I once had a boss who lives in a sprawling mansion in District 10, and considered his annual high six-figure salary 'pathetic' compared to what he used to earn.
Of course, for us minions who were sitting outside his office listening to his banter, the emotions ranged from being demoralised to eye-rolling.
Yet, the emotion of 'feeling rich' is all relative.
I asked my peers this question. One corporate finance friend who is the sole bread winner of a young family said that as long as he earned what his boss was earning, he would feel rich. Conversely, another teacher friend of mine said that he is happy with what he earns but does not mind earning what his direct manager is earning (even though it's less than half of what the first friend earns).
It can also be in terms of active or passive income target, although I would argue that having a steady passive income stream of $100k than making an active income of $100k is more likely to make you feel rich (for obvious reasons of not slogging to get that $100k).
It also depends on circumstance. An individual person who is single with $200k in the bank might feel financially comfortable. But add children to the equation, and all of a sudden the question on how this $200k can sustain the rising cost of education (including hefty tuition fees and extra-curricular courses), healthcare and housing comes into play.
Alfred Marshall popularised concepts of diminishing marginal utility in his Principles of Economics (1890)
“The additional benefit a person derives from a given increase of his stock of a thing diminishes with every increase in the stock that he already has”
Research has shown that beyond a certain number, the additional increase does not make us happier. As someone who has worked for (and observed) one billionaire and two millionaires, I also honestly can't say that excessive amounts of money makes one alot happier. Yes, the ability to commute in a chauffeured Rolls Royce, or to travel in a private jet, is not open to everyone. However, the same issues of health and living a life well-lived also plaque the well-heeled. If anything, I have observed that the more wealthy one is, the more they seem to care about their health. Because indeed, once health is compromised, it is difficult to enjoy wealth. What is the point of riches if one cannot live to see the next day?
Now this brings us to the question of, what is enough? The answer to this, is just as subjective as the response to, what would make you feel rich.
I have known people who wear Manolo Blahniks and are often saying that they feel poor (mon dieau!). I have spoken to cleaning aunties and uncles (in my opinion, heroes who should be paid more) who earn a low salary in old age, and are living day to day and recipients of Workfare. I have also known people who are the epitome of financial zenness. These are the people whom I see as role models. It is because they have sorted out their finances, then they are free to truly enjoy their lives and pursue what they want to.
Til the next time!
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