The best way to feel rich
By Carmel Fisher, Director
05 May, 2017
Jim Dahle is an American medical practitioner and blogger who writes under the mantle The White Coat Investor. The headline of his latest post, "Ten Ways to Feel Rich" almost put me off, as did his insistence that only those with half a million dollars should read further (unless you're rich you shouldn't worry about feeling rich — eek).
But I persevered and found some useful nuggets.
For those who don't like the word "rich" because it makes them think "filthy rich", Dahle suggested substituting "wealthy", "comfortable" or "financially independent".
His was not a blog about how to become rich but rather how to feel rich, whatever your net worth. Like Dahle, I've met people over the years who, based on their net worth and/or income, should feel rich, but somehow didn't.
His tips are commonsense but, like a lot of sensible advice, are often forgotten or overlooked.
You can't argue with his first tip — to insure against financial catastrophe.
Insurance can stop your wealth being ripped away from you; Dahle recommends disability insurance, term life insurance, professional and personal liability insurance, and of course property insurance for home and buildings.
This may be overkill but we Kiwis are not great with insurance, with Treasury estimating under-insurance across the country of some $184 billion.
According to Treasury research, up to 85 per cent of New Zealand homes are under-insured by an average of 28 per cent.
Dahle is spot on when he suggests we recognise the power of anxiety and take the time to understand our financial position, in order to not feel anxious about it.
He notes, as a physician, one-third of his patients suffer pain and discomfort due, not to a medical condition, but from anxiety.
Anxiety can undermine the sense of wealth: the downside of being rich is that you have something to lose. But the solution for anxiety is not seeking to make more money, it's dealing with your mindset.
Once you know exactly what your net assets are and your required spending level versus your desired and "enough" spending levels, you will remove a lot of stress and worry.
Dahle also advises hanging out with a "different set of Jones" and travelling internationally.
It's straightforward really; if you hang out with people not as fortunate as you, you'll feel rich. Taking yourself out of a competitive environment where you compare yourself with others will allow you to be thankful for what you've got, rather than envious of others.
When he talks about travelling internationally, Dahle wasn't suggesting visiting poor areas in order to feel wealthy. Rather, he says, simple pleasures such as trekking in Nepal, walking on a Fijian beach or exploring Peru will make you — if you're like most people — feel very wealthy, very quickly.
His final points were about giving something away — time or money — and learning to live on less than you earn.
Dahle says while giving money away is clearly not going to make you richer, it sends a subtle message to your psyche: "We have enough". That subconscious message will make you feel happier, less anxious and ultimately wealthier.
Volunteering has the same effect, as you are focusing on others rather than yourself.
One response to Dahle's blog summarised it well, in my view: Learn to live life to its fullest and appreciate that being the wealthiest person in the cemetery will not make you feel more fulfilled.