By Chris J. Roe, CPA, PFS
As a successful business owner or professional, you may spend years working hard, sacrificing, saving, and investing so that someday you can feel the freedom of financial independence and enjoy life. Finally, you experience the day when your account is flush with big money, and you say to yourself, “I’ve been paid for my life’s work, and my family and I are now set and financially free. We have no more worries in life.”
However, the euphoria of achieving that significant milestone can quickly wane as you move forward in life. You begin to feel you’re not as free as you thought—that financially, you might not have enough.
For years, your business or profession was a tangible entity. You had a direct influence over its trajectory. Its challenges were met with strategies you could devise and implement. There was a sense of concrete control that brought comfort, even during challenging times.
But the financial markets are a different beast. Their inherent volatility, combined with external factors often beyond individual control, can foster feelings of vulnerability. Unlike your business, the market offers a daily update on your wealth’s value – a regular roller coaster of highs and lows.
As your financial and social life changes, you begin to experience a sense of uncertainty and uneasiness. Your experiences are different than you pictured in your mind initially. You thought all your worries were over; however, they just changed. Now, you’re yearning for more money, but you know that chasing after wealth to remedy newfound anxieties can be a never-ending pursuit.
So what’s behind this feeling of financial insecurity when you thought you’d be set? Here are four reasons.
1. Scarcity Mindset
Witnessing the financial strains of those close to you can be unsettling. Concerns can creep into your mindset, especially if you feel your wealth was created out of luck rather than sheer competence. You may worry that you don’t have the acumen to manage and maintain this wealth for the long haul.
Growing apprehensions can lead to a defensive, almost wary approach to protecting your family’s wealth. But, as I always say, a “prevent” defense only prevents you from winning.
When you drift into a scarcity mindset, your financial strategy starts to shift. Instead of seeking growth opportunities, there’s an overriding sentiment of caution. The relentless trio of spending, inflation, and taxes quietly chips away at the principal. You’ve become too scared to try and earn a higher rate of return necessary to grow your wealth.
In other words, without realizing it, your strategy becomes, “I’m willing to lose as long as I don’t know about it.” You might rationalize it, thinking, “Perhaps I might not bear the brunt of the losses. It’s the future generations that might have to face the music.”
However, it’s crucial to remember that developing these feelings of self-doubt is a normal process for most people. Many, even those in the highest echelons of financial success, grapple with similar concerns. Recognizing these fears and confronting them, with the guidance of financial experts, can set the stage for a future of growth, rather than just preservation.
2. Comparing Yourself to Others
Wealth, for many, is a relative concept deeply influenced by our environment and the company we keep. When you label yourself ‘wealthy,’ it’s often in comparison to the people from your past or those in your immediate surroundings.
Yet, as you ascend the ladder of affluence, so does your vantage point. The neighborhood you reside in, the car you drive, or the vacations you indulge in all evolve, subtly shifting your reference group. Now, you’re among individuals who seemingly possess wealth far exceeding yours. You say to yourself, “If only I had $X million more, I would feel secure.” But we know this will not be the case because if you have $X million more, your reference point will change again.
As Chris Rock said, “If Bill Gates woke up with Oprah’s money, he’d jump out a window.”
The perpetual game of comparison is the enemy of contentment. It’s a diversion in which you’ll find yourself trapped by your belongings as they take control of you.
Whether you are rich or poor, most people are simply trapped in measuring what they have against an arbitrary set point. Recognizing and breaking free from the confines of comparison can pave the way for a more fulfilling and centered life.
3. Feeling Important
Society places a “status” on professional and financial achievements. It’s what makes us feel important and valued in the world and our circle of friends and colleagues. This external validation, tied closely to our careers or businesses, can intertwine with our self-identity. Consequently, when one transitions from a longstanding profession or sells a business, it’s not just the daily routine that’s disrupted; there’s also an internal recalibration. In separating from the status we’ve worked hard to achieve, a sense of loss can emerge, making us feel diminished or less esteemed.
That innate desire to be seen and recognized is fundamental to human nature. We yearn for the feeling of importance and value and resist insignificance.
4. Lifestyle Creep
Our newfound affluence often leads us to recalibrate our lifestyles, sometimes beyond what we initially envisioned. What we once considered luxuries quickly become necessities, and our spending habits evolve, trying to fill voids with material acquisitions. Yet, as many soon discover, possessions often bring transient happiness followed by unexpected burdens and costs.
With newfound wealth, there’s also an external pressure, albeit subtle, to “fit in” or even surpass those in our immediate circle. But the reality? Those around us rarely measure our worth by what we possess. And if they do, they’re likely acquaintances rather than true friends.
As my dad used to say, “These people don’t pay your bills, so why does their opinion matter?”
Putting Financial Anxiety in Perspective
So, how do you overcome financial insecurity? Well, first, acknowledge that it is hard. We all harbor deeply rooted beliefs and attitudes about money formed through personal experiences, cultural norms, and societal pressures. But you have become successful because of your willingness to take chances, work hard, grow, and change over time. This, too, will take effort. So here are a few things to challenge you to move in the right direction:
- Choose Your Friends Carefully: Surround yourself with individuals who encourage growth, authenticity, and genuine happiness, not ones who constantly compare themselves to you or others and try to outdo each other by buying stuff. The keep-up is a never-ending hamster wheel. If your friends are not providing the help or support you need, it’s time to consider expanding your circle.
- Work on Your Self-Worth: We are products of our environment and learned beliefs. By consciously altering our environment and regularly challenging our perceptions, we can reshape our self-worth and view of success.
- Instill Confidence in the Next Generation: You must first believe in yourself and then pass it on to your children. Teach them that their worth isn’t tied to their bank accounts but their character, values, and contributions to the world. This will help them more in life than any money you can provide.
- Seek Purpose Beyond Wealth: Use your dissatisfaction to make yourself, your family, or your community a better place. Stop worrying about your money and stuff and work to focus on the important things to keep your mind occupied. Engage in community service, learn a new skill, or mentor someone. When we find meaning outside of materialism, we often find genuine contentment.
At a conference, I once heard a psychiatrist make a profound statement: Poor people believe if they only had money, their problems would be solved, and rich people know otherwise. He went on to say that irrespective of our financial standing, we all grapple with similar challenges and insecurities.
In the end, we are all just constrained by our own thinking. Our discontentment should never result from the gap between what we have and what we want. Instead, we should strive to close the gap between our true potential and the growth we’re capable of.
I leave you with this from Dan Sullivan of Strategic Coach: It is about progress, not perfection.
Rx Wealth Advisors is a physician-focused financial advisory firm. Their primary focus is to help medical doctors maximize their earnings, keep more money in their pocket, and cultivate wealth so they can live the life they’ve earned and deserve. Rx Wealth can be reached at 412-227-9007, via email at email@example.com, or on the web at rxwealthadvisors.com.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.