Abundance, Scarcity, and the Idea of Being Rich

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Whenever I read or hear things about getting rich, the first thing I always think of is how I don’t really understand what “rich” means.

Rich is a nebulous concept that means something different to each of us. For a lot of us, it means having some quantity of money, probably a large one.

But what does it really mean?

Does being rich mean that you have enough money to pay for every reasonable need you might have in your life? Does it mean that you have enough money to pay for every reasonable want you might have in your life?

Or does it mean something completely different?

Whenever I start thinking about what it means to be rich, my mind starts thinking about scarcity and abundance. I’ll quote from my earlier post:

The terms “scarcity mentality” and “abundance mentality” were coined by Stephen Covey in his best-selling book The 7 Habits of Highly Effective People:

“Most people are deeply scripted in what I call the Scarcity Mentality. They see life as having only so much, as though there were only one pie out there. And if someone were to get a big piece of the pie, it would mean less for everybody else.

“The Scarcity Mentality is the zero-sum paradigm of life. People with a Scarcity Mentality have a very difficult time sharing recognition and credit, power or profit – even with those who help in the production. The also have a a very hard time being genuinely happy for the success of other people.

“The Abundance Mentality, on the other hand, flow out of a deep inner sense of personal worth and security. It is the paradigm that there is plenty out there and enough to spare for everybody. It results in sharing of prestige, of recognition, of profits, of decision making. It opens possibilities, options, alternatives, and creativity.”

If you’re in the workplace and find yourself getting depressed because someone else got a raise, you’ve probably got the scarcity mentality. On the other hand, if someone getting a raise gets you excited because that means there’s a possibility of you getting a raise, that’s the abundance mentality at work.

If you’re at home and find yourself envious of some gadget someone else has because you don’t have one, you’re probably falling into the scarcity mentality. If you’re happy for a friend because they have something they want and you’re also content with your own possessions, that’s probably the abundance mentality.

To me, the biggest difference between the scarcity mentality and the abundance mentality is that the scarcity mentality cares what other people have, while the abundance mentality doesn’t.

Here’s where we come back to the concept of “rich.”

If you have a scarcity mentality, it is almost impossible to be rich. There is always someone out there that has more than you do and since you’re constantly comparing yourself to others, you feel as though what you have is inadequate. That other guy has more than you, thus you can’t be rich.

On the flip side, if you have an abundance mentality, the idea of being “rich” has a very low threshold. As long as you’re able to cover your basic needs and perhaps a few wants, an abundant-focused person feels as though they’re rich.

I’ll explain what I mean using my own life as an example.

I love to read. For a long time, I was trapped in a scarcity mentality, where that love of reading often expressed itself by the size of my book collection. I could never get enough. I would be jealous of the books that others had and I’d pick up books if I even had a vague sense that I would ever read them. I had a scarcity mentality and I’d never, ever be rich with my books.

Now, as long as I’ve got the book I’m reading and a book on the bedside table, I’m happy. My bookshelf looks positively anemic compared to the bad old days. When I think about my book collection, I think about the books I’ve read, not about the books I own. The value isn’t in the collection, it’s in the experience, and that experience is inexpensive and ever-abundant thanks to libraries and other resources.

It’s simple, in a broader sense. There are more interesting and exciting things to do that cost virtually nothing than I will ever have time to do. There are books to read, people to meet, woods to explore, movies to watch, meals to make. There will be teachable moments with my children, romantic moments with my wife, and fun moments with my friends.

I have enough financial stability to enjoy all of this for quite a while.

Does that mean I’m rich? I think it does. I’m not rolling in money, but I have more than enough of the things I need and value.

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13 thoughts on “Abundance, Scarcity, and the Idea of Being Rich

  1. “As long as you’re able to cover your basic needs and perhaps a few wants, an abundant-focused person feels as though they’re rich.”

    A previous post was about not fooling yourself into thinking your financial position was better than it really was. You warned not to trust the ideas you had in your mind–it would trick you. For the type of person described above, aren’t they just tricking themselves about the reality of their financial shape? At the first major illness, job loss, or other catastrophe, that illusion of abundance is going to burst.

