Five ways to feel wealthy even if you haven't got a lot of money

Wednesday, 28 June 2017

Most people know someone who seems to survive happily on an income small enough to make other people wince.

Why is it that some people can feel wealthy on a low income, while others struggle to get by and feel hard-done-by earning comparatively more?

Here are some expert tips for those who would like to feel a bit better off.

Understand your money personality

Financial adviser Shula Newland said people should first think about their own attitudes to money.

She said a person's 'money personality' was a big factor in how wealthy they felt.

'One of the money personalities is an avoider. They tend not to think about money too much, they don't let it affect their decisions, they can be pretty easy-going and relaxed even though they might be in a pretty bad financial situation.'

She said that was a contrast from the hoarder personality, who might have a lot of savings but not feel secure, even though they were in a better position.

Whatever your money personality, having some designated emergency savings as security can help improve your feeling of wealth.

Don't keep up with the Joneses

Your friends may be the biggest thing standing in the way of feeling wealthy.

Newland said how people saw their own position would depend a lot on who they compared it to.

'If you've got rich, wealthy friends you'll feel poor, but if you compare yourself to people who are really struggling and don't earn so much you might be a bit more thankful for what you have got.'

Robert MacCulloch from Auckland University's Graduate School of Management, said social media - where you only see glimpses of the best bits of other people's lives - was a big driver of envy.

Materialistic envy could start in children, he said. 'Someone in their class has an iPhone or a computer game, and they think 'they've got it, I want it'.

'In Auckland, every dinner conversation is 'I bough this house, look how much I made'. You can feel you're missing out if you're not part of that, so you jump in and spend a lot on material things.'

Know your net worth

Newland said she encountered people who were feeling stressed about their finances but had a net worth of a couple of million dollars, thanks to their houses or other investments.

Because they did not have as much cash coming into their bank accounts as they wanted, they felt poor. 'People don't realise how much wealth they have really got.'

She said some forgot about certain assets such as KiwiSaver or superannuation. 'They might own a business and not realise how much that business is worth,' she said.

On the other hand, some people might feel wealthy if they drove a nice car but if there was a huge car loan behind it, it might make them worse off, she said.

Change your mindset

Hannah McQueen said the best thing was to take purposeful steps to be wealthier.

'This is where most Kiwis fall flat,' she said.

'Some of us have a strategy to push ahead faster and get wealthier, but of the few that do, less again stress-test it as to whether it will actually unlock their financial capability and achieve what they need. I am not sure if it is because we honestly think it will be okay in the end or if it's too overwhelming to think about so we don't bother.

'But those that are wealthy have a different mindset. They don't blame people for why they haven't achieved something and they are thinking of the legacy they will leave. Perhaps adopting their mindset is the first step in accelerating your own plan.'

Financial coach Lisa Dudson said positive thinking helped. 'If you wake up in the morning and think 'I'm bad with money', it'll be that way. Like if you think 'I'll have a bad day at work', that's going to happen.'

Look at what you do have

Do you have good friends, a supportive family and your health?

MacCulloch said those things, in the long-run, might be what gave people a lasting feeling of wealth.

He said there was growing sentiment that many people spent too much time thinking about material possessions instead of focusing on the other ways that they could be wealthy.

He said the happiness provided by material things had been shown to be fleeting. Considering and being grateful for non-material assets could help make people feel wealthier.

Newland said for lots of people that meant focusing on things like their kids growing up to be healthy and happy. 'Being thankful and appreciative of what you have got can make you feel wealthy.'