cancel
Showing results for 
Search instead for 
Did you mean: 
     
Highlighted
Participant ○○○

OT: Definition of Wealth

Help me please.  What was the saying?  If your income exceeds your needs, you are rich.  If your income falls short of your needs, you are poor.  Something like that, I can't remember.

Money helps, but there are more important things.  Health, family, peace of mind, good values, wisdom, education/skills, etc.

What matters to me is whether I have achieved my goals; which only I and my wife know.

https://money.usnews.com/money/personal-finance/family-finance/articles/are-you-rich-how-the-wealthy...

0 Kudos
56 Replies
Highlighted
Participant ○

Re: OT: Definition of Wealth

As I have always known, true wealth cannot be measured in dollars or in the material things we possess.

 

What does it mean to be wealthy? Most financial advisors will give you a narrow definition - it’s all about how much money you have. Wealth equates to "an abundance", but if money is prioritized above all else so many other important things are sacrificed.

For example what’s the point of having money if you’re so busy you can’t do the things you want to? Why have a beachfront vacation home but no friends or family to share it with? Why worry so much about retirement if when the day finally comes you'll be too sick to do anything but lay in bed hooked up to tubes?
 

A Brief History on Wealth

The word ‘wealth’ derives from an old English word that meant happiness or well-being. We know, intellectually, that monetary wealth isn’t the same as well-being—but many people in modern society act as if money really can buy happiness.

Philosophers have seen the dichotomy between the accumulation of material wealth and actual well-being for thousands of years. There’s remarkable agreement between such diverse thinkers as Confucius, Buddha, Jesus, Plato and Socrates—they all urged followers to avoid the pursuit of wealth simply for wealth’s sake and to be aware of the other factors that contribute to an exceptional life.

Time, Freedom, and Having Options

In modern society, most people sell their time for money. There’s a Chinese proverb that says that while an inch of time is worth an inch of gold, you cannot buy an inch of time with an inch of gold. And Socrates also warned “beware the barrenness of a busy life.” So if you spend all of your time making money, can you be wealthy?

One hundred percent of the time you spend accumulating wealth is time you’ll never get back. If all you do is work, no matter what your effective wage is, in terms of time and freedom you are poor.

Having an abundance of time to spend doing things you enjoy, including spending time with family and friends, contributing to making the world a better place and cultivating your own interests is one of the oldest, and perhaps most accurate, ways to define true wealth.

Options are a powerful thing in life. Having the ability to choose between two jobs, where to live, and the confidence to say ‘No’ when negotiating plays a major role in attaining your own version of happiness. 

 

Family and Friends

There’s ample evidence from scientific studies that the happiest people are those who have a strong network of connections with both family and friends. Yet aggressively pursuing material wealth often comes at the cost of relationships with both friends and family. Whether it’s because you spend every moment working in an effort to earn more or because you’re so frugal you never want to go out with friends, neglecting your relationships while building your net worth isn’t a good investment in overall well-being.

Health

Sure, there are some health problems that money—or at least good health insurance—can solve. But both my husband and my mom died in the past three years from cancer that no amount of money would have cured. That’s extreme, but there are thousands of health problems, from recurrent migraines to chronic fatigue to inexplicable anxiety, that plague plenty of people in spite of unlimited financial resources. In fact, pushing yourself constantly to earn more can cause some of the health problems that then decrease overall well-being.
 

Safety

On Maslow’s hierarchy of needs, safety is the second highest priority for people, just above food and water. Many people take personal safety for granted but not having to worry about it is a form of wealth.

There are some ways money can buy you safety. You can pay extra to live in a nice area. At the extremes you could even hire a private security guard or live in a gated community. Money also gives you the ability to move if you need to.

But there are types of security that money can’t buy. If the city you live in isn’t safe—and this is common where there is extreme income inequality—you can’t buy the ability to safely ride your bike along the lakeshore.

On the other hand, many people (including me) feel more secure with a substantial financial cushion. That’s what emergency funds are all about—the peace of mind that you can get over the bumps that life tends to through at you. So this is a tricky one: financial means can buy a certain amount of safety and security, but true security often comes not from amassing a huge personal wealth but from building and investing in community that gives you not just money but also people to fall back on in hard times as well as a safe environment for everyone, in which you can safely let your first-grader walk to school alone.

Virtue

Having credibility, a solid track record, and a clean rap sheet translate into many good things in life. Once your reputation is tarnished you can’t easily get it back.

A farmer once said - “I want to live my life good and honest so when I’m old and sitting on my porch I can remember back and enjoy it all over again.”

Aristotle argued that wealth should only be pursued to further otherwise virtuous activities—for example, to support a family or to participate in political life. That’s a theme that comes up in many world religions as well—hard work and wealth should only be pursued by honest means and for virtuous ends. Simply accumulating wealth is universally rejected as a virtuous end.

