If you’re still apoplectic that I challenged the sacred “4% Rule” from the 1990s and introduced the new Financial Samurai Safe Withdrawal Rule, do not fret! Just because you can’t save 200X your annual expenses or don’t want to only withdraw 0.5 percent a year in retirement doesn’t mean you’ll never be rich. Let me share with you how to feel rich instead.
To feel rich consistently is even better than actually being rich. In fact, learning how to feel rich might be the biggest wealth hack of them all.
I define rich as earning a top one percent income of $1+ million or having a top one percent net worth of over $11 million. You may disagree, but if you make more or have more than 99% of the population, you are rich.
However, you can be rich and still be miserable because your spouse left you. You can be rich and still feel terrible because your children hate you for neglecting them growing up.
Making $3 million a year is great, but due to tremendous job stress you hate your life. You may have a $20 million net worth and never feel rich because you sacrificed your health to amass your fortune.
Obviously, if you can consistently feel rich and actually be rich, then you’ve got the best of both worlds. But sometimes, we can’t have everything we want.
This article will share my ideas on how to feel rich even if you can’t get rich. And just so you know, the Financial Samurai Safe Withdrawal Rate = 80% X 10-year bond yield. Given the 10-year bond yield has finally moved up, the FS Safe Withdrawal Rate is now higher than 0.5%.
Feeling Rich Without A Lot
I’d rather feel rich than be rich any day. Money is only a means to an end. That end is to live a rich and happy life. Once you’ve got all your bases covered, earning much more won’t make you much happier.
Perhaps it’s easier for me to say I’d rather feel rich given I’ve finally got enough passive income to provide for my family.
However, it was not always this way. I distinctly remember being a broke college student and still feeling really happy studying abroad in China in 1997.
It was 90 degrees every evening in Beijing. All I had was a small fan that I shared with my roommate. Every eight seconds I would feel a pleasant breeze for two seconds until the fan rotated gently the other way.
We were in the old dorm with no AC and only squat toilets. We also slept on wooden planks for months. Regardless, it felt amazing to be immersed in a new culture.
Come to think of it, while in Beijing, I even got to party with Lisa Joy every week, the brilliant co-creator of the HBO hit show, Westworld. Small world huh? None of us had a lot of money, but we were happy. Lisa, if you’re out there, can I get a small part in an upcoming episode? I will work for free. Think about all the good times we had at Solutions outside 北大！
I remember feeling rich to be sharing a studio in Manhattan in 1999 because I had landed my dream job on Wall Street. Yeah, it wasn’t ideal to share a room after getting a job. But NYC was expensive.
Although I was only making $40,000 a year, which was equivalent to making $24,000 in Dallas, I was just glad to have a job. I felt my employer had made a mistake in hiring me because historically nobody had ever been recruited from my school at the time. Feeling lucky made the 70-hour work weeks much more bearable.
Many of my fondest moments were all when I had little-to-no money. Think about all your fondest memories as well. Did you have a lot of money during those moments? I’m guessing the answer is no.
How To Feel Rich Even If You Can’t Technically Be Rich
Now that we agree we don’t need to be rich to feel rich, let’s look at some ways to consistently feel wealthier than we really are.
1) Increase your freedom to choose.
Unhappiness exists when you can’t do the things you want, when you want. A lack of choice is why so many employees are miserable at work. By finding ways to increase your freedom to choose, you will feel richer.
When I left my day job in 2012, I lost over 80% of my income. Yet, I felt richer because I had complete control over my time. Of course, it hurt to no longer make six-figures and receive healthcare benefits, but the wonderful feeling of freedom more than compensated.
Consistently search for ways to increase your freedom to choose. Maybe you can find a job that routinely allows you to work from home when the pandemic is over. Maybe you can rise in the ranks so that you get more respect and leeway at your firm.
Perhaps if you acted kinder and aren’t as easily angered by things you read on the internet, you would have more friends.
Do things that increase your freedom to choose.
2) Create something on your own.
Whether you spend a month creating a custom scarf or you spend a year landscaping your garden and waiting for your tomatoes to grow, you will feel richer creating something on your own.
My dad planted a lemon tree in his front yard five years ago. He diligently watered the darn thing for three years and it never fruited. One day, he decided to graft a couple lime branches to the tree. And finally, five years after first planting the tree, fruits came! He is so proud every time he gives me an update.
It is true that making $1,000 on your own feels more rewarding than making $1,000 at a company. When you make money on your own, there is no doubt that your effort was the main reason for the reward. When you work for a company, you’ll always have some doubt about your impact.
For example, let’s say you’re an overpaid CEO who gets hired to run a sugary soft drink manufacturer like Pepsi. Whether you are the CEO or not, the soda will still get sold due to its existing distribution channel and sugary addiction. Instead of feeling rich, you might feel horrible for peddling poison in the form of a beverage.
Now compare how rich you would feel if you were the founder of a company that created a new healthy beverage to replace Pepsi? Even if you get paid much less, knowing that you created a new product would be incredibly rewarding. Further, if your product helped improve the health of Pepsi drinkers, you would feel even richer.
