Since the very beginning of Financial Samurai, I've sought to delve into the psychology of wealth by focusing on stories about wealth and moving beyond numbers. My favorite is, “The Curse Of Making Too Much Money And Not Pursuing Your Dreams“. It's infinitely more interesting to learn about what makes people happy, and what wealth means to everyone.
Most of us are born into relative wealth given America, Australia, and the United Kingdom, are where most of you readers hail from. There are hundreds of millions more people born into relative poverty and can't get out. Go anywhere in India for a couple weeks and it will change your appreciation of what you have, forever. You'll probably no longer complain about why you don't make X, and you'll likely lose some weight as well upon realization of so much waste.
The psychology of wealth is more than just having a net worth of $1 million dollars by the time you retire. That's pretty straight forward if you have your head on straight the day you graduate from college. The psychology of wealth is about being wealthy, no matter how much money you have. It's about “understanding your relationship with money and achieving prosperity,” as Dr. Richards writes.
THE PSYCHOLOGY OF WEALTH REVIEW
* The Beginning: To understand what we have, we must understand how far we've come. Dr. Richards talks about how we define wealth, the evolution of wealth, and finding your dreams in the first few chapters. Dr. Richard's great-great grandparents were slaves and were set free by the Emancipation Proclamation as young adults. From there, they managed to purchase 41 acres of property in Tennessee to begin their wealth-building journey. The idea is to discovery our past and appreciate it for all its worth so we can appreciate how much more we have now.
* The Importance Of Self-Esteem: Self-esteem is probably the most important aspect in building wealth and appreciating wealth in my opinion. It's why I highlight this particular topic here. If you do not believe in yourself, nobody else will. If I do not believe I will vanquish my opponent on the tennis court, then I will be in a compromised position and probably lose. The great news is that even if you are not born with a high amount of self-esteem, it can be built, one step at a time through continuous positive experiences.
“It is not possible to grant another person an authentic and durable sense of self-esteem-it is a quality that we gain through our own experiences.” says Robert Reasoner, past president of the National Association of Self-Esteem.
Start making a conscious habit of replacing negative language with positive language while thinking and speaking about ourselves and others. It really is about taking small steps to build your self-worth, which can be synonymous with self-esteem. Learn from your mistakes. Be open to other points of view. Trust your judgement. Be proactive. Don't fear change. Feel grateful for what you have and so forth.
* “Value Is What You Get, Price Is What You Pay”: This is a famous saying from Warren Buffett which is used by Dr. Richards to discuss what is important to us. What makes me happy are cheap old toys from my childhood and spending time with loved ones. Yes, a Lamborghini Gallardo would make me happy for several months, but I'm sure that thrill will fade. I find tremendous value in simple things and don't require expensive hobbies at all to make me happy. The goal is to list some things that you find tremendous value in, and highlight the various prices you've paid and would be willing to pay.
* The Power Of Giving Back: Some of us are more generous than others and I've long struggled with the feeling of not feeling generous enough. I remember when I was in college, I gave $1,000 of the $3,000 total I had to my old baby sitter of 10 years because she had just given birth to her daughter. It made me feel so happy. Once I graduated, and began working like a slave, I stopped giving as much money and time, partly b/c I was always so tired, and partly b/c I felt I worked so hard for my money at 22-23 years old. A $1,000 dollars now was worth much more than a $1,000, and I couldn't just give it away.
Over the years, I've volunteered more of my time, and given away more of my money again. The power of giving back creates a tremendous amount of wealth, and needs to continue. The book talks about this power of helping others, and at the Yakezie Network's core, helping others is what it's all about. Hopefully you folks can participate in the Yakezie Writing Contest that will be launched end of this April.
CONCLUSION – A GREAT READ
The Psychology of Wealth is an excellent book that came at a very important time in my life. I'm trying hard to extricate myself away from “the rat race” and live a more balanced lifestyle that isn't focused just about money. I've written about lifestyle balance ever since I first published my About Page three years ago, and I'm still trying to get there.
If you feel consumed by money, or feel you don't have enough money, you most definitely should read The Psychology Of Wealth. The book will help change your relationship with money and help you appreciate more of what you have. As Dr. Richards writes, “The psychology of wealth means taking responsibility for one's own decisions and nurturing the qualities and attitudes within ourselves that will create a prosperous life.”
HOW TO WIN ONE OF FIVE COPIES
* Sign up for my E-mail feed. 3 points.
* Highlight this giveaway on your site. 5 points.
* Comment why you are having a tough time appreciating your surroundings and the wealth you have. If you do appreciate your wealth and surroundings fully, then comment on how you plan to build more wealth, based on your definition of wealth. 5 points.
* Share this post on Twitter by clicking one of the buttons below. 3 points.
* Google +1. 2 points.
