- It may be possible to live like a rich person even when you’re on a budget.
- The hedonic treadmill influences how much money you need to feel wealthy.
- High-net-worth individuals tend to have low neuroticism and an internal locus of control.
- You can feel rich by spending money on experiences, outsourcing your errands, and varying your pleasures.
- But tapping into rich-person psychology isn’t all positive: Wealthy people tend to have less compassion and be more narcissistic.
- Ultimately, the miracles that define your life probably won’t be cash-based, and that’s to your advantage.
What’s the next best thing to being a multi-millionaire? Feeling like a multi-millionaire. We’ve all fantasized about that moment when we scratch our lotto ticket and see the winning numbers. What do we do first with all our bags of money?
The exercise reminds me of the “miracle question” that some mental health providers use in therapy sessions. Basically, they ask their clients how their lives would look different in the morning if a problem-solving miracle happened overnight. The question can lead the client to a positive vision of the future, clarification of their goals and values, and a feeling of hope and freedom.
When you dream about winning the lottery, it’s not the money that matters; it’s what the money will do. So let’s take a look at how you can replicate the psychological effects of being super rich, but on your current budget.
The Personality Secrets of the Rich
Financial stress can have an outsized impact on mental health. People suffer when their basic needs aren’t being met and they don’t have social support. But beyond these rather minimal demands, exact income amounts don’t seem to matter much. This is partly because of the hedonic treadmill.
The hedonic treadmill (or hedonic adaptation) theory states that a person’s happiness “set point” is relatively stable across the lifespan. If something amazing or terrible happens to you, you might experience a spike in mood one way or the other, but eventually you’ll feel about the same as you did before the thing. Some research suggests that the thing is only responsible for about 10% of your long-term happiness. The rest is up to genetics and attitude. So as far as your winning lottery ticket is concerned, in a few weeks or months, your happiness will probably level out to exactly where it is now. You’ll have to keep winning the lottery, in greater and greater amounts, on a pretty regular basis, to keep experiencing the hedonic high.
In lieu of being a frequent lotto winner or having a genetic disposition to happiness, what can you do to feel rich? Well, according to one recent study, the super wealthy generally share some characteristics, including low neuroticism and an internal locus of control.
- A high score in neuroticism (one of the Big Five personality traits) means someone is more likely to be self-conscious, anxious, frustrated, or moody. Basically, neurotic individuals are more at risk for negative emotionality and even mental health conditions. On the flip side, a low score in neuroticism may indicate more resistance to stress.
- Having an internal locus of control means that you attribute your successes and failures to your own abilities, not external forces. So for a rich CEO of a cake frosting company, maybe business took off because they’re brilliant, not because their generational wealth enabled them to make lucky connections at a prestigious university and cake frosting market trends aligned at the ideal moment. People with an internal locus of control tend to have good coping skills and be more persistent in pursuing their goals.
Interestingly, studies in positive psychology show that the personality traits of low neuroticism and internal locus of control also happen to greatly improve one’s overall chances for subjective well-being (SWB), aka happiness. So if you want to feel rich and happy, work on your resilience and your personal empowerment. Both of these assets can be cultivated.
Other Secrets to Feeling Rich
If you want to feel like a high-net-worth individual, the number one thing you need to do is stop comparing your wealth to the wealth of other people. There’s likely no amount of income that will feel satisfying if your neighbor is climbing up the socioeconomic ladder faster than you. If you’re a billionaire Russian oligarch, another billionaire Russian oligarch will always have one ruble more.
One recent study showed that subjective socioeconomic status (SES) matters far more than objective SES in determining someone’s life satisfaction. In other words, the correlation between income and happiness is all relative. (And it could explain why Americans become less happy as income inequality increases. We see far more people with far more money than us, which can feel rotten and demoralizing.)