Next time you talk to your artist friend, ask why she continues to do art when her art can’t pay her bills. Ask the same thing to your writer friend. The reason why people create is that creation is the reward itself. Whether the creation makes money or not is secondary.
I could have read a book on how to feel rich. But it is much more rewarding to write a post on how to feel rich instead. Having my own website is a convenient way for me to create, which feels very rewarding every day.
3) When you don’t give up and finally succeed.
The longer you spend working on something, the richer you will feel once you succeed. It is extremely hard to fail if you don’t give up!
This rich feeling is why you don’t want to just give your children everything. It’s better to make them earn their success. Please don’t envy the person who inherits everything. Feel empathy for them instead.
Here are some good examples of not giving up and finally succeeding:
- Studying for the Bar Exam, Medical Board, or CFA and passing.
- Self-publishing a book after working on it for two years.
- When you finally land your first writing gig like Lisa did after pivoting away from consulting and law
- Working on a new business account for a year and finally seeing your first order invoice from it.
- Finding love after going on 100 bad dates.
- Winning a divisional title after failing for three years.
- Trying to naturally conceive, then trying IUI, and then trying IVF for five years with numerous miscarriages and finally conceiving.
Even if Financial Samurai generated no income, I would still feel incredibly proud of fulfilling my commitment to publish three times a week for 10 years. It is the challenge of doing something hard and finishing it that provides one of the greatest rewards.
The more failures you experience, the sweeter the feeling of victory when you finally succeed. Do not give up on something you care about.
4) When You’re Surrounded By Loved Ones
Friends and family are everything. Having friends to joke around with brings so much joy. Having family that support your endeavors feels priceless. Not being able to physically interact with friends and loved ones as easily is one of the main reasons why this global pandemic is so hard.
As a father of two young children, I feel incredibly rich. It took years to conceive our son. Then to have a daughter a couple years later felt like a miracle as geriatric parents.
I wish someone told me in my 20s and early 30s that having children would provide so much love. If I had been told, I would have tried to have children five years sooner. Instead, I was overly focused on trying to achieve financial independence ASAP.
If we did not have children, then we would do more work to nurture our friendships. Great relationships are worth so much more than having a lot of money. Of course, you still need a baseline level of money to feel happy.
5) Provide something meaningful to society.
“People will forget what you said, people will forget what you did, but people will never forget how you made them feel.” – Maya Angelou
One of the reasons why people are so angry at the Financial Samurai Safe Withdrawal Rate is it has made people consider leaving money to others after death. This jolt of extending beyond oneself has made some folks feel bad. And that is my failure. I agree that it’s foolish to die with a lot of money. However, if you want to feel rich try thinking longer term.
After talking to an estate planning lawyer, you’ll start thinking about how to make your wealth last for generations. You start thinking about how to ensure your children and grandchildren will be taken care of if you pass prematurely. You also start thinking about how to continue to fund charities you believe in.
Some of these charitable institutions become a part of your family. Over time, if you are involved, you get to know the people who work there and the people who are being helped. You develop a relationship. To have the funding die with you feels bad because people will always need help.
My goal is to figure out a way to give more. One way is to keep Financial Samurai online, get someone I trust to take over, and continue to charge nothing. Another way is to create a trust that provides income to a local foster shelter and a disability rehabilitation center.
The more you give back, the richer you will feel. The lack of purpose is one of the main reasons why people become disengaged from their jobs.
You Can Feel Rich By Being More Appreciative Too
I’ve highlighted five ways you can feel richer without being rich in the traditional sense.
Here are other ways you will feel rich. All involve being more appreciative of your circumstance.
- If you walked away from a bike accident unscathed.
- If you are told you only have six months left to live and live for another three years.
- If both of your parents live to hold their grandchildren.
- If your job is something you’d happily do for free.
- If you were a C-student who now lives an A-lifestyle.
- If you sprain your ankle and didn’t break your ankle.
We can all agree that luck plays an enormous part in getting rich. However, we can proactively do things to make us feel richer every day. We can also spend more time appreciating what we have.
Keep An Open Mind
I know I will unlikely get to the $40 million net worth figure my 0.5 Percent Rule would have me shoot for. That’s fine. Stretch goals aren’t supposed to be easy. But I still feel rich because I appreciate what I have right now.
Having 100% control over my time makes me feel very rich. To then be able to hug my kids every day is a blessing. I would give ALL my money to have my children and time, which is why I haven’t been lured back to the workforce yet.
In conclusion, it’s much better to feel rich than actually be rich. Don’t let some random guy on the internet tell you how to plan your financial life. Instead, listen to perspectives with an open mind and come up with your own game plan.
Like everything, feeling consistently rich takes effort. If you spend as much time nurturing relationships as you do chasing money, I dare say you might become the richest person in the world.
Readers, what are ways in which you can feel rich without being rich? Also, I’ve received a lot of accusations that my 0.5% Rule is too stringent. However, I’d love to get alternative solutions and mull them over as I plan for my financial future. Without solutions, it’s hard to take action.