You Are Rich
It might not feel like it, but there’s a good chance you are richer than 99% of the world.
The hedonic adaptation theory suggests that humans quickly revert to a stable level of happiness after any positive or negative life changes. For example, you might be pleased with a raise for a while, but it will soon become the new norm, wiping away any gains in happiness¹. While generally comparing yourself to others is a bad idea, it’s a great way to put your financial well-being into perspective. So, how rich are you really?
The definition
Merriam-Webster defines rich as “having abundant possessions and especially material wealth.” It’s a good dictionary definition, but it’s somewhat lacking in specificity. The trouble is, specific definitions are pretty hard to come by.
The poor
As a way around this, we could say that being rich means not being extremely poor. World Bank’s international poverty line is $1.90/day in 2011 dollars. It’s a pretty terrible definition of rich, and yet even that is too steep for 736M people (10% of the world’s population).
Of course, poverty varies significantly across countries. For example, based on a national definition, 82.3% of South Sudan’s population is extremely poor (i.e., lives on less…
