Relationship between Ego & Wealth

Relationship between Ego & Wealth


The first is Vertical Wealth:

People who are vertically wealthy think, “I am rich. So I had better do what rich people do.”

The vertically wealthy people rush to outshine others with better this and better that and what not….

This can also be called a fatty wealth.

Then, there is Horizontal Wealth:

Horizontal wealth means not letting your increased income dictate your tastes. So what happens when a horizontally wealthy person‘s annual income increases drastically in any given year?

Nothing much… really. They don’t care about what others think of them. They don’t care about living like other rich people. They continue to live as they wish to live.

This can be called as a muscular wealth.

So while the horizontally wealthy own their riches, the vertically wealthy are owned by them. And as Morgan says in the Iron Rule article:

The only way to build wealth is to have a gap between your ego and your income. Getting rich has little to do with your income and everything to do with your savings rate. And your savings rate is just the difference between your ego and your income. Keep the former in check and you should be fine over time.

Personally, I liked this idea of two types of wealth. That’s because I have seen people react differently to increase in income / networth.

I would any day prefer being Horizontally Wealthy.

This week’s Fisdom:

But in reality, I know I will be somewhere in between being Vertically and Horizontally Wealthy. But that’s fine… we all are different and it’s acceptable to not fit in perfectly in any definition.

But ideally we should be more skewed towards muscular wealth.

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