What does it mean to be wealthy?

“Sorry, but to me, a billion is a million million and I won’t be persuaded otherwise. So, what, to you, is being wealthy?” writes Richard Templer in his bestseller The Rules of Wealth.

One common thing almost everyone shares is the “aspiration” to become rich, although for some this is more wishful thinking than an actual objective.

We often sing about wanting to become millionaires and travel around the world in private jets-or if heights scare us, cruising in superyachts. The million-dollar question, however, is: How much money do you need to consider yourself wealthy?

One important reason to answer this question, Templer says, is that like in every other human endeavour, only what is measurable can be achieved.

Also, while there are no right or wrong answers, understanding your definition of wealth can keep you out of the “rat race” and help you lead a more fulfilling life.

SOME COMMON MEASURES:

The N1 million mark-or more

In Nigeria where about 94.21 million people as at Thursday live in extreme poverty, currently measured as people living on less than $1.25 a day (according to World Poverty Clock), one million naira is a big deal and the hallmark of wealth to many.

For middle-income folks in professionals services who according to Coronation Merchant Bank research earn anything between N6 million to N8 million per annum, the magic number might be pegged at around N50 million.

Regardless of where the line falls, it is common practice to define wealth as a monetary benchmark. It is not impossible that as one’s financial status improves, the minimum definition tends higher.

The passive income measure

This perspective to wealth was popularized by Robert Kiyosaki, the author of Rich Dad, Poor Dad.

The Passive income theory simply looks at wealth in terms of what you earn on the average from an investment vs your average expenditure.

If for instance you have N1m in the bank and spend N100,000 per month, your wealth is 10 months. On the other hand, if you earn N200,000 each month from your investments and spend N100,000 (or N200,000 at most) per month, you have limitless wealth.

A variant of this can be defining wealthy by how much more you earn by the hour than you spend in the same period, on the average.

Living without care (Livin’ la Vida Loca)

If the second definition is complicated this is simpler. Wealth in this instance is living without worrying about the cost of living.

Templer puts it as: Having enough so you never have to worry about having enough.

Although arbitrary, this is a common and acceptable definition of wealth; being able to afford almost anything you want at any point in time.

The downside to this definition might the stark reality economists preach about human wants being insatiable and resources limited.

Since there is always an exception to a rule, the stars might align for you in that regard.

Assets Acquisition

The other definition you might hear people give to wealth is owning assets especially land properties whether it is a small property in the countryside or a sizable one elsewhere.

It might be more common with senior citizens, owning assets even with little cash at bank is enough for one to be deemed wealthy or consider oneself so.

Social Circle

In today’s world who you know matters and it is often said that one’s social circle or network determines one’s net worth.

One argument for this definition stems from the fact that privileges enjoyed by one’s relationship with an influential or well-to-do individual are sometimes invaluable.

Having highly placed persons as one’s friends or folks can help you access the world-as it were-on a platter of gold.

Health

A cliché you must have heard a thousand times is that health is wealth.

While a lot of people take this for granted, having a healthy body and mind at the very least saves you an unquantifiable amount of money in hospital bills, allows you make productive use of time and derive utility from being in a (near) perfect state.

Although not everyone loves this measure of wealth people often appreciate the wisdom from this perspective when a cold knocks them off their feet.