  2. what about the case where there is only one promotion available? somebody is going to get it and everyone else won’t. i think most people have the scarcity mentality because that is the way life is. otherwise we’d all be be rich CEOs jet setting to france to eat cavier every weekend rather than working hard and getting farther into debt. real incomes for working people have been flat since the 70s. thats why the scarcity mentality is rampant!

  3. I tend to agree with Chuck, but not sure if that’s being defensive about having a scarcity mentality or not. The example I came up with was how getting hired for teaching positions in my province often works.

    Many times people get hired based on who they know and what connections they have rather than which person is the best qualified for the position.

    This is a situation I feel it is right to bring to the attention of superiors and feel crummy about how the system works rather than being all rainbows and unicorns because a colleague got a job.

  4. Vanessa (#1) — I would assume that “basic needs” includes a healthy emergency fund, no debt, etc., based on Trent’s prior articles/general philosophy.

  5. jobs are scarce. how can you apply anything but the scarcity mentality to the job market? many jobs get hundeds of applications for 1 position. in an abundant mentality world the unemployment rate would be zero right?

  6. @chuck: It doesn’t have to be an all-or-nothing thing. I agree with you that it’s an outrage that the middle class’s share of the pie is becoming less and less. And plenty of people can’t afford to meet their basic needs, let alone any of their wants – to tell those people that all they have to do is switch from a “scarcity mentality” to an “abundance mentality” and suddenly they’ll feel rich, would be insulting.

    However, for most of us reading this blog, I think, there are areas in our lives that we can choose to view either from the perspective of either scarcity or abundance, because they make sense either way. We have more (books, money, friends, free time, whatever) than some people do, and less than others. So you can look at it either way.

  7. I love your statement”I have more than enough of the things I need and value.” Awareness of what is important to you. Knowing when to stop.Stopping when full.

  8. Actually I think the book example is a great one here perhaps because I’ve found it very much applies to me. I come from a family of book lovers, the sort of people who collect books, organize rooms around bookshelves, etc. At some point I realized that for me, this makes little sense. I live in (what is considered by contemporary US standards) a small house in a town with a number of good libraries (ranging from a nice public general audience library to a research I university library + related med. school library). All are accessible to me. I don’t need to own books, at least, not most books most of the time — and having realized this, I don’t, and it’s very freeing.

    On the other hand I have a friend who lives in a non-English speaking nation in a rural area. While he speaks the native language he also enjoys having and reading contemporary English-language literature and given his situation he can only get (much of) that by owning (buying) it. Though he & I basically value books the same amount, it makes sense that he spends much more money than I do on books.

    Moving beyond books and the two fairly extreme examples of me (small house, numerous good libraries) and my friend (virtually no free access to the books he wants to read), though, I’d guess for many of us the difficulty lies in figuring out which needs/wants/priorities fit where.

  9. I really don’t know if it is a scarcity vs abundance mentality. I think it is a level set of what you determine wants and needs. If you have a scarcity mentality, and things are needs, then you are going to be miserable. If you have needs which have an abundance mentality you are going to be miserable as well. However if you have scarcity mentality and things are wants, you are going to be miserable as well. However on the flip side, if you have an abundance mentality and all you have desires for are wants, then you might be content.

    Human beings are complex creatures and to say that they are driven by scarcity and abundance is really not really true. Diamonds are more populous on the planet and more readily available than many other precious stones. However due to perceived “limited supply” the price 5 times higher than other stones that are 25 times more rare. The major reason people are not happy I think is consumerism. Consumerism drives the market, which drives business, etc. But what is happening is companies have realized that people will shovel money into the fire just for the same thing instead of buying something that will last. This rampant consumerism is what makes people miserable as “I cannot buy this”. Well no crap – you only make $25k a year, and you want to spend 20% of your take home pay on a 64″ plasma TV because Joe Bob up the road who makes $100k has one.

