Good fortune tends to come to those who save and invest over a long period of time. However, sometimes your good fortune goes beyond expectations. In such scenarios, you may experience money guilt.
Money guilt arises when you don't feel like you deserve your good fortune. With literally eight billion people in the world, why do you get to have the job you have and make the money you do? Or why did you get to buy Uber during the seed round and now be hailed as an investing genius for the rest of your life?
Maybe you don't deserve your good fortune. But given there is an endless amount of money to make in this world, maybe you should enjoy it anyway. For if you don't make the money, someone else will.
Two Somewhat Unexpected Financial Positives
The reason why I'm writing this post is because I'm feeling more fortunate than normal. Like most of you, I've seen my stock portfolio rebound after a bear market in 2022. Losing a lot of money on paper never feels good.
But this stock portfolio rebound doesn't feel deserved. No effort was involved in seeing my portfolio claw its way back up. When you've done little to nothing to make money, you may feel guilty. Ironically, a lack of effort is why dividend-paying stocks are one of the top passive income investments.
The second win is seeing luxury home prices go down in San Francisco. When I bought our existing home in 2020, I had a strong feeling it wouldn't end up being our forever home. I mainly wanted a fully remodeled place to stay during the pandemic given our previous place was under construction.
Depending on the home price segment, prices are down between 5% – 20% in San Francisco. The higher priced homes are down the most partly because nobody really needs a 9th bathroom or a 10th bedroom. Conversely, home prices near the median are only marginally down as more people can afford them.
Last year, I would have paid 18% more for the home I'm in contract to buy today. The only problem was last year I didn't have enough funds to purchase it.
Back then, I was so serious about buying the home I was even willing to jeopardize a relationship by borrowing money from a friend. To owe money to friends feels awkward.
A 20%+ rebound in my stock portfolio and an 18% decline in the price of the home I want to buy feels like double good fortune! The problem is that the double win also feels like a fantasy.
How To Counteract Feeling Bad About Good Fortune
While all I'm hearing from the media is how unaffordable housing prices are due to high mortgage rates and low inventory, I'm also wondering, “What about our higher investment portfolios and higher net worths? What about also being able to buy at lower prices? Are people not also invested in funny money stocks?”
Maybe not. So in a way, I feel bad because shopping for homes with little competition feels great. It's like taking a first grade spelling test as an adult. Am I really going to be able to fulfill my objective of buying the nicest home I can afford when my kids are living with us? Heck yeah!
If mortgage rates ever go back down, homebuyers who buy today can refinance and avoid bidding wars in the future. That's a nice call option. I've invested in real estate for over 20 years and when the market heats up, prices rebound quickly. I don’t want to buy in a frenzy market.
To counteract feeling bad about my good fortune, I decided to write as many new posts as possible to help others. In other words, I wrote more to overcome the guilt for not having worked hard to merit my situation. And you know what? I feel less guilty as a result.
Hard Work Is Key To Eliminating Money Guilt
Let's say you're a trust fund child or a nepo baby who has done little to nothing to earn your wealth. The Bank of Mom & Dad have bought you everything you ever asked for, even as an adult.
If you're feeling guilty about your situation, then one solution is to go to work by creating a trust fund job. It's the best way to feel like you are contributing to society.
If you can take your work a step further by doing work that helps others increase their good fortune, then even better! By working hard to spread the wealth, your money guilt will melt away as you are bringing others up as well.
Another way to eliminate feeling bad about your good fortune is to volunteer as much of your time as possible to helping others. The more you can directly help the people who need the most help, the better.
Giving money away is another way of reducing your money guilt. However, it won't be as effective as volunteering because you're giving away money you didn't earn in the first place. Hence, you're just finding yourself back at neutral.
For me, it's easy to help people. I have the Financial Samurai platform and readers can subscribe to my newsletter without a paywall. Listeners can also subscribe to my podcast on Apple and Spotify for free too. I share what I learn in hopes of helping others achieve financial freedom sooner.
Don't Forget The Work You Put In Already
If you're not a trust fund child or nepo baby, then don't forget all your previous hard work. After a while, it's easy to forget all the sacrifices we made to build above-average wealth.
Here are some examples:
- Delayed having kids to focus on your career, which resulted in a more difficult time having kids later
- Worked 70 hours a week for five years so you could come up with a downpayment to buy your house
- Took on side hustles for 10 hours a week in order to go on nice vacations with your family
- Studied three hours a night in high school and five hours a night in college to achieve magna cum laude
- Woke up at 5 am every morning for three years to work on your passion project
- Volunteered every month for three years at a foster care center
- Went out of your way to mentor and help people in need due to intrinsic motivation
The more you can help others, the more good fortune you will receive. It is a virtuous cycle that keeps growing over time. Some call this good karma.
On the other hand, if you are always thinking about yourself first, then life might not be as kind. If you are born with good fortune and great wealth, but do nothing to help others, then you will likely feel guilty.
Don't Forget Bad Fortune Always Comes Around Too
Finally, it's important to realize good fortune doesn't last forever. Eventually, something bad will happen and you will curse your bad luck. When that time comes, be appreciative of the good fortune you had earlier.