Ironically, there is evidence that having material wealth makes people behave less morally. It’s not an illusion: people who drive expensive cars are in fact more likely to cut you off in traffic. Rich people are more likely to shoplift, cheat, commit adultery, drink excessively and even take candy from children.

So if living a virtuous life is the true goal—as both Confucius and Jesus would argue—having material wealth will act against you, even if you don’t neglect your health, family or free time in the process of becoming wealthy.

It may be that people who seek to accumulate money have a bigger “inner jerk” that makes them want to steal. Or just that having lots of money makes it harder to empathize with others and promotes a feeling of entitlement.

Youth and Beauty

Just like time, you can’t buy youth. Whether or not you can buy beauty is debatable—but most people would agree that while money can buy some beauty, there are limits.

Status

Real status is another form of wealth that many people seek. Status is your rank in society, how important you are, how respected you are, and how closely you are associated with the best institutions and traditions. People with high status may have name recognition, belong to a network of other high status individuals, and own lots of really cool boats. Sometimes being rich and letting people know it is a form of status.

In any case, attaining status directly translates into opportunities to earn money and do interesting things that ordinarily would not be available.

Don’t confuse status with “social status symbols” which are just brand name products that have a shiny marketing mystique tied to them. For example, maxing out your credit to buy a fancy car to make your friends envious is not a form of status, that is just a form of spending money (which reduces wealth).

Status doesn’t have to be flashy. Nobel prize winners are generally not the richest people around nor the best dressed. But the status derived from winning such a prestigious award puts them way ahead of people with the same net worth.

You don’t need to win a Nobel prize or the lottery to generate status. You could have a degree from a prestigious university or have a poorly-paid but well-respected profession (many religious leaders would fall into this category). Either way, status has real value and it feeds back into broadening your options and your network.

Self Investment - Education, and Experience

People who invest in themselves tend to do a lot better when it comes to attaining the other forms of wealth listed here. While people with advanced degrees and incredible resumes can still be broke on paper, they have wealth in the form of confidence, aptitude, credentials, and the ability to add value to the world.

Investing in yourself, specifically your ability to add value, is something to pursue throughout life. Getting the most value for your time (both in terms of wages and personal satisfaction) is a function of self-investment.

Formal education, like completing a degree is a great start but it doesn’t stop there. Adding value requires training and experience. It involves ongoing “lifelong” learning, sabbaticals, taking new and interesting jobs and generally seeking out new experiences that push you out of your comfort zone. And value isn’t just monetary. It might be learning to play the guitar so you can play for your friends at parties or building social connections that last a lifetime.

The key here is the investing in yourself should be about personal growth, not with the sole goal of increasing your earning potential. That might be a happy side effect of self-investment, but shouldn’t be the only reason to invest in yourself.

Wisdom

According to Plato, “The greatest wealth is to live content with little.” Eastern philosophy has a similar message about having the wisdom to recognize and be content with what you have. In fact, you could say that wealth is a state of mind more than a number in your checking account.

Part of “feeling wealthy” is in comparisons. I’m not, by American standards, particularly rich—but living in Nicaragua surrounded by people who earned, in a month, less than I do in a day made me feel mindblowingly wealthy.

There are many ways to build traditional wealth—some of which can take away from your overall well-being, others of which don’t, like being mindful of your expenses without being miserly. Pursuing a high net worth at all costs isn’t a smart way to live your life. It should be just one part of the equation in how you decide how to allocate your time. Because after all, time is the one asset you can never get back once it’s spent.

 

 

Highlighted
Participant ○

Re: OT: Definition of Wealth

Oh come on. Wealth has nothing to do with youth and beauty or family situations. It's strictly a financial metric.

It has to do with Financial Independence. If you have enough financial assets to carry on without working for money then you're FI and wealthy at some level.

You might still continue to work to pile up the millions, but you're wealthy enough at that point.

For retirees, if you're spending down your nest egg over 30 years, you might not be wealthy. What if you live 35 years longer?

If you're retired and still accumulating wealth on average, then you're in good shape, wealthy to some degree. This is what I aspire to...

Highlighted
Frequent Contributor

Re: OT: Definition of Wealth

Maybe it means that one doesn't have to think about money too much or at all as one enjoys one's daily life.:)

Yes, a sense of financial freedom and financial independence.

https://www.richdad.com/rich-vs-wealthy

I do think that wealth alone will not bring happiness.  True happiness in life is priceless.

0 Kudos
Highlighted
Explorer ○○

Re: OT: Definition of Wealth


@Learner wrote:

Help me please.  What was the saying?  If your income exceeds your needs, you are rich.  If your income falls short of your needs, you are poor.  Something like that, I can't remember.


