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Having Passive Income to Prevent a Life Deprivation is a Better Feeling than Having Lots of Wealth But Not Feeling You Have Enough

The Woke Salaryman did a comic strip to explain why some rich people will never be happy.

I can identify with this article because they frame nicely a “disturbance in the force” that I cannot explain very well.

The Woke Salaryman feels that wealthier people can never be happy because there is always some higher attainment that their peers have reached.

They fear they may never get there, affecting their overall outlook.

The question is: Where is this ‘there’?

How do we define there?

The Woke Salaryman identifies two kinds of deprivation: Absolute and Relative Deprivation.

The Difference Between Absolute and Relative Deprivation.

In the grand scheme of things, absolute deprivation has universally approved markers if we take a step back. We need the base layer of Maslow’s hierarchy of needs.

This means we are not deprived of the following:

  1. Breathing, food, water, sex, sleep, homeostasis, excretion
  2. Security of body, of employment, of resources, of morality, of the family and for health

If we survey a group of humans with different backgrounds and financial means about whether it is good to be deprived of such things, a very large chunk of the people will disagree that we should be deprived of such things in the modern age.

Absolute deprivation should be a clear avoidance, under the most sensible metrics.

Another kind of deprivation borns out of comparing to another person, group of people, in different regions, in different income groups.

They have a certain lifestyle, which you don’t have currently, and some have so rich of a lifestyle that you fear you won’t have.

This is relative deprivation.

In Telegram chats, and in real life, I hear the constant debate and advice not to compare to others, to practice having more gratitude about what you already have in your life.

Financial Security Versus Financial Independence

If we reference my Stages of Wealth chart:

10 Stages of Wealth | Financial Security | Financial Independence | Financial Freedom

There is a distinction between building up our financial resources so that we can secure a conservative cash flow to provide for our annual basic survival expenses and current expenses.

The former is to prevent absolute deprivation, if we stop work, or cannot work and the latter is not just that degree of deprivation but also providing for our lifestyle.

In my opinion, basic financial security, even at stages five and six may shore up absolute deprivation and those stages are appealing enough to attain.

The Pervasive Mindset: Any form of Deprivation is Bad

Here is the dark secret, once you experience or know of the existence of a certain lifestyle, you will think deprivation is not good.

So in our financial independence planning, we HAVE to secure that in a conservative manner with our passive income.

The problem is with quite a fair bit of lifestyle, is deprivation of that lifestyle healthy or unhealthy is so debatable.

Is provision for your child’s tuition from secondary to junior college essential?

Should we be deprive of a five-room HDB flat straight out of university?

Does not being able to afford a 20-table wedding banquet for most a sign of absolute deprivation?

Some would say the line between relative and absolute deprivation is weak but in my opinion, it should be more clear cut:

We should all be able to agree upon what lifestyle human beings should not be deprived of.

There should be grades to lifestyle and there should be an essential amount for food, and a premium good-to-have amount.

In 2019, Lee Kuan Yew School of Public Policy released their research on the household budgets necessary for older people to meet their living needs. It comes up to $1.3k to 2.3k, depending on whether you are single or a couple.

We are not saying whether that is accurate, but we should be able to agree upon what we should not be deprived of with less ambiguity.

Having a Wealth Machine that Prevents One Deprivation is Better Than Depriving of Everything

In financial independence planning, we should look at alleviating different levels of deprivation, create different milestones, and talk about attaining the first level and then following by the next:

  1. A wealth machine that provides cash flow to prevent some deprivation.
  2. A wealth machine that provides cash flow to prevent most deprivation.
  3. A wealth machine that provides cash flow to prevent all deprivation.

This framing is a way of practising gratitude.

Related: Why Wealth Machines are Important to Building Wealth Wisely

Knowing that your wealth alleviates some deprivation extremely well is better than owning a lot of wealth but not feeling secure because your wealth doesn’t secure ALL of your lifestyles.

There is too much fear about the failure to secure cash flow for all expenses because any deprivation is an absolute failure of the plan.

I think if you are sensible and you reflect upon this, you will agree with me.

But you may have to reframe how you think about the different degrees of deprivation and contentment.

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Wednesday 8th of March 2023

I've got a lot of wealthy friends, a couple are billionaires. But whether they are multimillionaires like me or much wealthier, in general they are very happy people who don't compare themselves with others.


Tuesday 7th of March 2023

Very wise, Kyith! Great way of framing.


Sunday 12th of March 2023

Thank you Aaron!

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