It’s a question that seems simple but is surprisingly complex. Inspired by Ben Carlson’s “Rich People Who Don’t Feel Rich” and insights from the Wall Street Journal, we’ll explore why even those earning hefty salaries might not always feel wealthy. This post delves into the psychological and environmental factors that influence our perceptions of wealth.

Wealth is Relative
Earning $400,000 annually might set you up comfortably in some places, but in high-cost cities like San Francisco or Manhattan, it might not stretch as far as you’d hope. Your financial ‘wealth’ often depends heavily on your environment and the cost of your lifestyle. Moreover, if your peers are all earning similar or higher amounts, your own substantial income might not seem exceptional at all, but rather the baseline.

Lifestyle & Spending
It’s easy to fall into the trap of increasing your spending as your income climbs. This phenomenon, known as “lifestyle creep,” can mean that despite higher earnings, you don’t necessarily feel richer. The more you earn, the more you might be tempted to spend on upscale dining, luxury cars, and bigger homes, diluting the sense that you’re actually advancing financially. Often, this leaves individuals feeling like they’re running in place, financially speaking.

The Role of Social Media
Social media platforms like Instagram can make it tough not to compare your life with those who appear to have it all. This constant exposure to curated snapshots of wealth can skew our perception of our own financial status and satisfaction. It can lead us to underestimate our own successes and magnify feelings of inadequacy, simply because we’re not on permanent vacation or flaunting designer goods daily.

Comparison – The Thief of Joy
Teddy Roosevelt’s words ring true today: “Comparison is the thief of joy.” Constantly measuring your wealth against others can diminish your happiness and satisfaction, making you feel less wealthy than you actually are. This is especially true in today’s hyper-connected world, where everyone’s highlights are on display 24/7, often giving a distorted view of their real financial situation.

Policy Implications
Income levels like $400,000 are often used in political debates to define wealth, influencing everything from tax brackets to public perceptions. Understanding how these figures are used can help demystify what it means to be considered ‘wealthy’ and reveal the complexities behind financial policies that impact us all. It also prompts a discussion about the fairness and effectiveness of these arbitrary financial thresholds.

Feeling rich isn’t just about the numbers in your bank account—it’s influenced by a mix of personal circumstances, societal pressures, and personal expectations. Recognizing these factors can help us feel more content with what we have. Ultimately, wealth is more than just money; it’s also about satisfaction and the freedom it affords us.