Last week I was asked why, as a financial planner, I am writing about everything from happiness and parenting to dying and character development. The clue is in the subtitle of the blog, “Financial, economic and wealth related issues in the broadest sense of the word.” The origin of the word “wealth” is the old English word “wela” meaning welfare or well-being. As recently as a century ago the word was generally understood to mean a person’s all round well-being, including health, family, work and spiritual life. It is only recently that most people have come to define it strictly in financial terms.
However, formal definitions change quicker than our intuitive understanding of meanings. Most of us have met individuals whom we would regard as ‘wealthy’, although they didn’t have the proverbial “pot to pee in”. I recently met one such person who was an outdoor adventure guide, doing exactly what he wanted to do in life. He spent his winters in Colorado, alpine climbing and teaching skiing, and his summers in California, climbing and guiding outdoor adventure trips. He was an autodidact, who had amassed an enormous wealth of knowledge from reading and talking to his clients although, as far as I could tell, he lived out of the back of a minivan. I can also recall talking to a middle school teacher last year who considered he was doing the best job in the world, despite the low pay in a small private school without the advantage of California state benefits.
Similarly, we have all known individuals who own considerable financial assets but are miserable as people. Fearful that they will lose their wealth or have it stolen from them, they are naturally suspicious of all their relationships as well as fearful that they will not ‘have enough’. With no inner compass to guide them they always compare themselves to ‘others’ who have ‘more’, which just fans their feelings of insecurity and worthlessness. Few would describe these people as wealthy. Possibly then, the age-old definition of wealth in terms of a rich and satisfying life, is not as dormant as modern dictionaries would suggest.
In our firm’s financial planning or life planning process, one of the questions we always ask is “If you had as much money and resources as you could possibly want, what would change in your life? What would you give your time to?” The answer to these questions will reveal what wealth means to you. For example, it could mean power, love, security, happiness, control, independence, or countless other values. The answer could be a positive or negative value but it is usually different for everyone.
For what it’s worth, my experience is that financial assets alone don’t make a meaningful difference in the lives of most individuals. It’s not that financial assets don’t have the potential to significantly change the direction, texture and impact of someone’s life for the better. They definitely do. The problem is that this takes work, just the same amount of work as it would to change that person’s life without these assets. There is a big difference between being rich and living richly. If someone is not living richly without financial assets they will not know how to live richly with financial assets. The secret to living richly is to ditch all the superfluous baggage that is holding you back from fulfilling your potential with or without money. Only after this work is done can you begin to integrate your resources and your values and thereby unlock the awesome latent power of your net worth.
“For many men, the acquisition of wealth does not end their troubles, it only changes them.” Lucius Annaeus Seneca
“Surplus wealth is a sacred trust which its possessor is bound to administer in his lifetime for the good of the community.” Andrew Carnegie