Here’s another trick to feeling like a million bucks. Money is one of those material resources, like iPhones and Lamborghinis, that’s easy to quantify and compare. It serves as a ruthless engine for the hedonistic treadmill because even an influx of cash will eventually feel bleh. So rich people who want to invest their wealth wisely invest it in experiences, which deliver more enduring satisfaction. According to two researchers at Cornell University, experiences have the following benefits:
- Experiences don’t lead to a paradox of choice like material consumption does. For example, you’re less likely to agonize when choosing between a day at the beach and a day in the mountains than when choosing between the latest bluetooth headphones. You tend to maximize when choosing possessions and satisfice when choosing experiences.
- Past experiences don’t elicit regret to the same degree that material purchases do. You’re more likely to wish you’d splurged for the better phone model than regret taking your family on vacation to Disneyland instead of Disneyworld.
- Comparison between experiences just doesn’t have a huge hedonic impact. Case in point: People would rather make half as much money as long as everyone else made less than them. But this same relativity doesn’t apply to experiences. If given the choice between two weeks of vacation and four weeks of vacation, people will choose four weeks despite what everyone else gets.
- Our autobiographies are made up of narratives and memories: experiences, not possessions. Even if someone is materialistic, the stories they tell about themselves will be about what they’ve done, not what they own. So experiences are far more integral to one’s sense of self. You can’t upgrade an experience, as you can upgrade a possession, without erasing part of your identity.
The next trick also relates to comparison, which Mark Twain called “the death of joy.” To feel happy, behavior economists recommend that you adopt non-zero sum goals. A zero sum goal is something that implies someone else loses when you win. So if your goal is to have tons of money or career success, that might mean your millions take millions away from other people, making the net change in wealth zero. But if you have non-zero sum goals, that means you’re focused on altruism and prosocial behavior, where one person’s gain doesn’t entail another person’s loss. These objectives lead to higher SWB.
[I think I accidentally changed this article’s working definition of feeling rich to feeling happy. Funny how that happens. It’s almost as if we believe we can buy something very specific with all our buckets of money.]
Finally, here are four more shortcuts to a rich person’s inner world:
- Rotate your pleasures and your gratifications. A pleasure is something sensory or emotional that might feel good in the moment, but which your brain may eventually become resistant to. A gratification is a more engaging pursuit, like an intellectual activity or hobby that might create a flow state. In general, changing up your positive activities can counter hedonic adaptation.
- Outsource your errands. People who spend their money on time-saving services like grocery delivery or gig economy housekeeping are 10% more satisfied with their lives. And this holds true even for people who make less than $40k/year. That’s because prioritizing time seems to equate to more happiness than prioritizing money. And counterintuitively (because it’s poor people who have to work four jobs for less money and no vacation), one’s sense of time scarcity tends to rise with one’s income.
- Keep a cash reserve whenever possible. People who have at least $500 in their bank account are 15% happier. Even if you never touch the money, its existence can give you a sense of freedom and flexibility.
Rich Person Characteristics You Probably Want to Avoid
No study of rich people psychology is complete without acknowledging the negative stereotypes about our high-net-worth friends. As it turns out, these stereotypes are mostly accurate.
- High-net-worth individuals tend to display less prosocial behavior.
- The elite tend to think about efficiency more than e quality.
- The rich tend to show less compassion and empathy than lower-income individuals.
- The wealthier someone is, the less altruistic they’re likely to be.
- The rich tend to act more entitled, especially when driving.
- The rich tend to be more narcissistic.
- The rich tend to experience less awe and beauty in the world than people with low incomes.
It’s Your Life, Not the Lotto, That Makes Miracles
You probably still want to win the lottery. So do I. It’s hard to strike a balance here between saying that people don’t need more money to be happy and saying that most people aren’t getting their fair share of the world’s enormous wealth. Just know that your value and your happiness don’t depend on money. More fulfilling miracles than jackpots can happen overnight, or over the years. Maybe feeling like a multi-millionaire isn’t the next best thing to being a multi-millionaire. Maybe it’s better.