I recently wrote an article entitled “How Much Stuff do we Need?” And I talked about minimalism and stoicism and consumerism and probably a bunch os “Isms” that I am unaware of. I want to expand on that concept and put our perceptions of wealth under some scrutiny.

What is our baseline?

We all have an unconscious perception of enough. We tend to believe our assumptions about what kind of lifestyle we need to be living to be successful or comfortable. We may think we need a 2500 square foot 2-story in a good neighbourhood with good schools and 2 cars that are under 5 years old and the latest gadget and clothing that is relatively in style in order to be happy..

We may think we need a 25,000 square foot mansion with 17 sports cars , 2 swimming pools, servants and a vacation house in Switzerland in order to be happy and comfortable.

We may think we need a tiny home in a safe spot and access to organic community gardens to be “living the dream”

So which is right? Of course, you are getting my point but I dare you to question your own beliefs about this. You may be surprised when you realise that you actually feel your idea of comfort or success is the right one, and that anything outside of that is ‘weird’.

Who are we trying to be like or impress?

So where did our own “standard of living” model come from? From our parents? Did we learn it from our peers? Do we associate with people who earn more money than us? There are a myriad of influences on our mental maps that create our perception of reality and it is important to examine them from time to time. Are they serving us? Are they realistic? Are they achievable?

What if there was another way?

I bring this up because I see so many people struggling to appear “well-off” when they really aren’t. I see people buying the latest toys and gadgets but not able to pay their credit card balance. I see people trying to keep up with the jones’ but with no retirement savings.

The cost of living is increasing at a rate that is quite alarming. I have written about this before, but it needs to be looked at critically. The price of houses has become insane. The cost of college tuition has skyrocketed. So many middle-class “normals” have become luxuries and we need to re-evaluate what a sensible “lifestyle” looks like.

Time = freedom

The wealthy have understood for a long time that the true currency is time. Time is what having excess money gives you. If you work for a living, you are trading your time for money. The problem is, there is only so much time. There is only one of you. That is why I am always preaching about multiple streams of income. It is the only way to leverage time and have your money working for you.

But the bigger picture here is figuring out what you are aiming for. The amount of money you earn is only as useful as your cost of living. If your expenses every month cost you every cent you earn ( or a little more) then you have a problem. The scale of your income and expenses if irrelevant. The ratio is all that matters. If you are able to live comfortably on less than you earn then you are successful. This is the real “American Dream”. Living on less than you earn ind investing the difference.

So it may take choking down a bitter reality pill, but in the end it is the only path to real freedom. Stop trying to impress people. Stop trying to live up to your parents expectations. Stop believing that you are more well off than you actually are.

Take a hard look at where you are financially and embrace it. Fooling yourself or others is a poor choice. You need to start from where you are at. No-one is saying that you are stuck there. The point is to fine financial freedom. Financial freedom allows you the breathing room to grow. You may be able to achieve your subconscious lifestyle model eventually or even exceed it, but you have to build up to it. Do not drown yourself in debt to live a lifestyle that seems “normal” but is realistically not where you are at (yet).

Can we downsize and still be happy?

If you were to be living in a modest house, driving a modest car and wearing modest clothes, but had very little debt, and investments making you passive income every month, you would have a lot less to worry about at the very least. We carry the burden of financial worries into every aspect of our lives when we are struggling to make ends meet. It affects our performance at work, at home and every part of our daily lives. We cannot perform at our best when we have financial worries. Studies have proven this conclusively. When we are carrying the weight of financial struggles with us, it actually uses up brainpower that we could be using to be more engaged in our productivity. It is an actual burden, weighing us down.

We live in a society that prides itself on espousing the tenants of freedom but are we truly free? If we are encumbered by debt and and sustainable lifestyle then we are not free, we are slaves. It is self-imposed slavery. We are taking on too much too quickly just to appear prosperous, yet we are imprisoning ourselves to a live of indentured servitude in the process.

Big rocks

Cutting back on a few lattes is not going to change your financial status. You have to really take a look at your big expenses. Primarily, where you live. If you are living in a giant McMansion in the suburbs and driving a new SUV you need to seriously evaluate if you can afford these things. If you can, then great, carry on. If your mortgage and car payment is keeping you from saving for retirement or investing for passive income, I am suggesting you at least consider a more economical place to live for the short term. This is disruptive and scary. I get it, I am not oblivious to how insane it appears to uproot your family and move to a cheaper neighbourhood. But financial freedom has so many advantages that will permeate into every area of your life, that I believe your happiness quotient will rise considerably. Then once you are on the right track, in all likelihood you will be able to move back to the “good neighbourhood” in time. This time, you will have the feeling of financial freedom to bring with you and the sky is the limit at that point.

We are always looking for a quick fix, a short term solution to everything. We are so accustomed to getting everything right now, we forget to have long term perspective when we need it, especially for big things like housing and transportation.

Lifestyle - are you buying a feeling?

The dopamine rush we feel when we buy something new can be chalked up to spending money to feel a feeling. As we all know, feelings are fleeting. We cannot buy happiness. We can invest in happiness, by living below our means and investing the difference. Long term Happiness depends on long term solutions. Quick fixes do not last very long. As has been discovered by our social scientists, we we are far happier investing in long term goals, experiences and self-improvement than “things”. It is a very real fact that we get over the rush a a new toy pretty quickly and then we need to buy something else to get that rush.

However, by having a long-term plan, and your money making you more money, you are investing in a long-term base level of happiness because you are building a foundation of financial freedom which will affect you emotionally and psychologically every single day in a positive way. This is the path to true happiness.

We are going to be far happier building a fortune with the intent of long=term psychological peace than trying to impress people or pretend that you are “doing well”. We need to be humble and disciplined enough to start from where we are actually at, and work towards the dream. We must develop good habits that will be useful and prudent all along our journey to financial freedom. This includes:

Spend less than you earn
Live below your means
Invest for the long-term
Create multiple streams of income
Value your time above all else

My books, courses and website all offer ideas and strategies to live the lifestyle I am talking about here. You just need to bring an open mind and the determination to succeed in spite of what the neighbours think. You can be exceptional, you just need to claim it.

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