    My dad, when he was 24, purchased his first TV. That TV lasted until he was well into his 40′s. I purchased my first TV when I was 21, and it lasted 3 years. My second was the hand me down from my dad (the one he got in his 40′s) and was 15 years old when I got it. That still runs, but I replaced it with a HDTV projection TV 8 years ago, and that is still running. So in my lifetime, I have purchased 2 TVs and had 3. I purchased (or family) high quality items I knew would last. I know people who have gone though a dozen TVs in that time frame spending $10k on them due to the fact they have to have the latest and greatest, etc.

    The biggest dichotomy is being content with what you have, or looking forward to the next thing. I am content with what I have. I don’t need the latest car, TV, what have you. People who do, well they are first adopters and keep the economy moving. However, first adopters need to be 5%, not 50% like most companies like, which makes it impossible when you look at economic and job/salary numbers of people. This is the same thing our government does. Spend money like we have more to have. Thus credit/debt issues.

  10. I’m inclined to see the abundance mentality as a creative mindset, whereas the scarcity mentality comes from multi-generational low income and lower educational desires and aspirations. The abundance mentality will recycle, upcycle, make the goods, the money, or the substitute for these, whereas the scarcity mentality is prone to fraud, theft, and predation. Abundance will see the old Ziglar principle that the prosperity comes with helping others, whether it is from commissioned sales, invention, distribution, or in one way or another enabling the abundance of others. Scarcity will believe that they can’t have it unless they take it away from someone else. Teaching personal finance is a real contribution to peace on earth, if others will learn and receive the message.

  11. Get real.

    Everyone knows what rich is. It’s when you have alot of money. If you have to ask how much is alot, then you don’t have it.

    Rich in friends, or abundance/scarcity. This is junk that people who aren’t rich come up with to make themselves feel better.

    This “I have enough” or “I am rich in relationships” or “I have the things I need and value” is bunk. So do rich people.

    It may make you happy, or content, or even blessed. But it doens’t make you rich. Only lots of money does that.

  12. I think 2 comments stood out to me as being very true:
    #16 Johanna – “However, for most of us reading this blog, I think, there are areas in our lives that we can choose to view either from the perspective of either scarcity or abundance, because they make sense either way.”
    and
    #10 littlepitcher – “I’m inclined to see the abundance mentality as a creative mindset, whereas the scarcity mentality comes from multi-generational low income and lower educational desires and aspirations. The abundance mentality will recycle, upcycle, make the goods, the money, or the substitute for these, whereas the scarcity mentality is prone to fraud, theft, and predation.”

    Wow, both are so true!

    As I was reading this post, I was thinking that, the more I get into project management, the more I would tend to hear a coworker’s (at my level) announcement of a raise as a zero sum (i.e. I’m less likely to get a raise), since there’s only one pot of money. That said, I’m also at a point in my life where I consider myself to be blessed with enough salary for needs + a small amount of wants… so I think I would feel genuinely happy for that coworker (so long as I liked him/her). So that’s a weird mix of scarcity and abundance – I assume it’s zero sum, but I feel “rich” (enough) so can put myself aside and be happy for him/her.

    I think I also have confidence in my creativity, as littlepitcher put it, to be able to make a different situation work out, and work out (in the end) well. Not to say I welcome that opportunity, I’ve had unemployment and crap jobs and they aren’t fun. But I have confidence that I can rise above and end up ok in the end, or make it better.

  13. There are a couple of mantras that I try to keep in mind along these lines. The first is “Happiness is wanting what you have.” The second is the prayer for serenity – “Grant me the serenity to accept the things I cannot change, the courage to change the things I can, and the wisdom to know the difference.”

    For myself it is a daily struggle to accept some unchangeable things. And the only area where I feel myself to be consistently poor is in time. I simply don’t get much – and in the last few months, it has been full of things that are necessary, but not conducive to present happiness.

    There is only so much time in a day. I don’t know how to view that precious resource with an abundance mentality at all.

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