What Does Your Rich Look Like?
A few years ago I hosted a very good friend at my home for the first time. Later in the day, as he thanked me for hosting him, he told me a rather curious thing (paraphrasing):
” I like your house very much, though I think the TV you have downgrades it. I didn’t expect someone of your status to have such a TV”
My TV is a 8 year old 21 inch Sony Wega Flatscreen. Such TVs were phased out a long time ago and have been replaced by newer slim versions with all sorts of exciting features. I have however not changed my TV for several reasons:
- It works!
- I spend really little time watching TV.
- By having an old unimpressive TV in my living room, I am inadvertently communicating to everyone, especially my child, that it is not worth her attention, there are other fun things to do.
Carry forward to about five months back when I was making a decision on where to take my child to school. While discussing my eventual choice with my friend, he raised a brow and said:
“You must be really rich to afford XXXX school”
Why these two stories? Because they demonstrate how we define riches. Everyone’s rich looks different. For my first friend, having the latest TV is a sign of status/wealth (my TV is poor people TV 😀 ), and for the second one, the only reason I could have chosen the school I chose is because I am rich (I am not rich, I have poor people TV).
One thing our definitions of wealth fail to capture is the fact that often in life, we make trade offs. We cannot have everything we want to have. Secondly, we tend to invest more in the things we value. For this reason, what may seem like a poor choice to one person could be a rich choice for another. Two people with equal incomes may end up with balance sheets that look very different because of how they define wealth.
Is it possible to be so rich that you do not have to make financial trade offs? May be, but most of us will not get to that point of riches. The most important thing for you to do now, is to define what “your rich” looks like. If you do not do so, you end chasing everyone and everything.
My rich is not a fixed idea, but at every point of my life, I have ensured that I am clear on what rich looks like. Currently, my rich looks as follows:
Why is this list of 7 important for me?
It defines my financial priorities, and things I should be focusing on at any one point. When your definition of rich is clear, you do not get easily swayed by what is fashionable, or what your friends have. When I visit my friend and see she has the latest 200k TV, the latest iPhone and a 4 wheel drive car, I might be tempted to at least upgrade one of the three, but my list keeps me sober. Does this mean I will never buy a new phone? No. It means that if a new phone is competing with my annual holiday, the annual holiday wins, unless I do not have a phone at all. Now you see why I keep my old TV. I might upgrade it some day, but not because everyone has a new TV.
Clarity of goals means you live a life that has a direction you have picked, and not one others decide for you.
What does your rich look like?
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