Part 2/10:
The Horizon Effect is a psychological phenomenon where wealth seems perpetually just out of reach. No matter how many financial milestones you hit, the definition of "rich" seems to keep shifting further away. A notable example comes from a Charles Schwab study where respondents indicated that one needs around $2.2 million to feel wealthy. Astonishingly, many respondents who had over a million in net worth still did not report feeling financially secure. This incessant focus on what you lack versus what you already possess can create an ongoing sense of inadequacy.
To combat the Horizon Effect, here are actionable tips:
- Define a Rich Number: Write down a specific figure that represents financial comfort for you.