The Poor Millionaire

Sanjib Saha

HOW WE SPEND DEPENDS on how we feel about money.

To be sure, we’re supposed to spend according to our financial situation and needs. But life experiences can so badly distort our attitude toward money that our financial decisions end up being ruled by fear and insecurity rather than questions of affordability. Such is the case with an acquaintance—let’s call her Satee—whose money habits are at odds with her financial standing.

Satee grew up in a typical Indian family of four. Her working dad was the family’s primary breadwinner and financial decision-maker. Her homemaker mom put most of her energy into raising their two kids and taking care of the house. In their family, the financial and nonfinancial responsibilities were clearly divided between husband and wife.

When Satee got married, she envisioned becoming a homemaker instead of a moneymaker. She wanted to be a supportive wife, a loving mother and a responsible daughter. Handling money was neither appealing to her nor on her list of responsibilities.

Satee’s husband was professionally successful and financially savvy. They moved to the U.S. and had two children. They bought a house, saved for retirement and set aside money for the kids’ education. Everything was falling into place, just as Satee had hoped, except for one problem: Relationship and trust issues soured their marriage.

Long story short, Satee went through a messy and conflict-ridden divorce that dragged on for months and turned her world upside down. A property settlement was eventually reached, but the bitter memories and fear of uncertainty remained.

Satee took a while to accept her new role as head of a household with two school-age children. To get through the rough patch, she turned to the local community for emotional support. She met my wife through a mutual friend and quickly formed a bond with her.

A few years later, she connected with my wife again. This time, she seemed happy and settled. She had some money questions and my wife asked me to help. Satee and I chatted a few times, going over some financial basics. She was keen to learn more.

Satee focused a lot on ad hoc, short-term money decisions. She had no clear long-term financial picture. Instead, she was consumed with keeping a tight lid on her spending. Her modest lifestyle left no room for indulgences or even small niceties.

I couldn’t tell if the scrimping and excessive penny-pinching were out of necessity or insecurity. Her financial situation didn’t seem so dire. She owned a paid-off single-family house in a good neighborhood, had a decent job with a six-figure salary, and the kids had fully funded education accounts.

On my insistence, Satee figured out her actual annual expenses for the past few years. It took her a lot of time to come up with the numbers—not because she was unwilling or shirking, but because her finances were overly complicated with multiple accounts. It was no wonder she lacked a clear picture of where she stood financially.

With some help and handholding, Satee finally managed to get the numbers. Her actual spending in each of the past three years turned out to be far smaller than the number she’d fabricated in her head. I wasn’t too surprised. She behaved financially as if she was in poverty, and I knew that wasn’t the case.

Evidently, Satee was underspending and over-saving. The next question I asked: Did she need to save so much? To answer that, she needed to take stock of all her financial assets. Once again, this simple step took longer than it would for most people.

As with her spending accounts, Satee had too many financial accounts, including savings accounts with several local banks and credit unions, high-yield money-market accounts and certificates of deposits with various online banks, a couple of brokerage accounts, retirement accounts from current and past employers, and so on.

Once she located all her financial accounts and reestablished online access, she gave me a call. I asked Satee to go through each account and enter the balance on a spreadsheet—a step she’d never done before. I then asked her to add the numbers up.

At first, Satee didn’t believe the result. Per the spreadsheet, she was already a millionaire in her early 40s, without including her home equity, kids’ education funds and other assets. She double-checked each account. She was hoping to get a different answer, but the numbers didn’t lie. It was clear she didn’t need to save so aggressively.

Will the revelation change anything? Will Satee allow herself and her family occasional splurges? Or will she continue to let money rule her life and continue to get worked up about every unexpected expense, no matter how small?

I certainly hope Satee strikes a better balance between spending and saving, but I wouldn’t bet money on it. Her profound financial insecurity took root during the years of emotional turmoil and uncertainty that followed her marriage’s collapse. It will likely take more than a household balance sheet to overcome her fear of spending.

Sanjib Saha is a software engineer by profession, but he’s now transitioning to early retirement. Self-taught in investments, he passed the Series 65 licensing exam as a non-industry candidate. Sanjib is passionate about raising financial literacy and enjoys helping others with their finances. Check out his earlier articles.

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