In my case, I'm assuming with a 70% chance the home I plan to buy will keep going down in price after I purchase. Real estate, after all, takes years to find a plateau once prices start declining. I also expect to deal with random issues like leaks from rainstorms and broken appliances in the future.
Therefore, whenever I'm feeling especially fortunate, I remind myself that this too shall pass. I don't want to get too excited about anything because things are always changing. At the same time, I try not to get too down when there is a terrible event. Because that too will pass.
The parable of the Chinese farmer illustrates my point wonderfully.
Parable Of The Chinese Farmer
A farmer and his son had a beloved horse that helped the family earn a living. One day, the horse ran away and their neighbors exclaimed, “Your horse ran away, what terrible luck!” The farmer replied, “Maybe so, maybe not.”
A few days later, the horse returned home, leading a few wild horses back to the farm as well. The neighbors shouted out, “Your horse has returned, and brought several horses home with him. What great luck!” The farmer replied, “Maybe so, maybe not.”
Later that week, the farmer’s son was trying to break one of the horses and she threw him to the ground, breaking his leg. The neighbors cried, “Your son broke his leg, what terrible luck!” The farmer replied, “Maybe so, maybe not.”
A few weeks later, soldiers from the national army marched through town, recruiting all boys for the army. They did not take the farmer’s son, because he had a broken leg. The neighbors shouted, “Your boy is spared, what tremendous luck!” To which the farmer replied, “Maybe so, maybe not. We’ll see.”
Related posts:
Your Outsized Wealth Is Mostly Due To Luck, Be Grateful!
The Phone Call That Changed My Life Forever
How To Feel Rich Even If You Can't Get Technically Rich
Spend Time Being Grateful
If you are feeling agitated or upset something isn't going your way, please zoom out.
- Be grateful if you live in a stable country that isn't at war with its neighbors
- Appreciate your health or the health you have remaining
- Recognize your friends who constantly spend time checking in on you
- Love your family despite all the frustrations they create
- Cherish your job and your colleagues, for some have a difficult time finding work today
- Appreciate the conveniences of being able to make money in more flexible ways
- Embrace the daily cries and screams of your young children as they won't be young for long
- Be thankful for every opportunity to try!
Here are five unusual things I'm grateful for. It's an exercise in looking on the bright side of things.
Reader Questions and Suggestions
Do you sometimes feel bad about your good fortune? Have you ever gone on a winning streak and dreaded it because you know eventually something bad will happen? How do you overcome any money guilt or guilt about your good fortune?
Increase your good fortune by investing in real estate while the market is soft. There's much less competition due to high interest rates, so opportunities abound. Dollar-cost average into private real estate funds offered by Fundrise. Fundrise manages over $3.3 billion for over 480,000 investors mostly in the Sunbelt region.
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Hi Sam,
re: “The Fear Of Buying A Home Now” — I just wanted to share that I think it’s a great time to buy a home right now, if one can afford it. The high interest rate is tough, but with homes sitting on the market and not many buyers, it is quite easy to negotiate on the price now.
My story: I closed on a duplex here in Austin on Oct 31 — last week. This duplex was assessed at $1.3MM by the county in March 2023, and the bank’s appraiser assessed at $1.1MM in October. The duplex was listed for $960k, got under contract for $930k, and negotiated down to $900k final price after the inspection. It’s in the Eanes school district, which is arguably the best public school district in Texas.
7 7/8% fixed interest rate with 30% down. When rates come down to ~6.5%, I’ll refinance. Not worried about the interest rate because I’m so happy with the buy price.
Anyways — a data dpoint for you. Thank you for your blog.
Dan
I always feel fortunate that I can work at a job where we don’t need the money so the money is a bonus! They allow me to work as little or as much as I want, the culture is great and albeit they don’t say it, appreciate an older semi-retired person like me. It will not make me rich but will enrich me, it will not provide benefits but benefits me to leave the house and allows me to never have to withdraw any funds to live well on. And last but not least, keeps my game sharp if I ever go back to a “real job” which I am sincerely doubting!
Such a job is the best! Every paycheck is like winning the lottery.
I’m trying to hunt for one of those jobs for my return to work. Not easy!
Heh, I’ve told people who were unsure of whether they really deserved some award or accolade that had been presented to them to just go ahead and accept it. Just share credit where credit is due.
After all, I continue, there will be many times in their lives where they will do good or great things for which they will receive no recognition or reward. Indeed, they will even catch some blame for things that were in no way their fault. Hopefully, it may even out a little.
Yeah, learning to accept and say “thank you” for a praise is a skill one must develop.
In many Asian cultures, we defer and don’t accept to try and stay humble. But it can be a crutch.
I took a trip to Mexico where I visited a few, small Mayan communities. It was a very impactful trip for me. I was really moved by how little they had, how simple their lives were, and yet how happy and kind everyone is. So yes there are times when I feel guilty for having so many modern conveniences and resources that they don’t. There are so many basic things we really take for granted like reliable flushing toilets, electricity, clean running water, AC, etc. that thousands (probably millions) of people live without.
When I feel this way I try to pause and count my blessings, remember we don’t need material things to be happy, the value of simplicity, and find ways to donate and support those less fortunate.
Yes, let us count our blessing and Toto bidets! Can never go back.