I know a person slightly above my age – he and his wife are both school teachers who do not have too much income from tuition. And they are school teachers  in a poor school but have government regulated pay. I have never, ever heard them complain about money – NEVER – the special emphasis is necessary. His daughter is now married and is in Dubai. His son is working for a big brand in the US.

Not that they wanted their children to go abroad – it just happened. The father did not pay a rupee for his son’s travel – he got a job in an Indian company, went abroad, joined another company and studied there. I must add both his kids were academically brilliant.

When I met him recently he actually told me “I feel rich, because my mortgage has been paid off, I have some investments and both of us have an indexed pension”. IMPRESSIVE I thought.

Now take the case of a fund manager – the fund manager’s annual bonus (for March 2015) could be about 50% of this teacher couple’s net worth!! Does the fund manager ‘feel rich’? I am not sure. The rich / poor feeling goes far beyond numbers.

I know of people with about 5x the net worth of the teacher couple and feel miserable about not having any money.

What makes a person feel rich / worthless:

1. How rich / moneyed are your friends: if you have friends who are much richer than you (perceived) then the person feels low.

2. How high / low you started: If your parents gave you a good life, spent lavishly, etc. and YOU are not able to match that (forget improve that) then you feel low. However if you have been able to pull yourself from a penny pinching family to be able to spend a lot of money, you feel rich.

3. How your siblings treat you: If your siblings have made simpler choices in life, have less money than you have, you feel comparatively richer. Obviously if you have siblings with rich tastes and big spending habits you feel deprived..however (and sadly) you do not know whether they are ‘really’ rich or just ‘big spenders’ who might just not have enough money for their OWN retirement needs…

4. How your ex colleagues have done in life!! I know a guy who left a big NBFC. As soon as he left..the nbfc started giving stock options of the parent company – and all his colleagues are sitting on about Rs. 2-5 crores of Esop. His total networth would be less than a crore. He missed options of about Rs. 4 crores. Wretched luck, but yes it can make you feel rotten.

If you see all these are comparative miseries. Also a person earning Rs. 500,000 and spending Rs. 350,000 a year feels richer than a guy earning Rs. 25,00,000 and spending Rs. 24,89,000! The former couple (like the teacher couple) feel far more in control of their lives than the high earning, high spending couples.

I know of a young couple earning Rs. 40,00,000 (aged about 30 years) who live the life of a Rs. 500,000 earning couple. I have never seen them buy something ‘because they can afford it’ – most of the money is going into investing. By doing this, they are just preparing a financial cushion for an early retirement / starting a business of their own.

I know of another young couple (when I say young I mean sub 30 years of age) again earning about Rs. 1 crore – who live a little more lavishly than the earlier couple, but again investing very very aggressively for a earlier financial freedom.

I also know of kids earning Rs. 250,000 who will nonchalantly buy a Rs. 50,000 phone. Though I do agree that when you earn Rs. 2.5 L there is not much you can do …but still these kids never get a feeling that they are in control of their lives.

YOUR LIFE EXPECTATIONS RUNNING AHEAD OF YOUR INCOME IS THE SUREST WAY TO THE POOR HOUSE.

All of it is in the mind, after all.