Why things Feel Expensive: The Psychology of Wealth Tolerance™️

There are things I once considered ridiculously expensive that I now consider incredibly cheap. And I mean exactly the same thing, at exactly the same price, offering exactly the same service.

Nothing has changed about what I’m buying or what it costs. The only thing that’s changed is me, or more specifically, the way I think about money.

I find this fascinating because we tend to talk about things being expensive as though it’s an objective fact. We say something costs too much, or that we’d never dream of paying that amount, without necessarily questioning where that judgement has come from.

But expensive compared with what?

Our income? Our bank balance? What we’ve paid for something similar in the past? What our parents would have considered an outrageous amount of money? Or simply an internal idea we’ve developed over the years about what constitutes a lot of money?

This is something I’ve become increasingly interested in, and it’s what I think of as wealth tolerance™️.

By that I mean the amount of money we can comfortably contemplate, discuss, charge, receive, spend, invest or hold without having a significant emotional reaction to it.

And what’s particularly interesting is that our wealth tolerance doesn’t necessarily correspond with how much money we actually have.

In fact, I’ve seen something quite extraordinary: people with considerable wealth who are deeply uncomfortable with money, and people with very little who are completely at ease discussing millions.

Which raises a fascinating question. If it’s not the amount of money we have that determines our wealth tolerance™️, what is it?

I’ve met people with considerable wealth who still agonise over relatively small expenditures, and people running substantial businesses who become deeply uncomfortable when it comes to quoting their own fees. Equally, I’ve seen people who aren’t yet particularly wealthy but who are entirely comfortable discussing and making decisions involving very large sums of money.

So clearly, there’s something going on here beyond the numbers themselves.

Think about what happens when somebody tells you the price of something and your immediate reaction is, “That’s expensive!”

What are you actually responding to?

Because there’s a significant difference between deciding that something doesn’t represent good value and feeling uncomfortable simply because the number is larger than you’re accustomed to dealing with.

The first is a commercial judgement, and one that may be entirely sensible. The second is a psychological response, although we rarely recognise it as such because it feels every bit as rational as the first.

And this is where I think it becomes particularly interesting for anyone with significant financial ambitions.

If £10,000 feels like an enormous amount of money to you, how does that influence your ability to charge £10,000 for something? If £100,000 feels almost unimaginable, what happens when you’re presented with an opportunity that requires you to invest that amount? And if £1 million is a number that still feels extraordinary, how comfortably can you really contemplate creating a business that generates £1 million every month?

I’m not suggesting that you should spend money you don’t have, ignore financial risk or make investments without proper consideration. Quite the opposite. My background is in finance, and I believe very strongly in sound commercial judgement.

What I’m questioning is how often we believe we’re exercising that judgement when we’re actually responding to an internal narrative about money that we’ve never stopped to examine.

Because those narratives can be remarkably persistent.

We grow up hearing things about money, observing how other people respond to it, noticing what is considered extravagant, sensible, irresponsible or simply beyond our reach. We have our own experiences, both positive and negative, and gradually develop a sense of what feels financially normal to us.

And then, without necessarily realising it, we begin making decisions within those boundaries.

We might hesitate to increase our prices, not because the market won’t support them, but because we personally find the new price uncomfortable. We might dismiss an opportunity before properly examining it because the investment feels too large. Or we might set financial goals that seem ambitious but are actually carefully contained within what we already believe is achievable.

What’s particularly striking is that we can do all of this while genuinely believing we’re being realistic.

I can see the change in my own thinking very clearly. There are prices that would once have made me recoil, whereas today I can look at exactly the same offering and think it’s remarkably good value.

I haven’t suddenly abandoned my commercial judgement, and the service hasn’t magically become more valuable. I’ve simply changed the meaning I attach to that amount of money.

And once you notice that happening, it raises a rather bigger question.

How many of our financial decisions are being made according to the actual circumstances in front of us, and how many are being influenced by an internal definition of what constitutes a lot of money?

I think this is worth considering because we tend to assume that our relationship with large sums of money will change once we have more of it.

Once we’re earning £100,000, then £10,000 won’t seem so much. Once we’re earning £1 million, then £100,000 will feel more manageable. Once we’ve built a multimillion-pound business, then we’ll be comfortable making multimillion-pound decisions.

And of course, experience and financial security can change how we perceive those amounts. But I’ve seen enough to know that the psychological adjustment doesn’t always happen automatically. People can become considerably wealthier without ever really changing the way they think about money.

Which makes me wonder whether we’ve sometimes got the sequence the wrong way around.

What if becoming comfortable with larger sums of money isn’t simply a consequence of creating greater wealth, but one of the things that can influence our ability to create it in the first place?

Not because thinking differently somehow makes money appear, but because our relationship with money affects the decisions we make, the opportunities we consider, the prices we’re prepared to charge and the scale at which we’re willing to operate.

And those things have very real financial consequences.

So here’s something I’d invite you to consider this weekend.

Think of an amount of money that still feels enormous to you. Not because you couldn’t afford it or because spending it would be financially irresponsible, but because the number itself produces an immediate reaction.

Now ask yourself what would be different if that amount felt entirely normal.

Would you approach certain conversations differently? Would you be more comfortable asking for it, charging it, negotiating it or investing it? Would some of the things you currently consider financially ambitious begin to feel much more ordinary?

I’m not suggesting that every large number should feel insignificant. I don’t think that’s the objective at all.

But I do think there’s something extraordinarily powerful about reaching a point where you can look at a large sum of money without being intimidated by it, and make a decision based on its actual merits rather than your emotional response to the number.

Because perhaps one of the most important financial ceilings we have isn’t determined by how much money we can earn.

It’s determined by how much money we’re comfortable with.

And the rather wonderful thing about that is that, as I’ve discovered for myself, the price doesn’t have to change for your entire experience of it to change.

Beyond Realistic.

Into Extraordinary.

Guinevere Ellis
The Mind Director®