider themselves as wealthy is we tend to live a frugal lifestyle. We don’t make the big bucks and the only way to get to this point is we cut spending, payoff all debt, and increase our savings rate.

The less we need to spend to live our choice lifestyle the less it takes to pay for it. The flaw that I and I am sure others out there in my same situation have mistakenly embraced is that we compare ourselves to those who we subconsciously equate to wealthy and we are nowhere in the same ball park.

That is a mistake because wealth can’t just be a number. Wealth must be a state of mind. Once I realized that I can live life on my own terms where my needs are financially covered by my portfolio and I could pursue opportunities of passion I should have also realized I just became wealthy.

Wealth is Having All That You Need and Really Want

It has nothing to do with how much my account has in it. It has to do with the fact that I have enough to be content with what I do have. Once I reached the point where I didn’t feel like I was deprived of wants and needs I was wealthy. Once I could focus on what really made me happy like family instead of serving a heartless corporate monster and career I was wealthy.

Now there are a lot of people who have far nicer homes, cars, vacations, you name it, than I do but they aren’t necessarily wealthy. If they are enslaved by their money and lifestyle costs then they can never reach a wealth state of mind. That is far worse than my living a wealthy and free life and not being aware that I was wealthy. Wealth is YOUR state of mind and can’t be something you compare to others.

She Said I was a very rich man

So what happened today to make me ask myself is Wealth a Number or State of Mind? I had a conversation with a nice woman who moved here from Armenia. I have never met anyone from Armenia before and we talked about our families, how I just returned from a vacation with my daughter’s family including a 2 and a half year-old, where we have lived and traveled and want to travel. Just life stuff.

At no time did she ask or did we discuss our occupations or my work or early retirement status. She then asked me how many grandchildren I had and I told her 4 with another coming in December. She looked at me and said, you are a very rich man. Initially I was taken back and then I thought for a second, yes, yes I am.

How about you. Do you consider yourself wealthy when looking at where you are in your life and your financial freedom status? Or do you think there really is a number before you can consider yourself wealthy?

12 thoughts on “Is Wealth a Number or State of Mind?

  1. I know I’m not there yet. Any number I pick, I’m pretty sure will get bigger when I get closer. I think we think of wealth as more of a relational number. Wealthy people have more than me. Poor people have less than me. I know my FI number, but wealth needs a better definition before me before I’d be able to give it a good number.

    1. Hello CheapMom and and thanks for the comment. I think we struggle with the concept of wealth even once we do reach FI because we weren’t born into it. Also as we make gains on our way to FI frugally we don’t parade it out there for all to see. All of my concepts of wealth have been the rich and famous. I think getting past comparing what others would consider my meager wealth and low cost lifestyle to those I perceived as wealthy is what caused me to redefine what wealth is. I recall hearing somewhere that wealth is measured by how long you could retire and not have to go back to work. I like that. My new Armenian friend defined wealth as having an abundance of loving family. I like that too.

  2. Although we haven’t reach our “comfort” number yet in order to become financially independent, we’re well on our way. I feel extremely wealthy in the life I live and the amazing people that I call family and friends. As I wrote in a prior post, money, for me, is no longer the leading measure of living a successful life and I firmly believe that – it took me a long time to come to this point though!

    1. Thanks for the comment Kassandra. You are absolutely right, money shouldn’t be the leading measure of our success. Everything we do consider valuable to us and have in abundance in our lives doesn’t require comparison to others to gauge how blessed and rich we truly are.

  3. I’m reminded of Mr Micawber’s famous, and oft-quoted, recipe for happiness:

    “Annual income twenty pounds, annual expenditure nineteen [pounds] nineteen [shillings] and six [pence], result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.”

    ― Charles Dickens, David Copperfield

    Nothing made as much difference to our sense of feeling “well off” than arranging our finances so that we saved first, spent later, and avoided debt. When you spend what you’ve earned and saved, it’s a feeling of power. When you spend before you earn, you can feel the shackles tightening.

    And yes, there is much more to wealth than material possessions. To quote again, “What is a cynic? A man who knows the price of everything and the value of nothing.”

    ― Oscar Wilde, Lady Windermere’s Fan

    All that is necessary to experience wealth is to know the value of everything you already have.

  4. I certainly feel wealthy when I think of my Grandson, so I’m with you there, Tommy. But, as I said on Kassandra’s post, I don’t feel I’m ready to say I’m wealthy until I no longer have to work anymore. Then I will feel rich beyond measure! And if I choose to work, because I enjoy it, then I will be truly blessed.

    1. Hi debt debs and thanks for your comment. I certainly relate to what you say. I was just there a few years ago and what you say about not having to work and being able to choose to work you enjoy as being a blessing is absolutely right. I just had never equated that blessed condition of being financially capable to work or not work while living somewhat frugally on our meager budget as also being wealthy until this recent re-evaluation of my thinking.

  5. I get what you are saying. If I have enough to pay for my frugal $30,000 year cost of living and I don’t have to go to work to get it I should feel wealthy even though my wealth is a small number compared to whomever I normally think of as wealthy. I am not there yet but I can agree that I could think of myself like that when I do get there. I sure wouldn’t expect anyone else to consider me rich and wealthy.

    1. Hi Franklin and thanks for commenting. That is pretty much my point. I don’t think we should compare our financial status to others nor care if they do so with us. It’s my state of mind that matters.

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