Don't know how old a saying you have in mind, but are you thinking of these words from Mr. Micawber in Dickens' David Copperfield ?

"Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness.  Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery."

 

Highlighted
Participant ○○○

Re: OT: Definition of Wealth


@EtoileDuMatin wrote:

@Learner wrote:

Help me please.  What was the saying?  If your income exceeds your needs, you are rich.  If your income falls short of your needs, you are poor.  Something like that, I can't remember.


Don't know how old a saying you have in mind, but are you thinking of these words from Mr. Micawber in Dickens' David Copperfield ?

"Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness.  Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery."

 


Exactly, Etoile, that's it.  Thanks.  (For some reason, I was thinking that maybe Ben Franklin said something like that, but I was wrong.)

0 Kudos
Highlighted
Frequent Contributor

Re: OT: Definition of Wealth

I in no way wish to undercut Learner or Etoile, but the definition of "wealth" that has always resonated with me is that provided by the Stoic philosopher, Epictetus:

Wealth consists not in having great possessions, but in having few wants.”

Bob

Highlighted
Explorer ○○

Re: OT: Definition of Wealth


@GLI2019 wrote:

I in no way wish to undercut Learner or Etoile, but the definition of "wealth" that has always resonated with me is that provided by the Stoic philosopher, Epictetus:

Wealth consists not in having great possessions, but in having few wants.”

Bob


Hi Bob,

Oh, no problem here.  I was just trying to help Learner with the source of the saying he had in mind but couldn't immediately recall.  I also completely agree with your own quote from Epictetus.

I cannot, however, speak for Mr. Micawber on that point.  :-)

0 Kudos
Highlighted
Participant ○

Re: OT: Definition of Wealth

I'm not one who thinks that everything is relative, but Mencken was on to something about wealth when he said, "A man's satisfaction with his salary depends on whether he makes more than his wife's sister's husband."

John

Highlighted
Participant ○

Re: OT: Definition of Wealth

Reminds me of this story:

There was once a businessman who was sitting by the beach in a small Brazilian village.
As he sat, he saw a Brazilian fisherman rowing a small boat towards the shore having caught quite few big fish.
The businessman was impressed and asked the fisherman, “How long does it take you to catch so many fish?”
The fisherman replied, “Oh, just a short while.”
“Then why don’t you stay longer at sea and catch even more?” The businessman was astonished.
“This is enough to feed my whole family,” the fisherman said.
The businessman then asked, “So, what do you do for the rest of the day?”
The fisherman replied, “Well, I usually wake up early in the morning, go out to sea and catch a few fish, then go back and play with my kids. In the afternoon, I take a nap with my wife, and evening comes, I join my buddies in the village for a drink — we play guitar, sing and dance throughout the night.”

The businessman offered a suggestion to the fisherman.
“I am a PhD in business management. I could help you to become a more successful person. From now on, you should spend more time at sea and try to catch as many fish as possible. When you have saved enough money, you

could buy a bigger boat and catch even more fish. Soon you will be able to afford to buy more boats, set up your own company, your own production plant for canned food and distribution network. By then, you will have moved out of this village and to Sao Paulo, where you can set up HQ to manage your other branches.”

The fisherman continues, “And after that?”
The businessman laughs heartily, “After that, you can live like a king in your own house, and when the time is right, you can go public and float your shares in the Stock Exchange, and you will be rich.”
The fisherman asks, “And after that?”
The businessman says, “After that, you can finally retire, you can move to a house by the fishing village, wake up early in the morning, catch a few fish, then return home to play with kids, have a nice afternoon nap with your wife, and when evening comes, you can join your buddies for a drink, play the guitar, sing and dance throughout the night!”
The fisherman was puzzled, “Isn’t that what I am doing now?”

Highlighted
Frequent Contributor

Re: OT: Definition of Wealth


@Learner wrote:

Help me please.  What was the saying?  If your income exceeds your needs, you are rich.  If your income falls short of your needs, you are poor.  Something like that, I can't remember.

Money helps, but there are more important things.  Health, family, peace of mind, good values, wisdom, education/skills, etc.

What matters to me is whether I have achieved my goals; which only I and my wife know.

https://money.usnews.com/money/personal-finance/family-finance/articles/are-you-rich-how-the-wealthy...


           I believe it’s the four freedoms, want, worship, speech and fear.

0 Kudos
Highlighted
Frequent Contributor

Re: OT: Definition of Wealth

 

There was a Suadi Arabian Sheik visiting Florida who stated he would give a million dollars to be able to hit a five iron.

Suddenly, I realized I was a million dollars richer than I thought.

R48, posting from a Jack Nicklaus designed course/golf community

 

0 Kudos
Highlighted
Frequent Contributor

Re: OT: Definition of Wealth


@TheWizard wrote:

Oh come on. Wealth has nothing to do with youth and beauty or family situations. It's strictly a financial metric.