Make sure you've commented what steps you've taken to win below and help me out by telling me the total points. I'll choose five winners in 10 days after this post is published. If you have any questions for Dr. Richards, feel free to ask them below and I will ask the good doctor to respond when he can. Good luck!
Please note: The PR agency has asked all contestants be from North America. Sorry international readers!
Regards,
Sam
Book Details: Hard copy, 241 pages. McGraw-Hill publisher. $26 retail.
I’m back and haven’t forgotten about you.
Going to choose a couple and randomize the rest. Be back shortly!
Nice article Sam,
I do not have a hard time appreciating what I have but something has changed. In my 20s I felt this addictive exuberance to accumulating more and with that came a strong sense of direction that is no longer there.
It might be once you get comfortable you lose some of your motivation. Perhaps it is my middle age but I find myself torn between working to build more versus taking time off to enjoy life. The choice seems like it has to be one or the other, there isn’t much work/life balance.
Looking back, I got more than I ever dreamed of and wonder if going for more will be worth the additional sacrifice. The story I tell myself is that I will put in another 5-10 years. Successful people fear one day their winning streak may end but if it continues will you be able to walk away when the money is too good?
I have a few friends that walked away from their demanding, high stress jobs when they got burned out and they perceived that the money was no longer good (their bonus was still bigger than an average person’s salary). It might not have been the worst thing that happened to them because it gave them the opportunity to pursue other interests besides work but it will be interesting to see if this ultimately makes them happy, because isn’t happiness what people are really after?
Signed up for email feed and commented. – 8 pts.
I defintely could use this book! Shared link on blog :)
Great post! The book sounds wonderful, and I’d love to read it. I am pretty happy with where my husband and I are financially, but I think sometimes envy gets the best of me and makes me want more. I have to remind myself to be grateful for what I do have, and that keeps me focused on my financial goals.
I commented and tweeted – 8 points. :)
I think it’s easy to take for granted the wealth we have in the United States. I’ve lived in other countries, and it’s amazing the amount of excess we grow accustomed to here in the US. I don’t consider myself wealthy if “rich, with a lot of money and a large income” is your definition of wealthy. I do live comfortably, however, and am able to meet my basic needs. I am grateful for my situation and what I have.
(email subscriber + commented + tweeted = 11)
Great review Sam, and I look forward to reading this book one way or another!
The trouble I have appreciating my surroundings and the wealth I have stems from the transition to “youth” to “middle age” I think. In my younger days, wealth was status. The more you had, the bigger deal you were. It was purely from ego. As I age, it is clearer to me that wealth means more to me as a source of security. It greatly mitigates alot (but not all) of the uncertainty from life. As a result of this shift, you become dissatisfied with what you have because it isn’t enough to eliminate all of that uncertainty. At least, that’s the battle I have.
Signed up for your feed and also tweeted the post! Thanks for a great read.
Sounds like a great read!
Mark
Right now I’m pretty focused on accumulating wealth but I could definitely see myself coming to a crossroads between working too much and making money/ enjoying my life at some point.
(Signed up for e-mail, commented, and tweeted )
I firmly believe that the first step to appreciating and understanding wealth is having an honest, open conversation about it. Money can enable us if we approach it with the right frame of mind. It can allow us to live a more balanced lifestyle, ultimately creating happiness.
Unfortunately, we often end up trying to keep up with everyone else which can be a massive source of stress and anxiety for a lot of folks. What have been the biggest challenges you’ve faced while trying to remove yourself from the rat race Sam?
(I’m already an e-mail subscriber, not sure if that counts! Commented)
Your relationship with money affects everything you do. A good relationship will have a positive effect on your life and a negative one will ruin your life. Placing value on what is really important such as family, friends and experiences keep things in balance.
I’m definitely going to have to add this book to my list of must reads. I love exploring other authors thought management methods. Sometimes all it takes is to step back and examine our way of thinking about things – to see wealth as something more than net worth. I believe that people who become a victim of feeling consumed with money issues can benefit by refocusing the “laws on their lens” – to view money differently and embrace other forms of wealth.
Thank you for another valuable post. I travel to a developing country every 2-3 years and that has always been a ‘self-relfected vacation’ for me. We all have up and downs but relatively to the majority of population in Asia, Africa, etc..we are very lucky. I am taking nieces and nephews to Southeast Asia for 2 weeks to volunteer so hopefully that would be a life lesson for them.
Excellent review. One to add to my Wish List it would appear.
It’s interesting you say spend a couple of weeks in India. On Tuesday I went to see ‘The Best Exotic Marigold Hotel’ at the cinema, and despite the humorous undertones and the personal finance links within, it was interesting to see just how lucky we are here in the UK. Even when everything seems to be “as bad as it has ever been”, it is still immeasurably better than in India.
If for nothing else, you should watch it for that. It puts an awful lot into perspective.