It has to do with Financial Independence. If you have enough financial assets to carry on without working for money then you're FI and wealthy at some level.

You might still continue to work to pile up the millions, but you're wealthy enough at that point.

For retirees, if you're spending down your nest egg over 30 years, you might not be wealthy. What if you live 35 years longer?

If you're retired and still accumulating wealth on average, then you're in good shape, wealthy to some degree. This is what I aspire to...


Atta boy, Wizzard...nothing wishy washy...straight to the point!

Enables one to be focused on such things...

Good luck getting there.

R48...or should I say, FI48...or StillFI75?

 

 

0 Kudos
Highlighted
Participant ○

Re: OT: Definition of Wealth

In matters of what wealth means, I fall back on my absolutely favorite book on the subject, The Millionaire Next Door, Thomas J. Stanley and William D. Danko. In addition a series of similar books by Stanley gave me indelible ideas of what wealth is and who is really wealthy.

One of the very clear statements about who is NOT wealthy: "Big hat, no cattle." Its what you own and not what you spend or earn. Lots of people spend a lot because their parents are subsidizing them, especially daughters.

Stanley defines one's expected net wealth as: "Multiply your age times your realized pretax annual household income from all sources except inheritance. Divide by ten. This, less any inherited wealth, is what your net worth should be."

"If you are in the top quartile for wealth accumulation, you are a PAW, or prodigious accumulator of wealth. ... To be well positioned in (this) category, you should be worth twice the wealth expected."

I think that they define this person as "WEALTHY".   :-)))

That's a bit hard to calculate if one is retired with no earned income. But if we use the amount we need to live each year and ignore other income: We ain't doing badly!!!!   :-)))

 

0 Kudos
Highlighted
Contributor ○○○

Re: OT: Definition of Wealth

@judger  Judger, The Millionaire Next Door is one of the very best financial books I have ever read.  As usual, I initially borrowed the book from the public library, but I liked it so much that I bought a copy for my library.  Simply a great book.  Apologies for going off-topic, but I really liked it.

0 Kudos
Highlighted
Participant ○○

Re: OT: Definition of Wealth

H.L. Mencken
“A wealthy man is one who earns $100 a year more than his wife's sister's husband.”
H. L. Mencken
 

Read more quotes from H.L. Mencken

0 Kudos
Highlighted
Participant ○○

Re: OT: Definition of Wealth

For me, wealth isn't a specific quantity or even a large quantity. Nor is it akin to H.L. Mencken's joke about it being a number that can be compared to the amount of money that other people have.

Wealth to me is money or other financial resources that allow me to continue or to improve the lifestyle and standard of living that I had during my core working years, prior to retirement. Add a reserve amount as insurance to cover unexpected events.

0 Kudos
Highlighted
Participant ○

Re: OT: Definition of Wealth


@retiredat48 wrote:

@TheWizard wrote:

Oh come on. Wealth has nothing to do with youth and beauty or family situations. It's strictly a financial metric.

It has to do with Financial Independence. If you have enough financial assets to carry on without working for money then you're FI and wealthy at some level.

You might still continue to work to pile up the millions, but you're wealthy enough at that point.

For retirees, if you're spending down your nest egg over 30 years, you might not be wealthy. What if you live 35 years longer?

If you're retired and still accumulating wealth on average, then you're in good shape, wealthy to some degree. This is what I aspire to...


Atta boy, Wizzard...nothing wishy washy...straight to the point!

Enables one to be focused on such things...

Good luck getting there.

R48...or should I say, FI48...or StillFI75?


Well, with the way things are going this year, I'm definitely "there" for the time being.

I retired at age 63 in 2013 and started maximal SS earlier this year at age 70. Together with pension/annuity income, I'm finding I have have excess income from those sources and am reinvesting a few thousand a month, on average, into various stock funds.

The only $$ withdrawn from my remaining tax deferred accounts actually goes to Roth conversions not spending.

The real reason for this apparently flush situation is that travel has been shut down due to the pandemic. Trips to Australia, France, Indonesia, and Austria for 2020 have all been cancelled or postponed until later years. And with the Rose Parade cancellation a week ago, we won't be doing our usual end of year SoCal trip.

So I'm just piling up reserves until better times present themselves...

0 Kudos
Highlighted
Participant ○

Re: OT: Definition of Wealth


@mlott1 wrote:

@judger  Judger, The Millionaire Next Door is one of the very best financial books I have ever read.  As usual, I initially borrowed the book from the public library, but I liked it so much that I bought a copy for my library.  Simply a great book.  Apologies for going off-topic, but I really liked it.


++++1

0 Kudos
Highlighted
Frequent Contributor

Re: OT: Definition of Wealth


True wealth is found in peace of mind not in riches.

Announcements