Wealth is relative, we usually confuse it with “having Money”, you can be extremely wealthy will only a penny in your pocket or dead broke with a million dollars in the bank! The guy you see with tatard shoes unshaven and with crappy dentition may just have loads more of that wealthy and that un-quantifiable item we all crave for “Happiness”. Can you place a price on happiness? This is the key index of your general wealth.
In this post we will focus on those wealth attributes we can more easily quantify. So what is wealth? Here are a few definitions:
Wikipedia: Wealth is the abundance of valuable resources or material possessions. The word wealth is derived from the old English weal, which is from an Indo-European word stem. An individual, community, region or country that possesses an abundance of such possessions or resources is known as wealthy
Investopedia: Essentially, wealth is the accumulation of resources. People are said to be wealthy when they are able to accumulate many valuable resources or goods. Wealth is expressed in a variety of ways. For individuals, net worth is the most common expression of wealth, while countries measure by gross domestic product (GDP) or GDP per capita Read more: http://www.investopedia.com/terms/w/wealth.asp#ixzz2JJtSeYuz
Let me build a scenario close to home: You may have a small family (2 Kids and your better half or worse half as the case may be!), you just finished an ivy league MBA (you wish!) you have a job, so does he/she, you pay a house maid to monitor the kids, you don’t own your house (you pay rent) but have land in Egbeda (OK in a better place! Ikoyi or Lekki…), you have a car (is this an asset), loads of clothes & shoes you don’t use or need, you owe that peski neighbour and the Bank some money. You expect an upfront payment next month from your employer to help pay school fees and rent and ……….. I am sure you get the general picture. So, the question is; Are you Wealthy? From the definitions above it seams “Networth” is a reasonable proxy for wealth. The attached template will assist you to calculate your Networth aka Wealth. Fill in the blanks to build your Networth, please be honest and reasonable. So how do you calculate and monitor your networth? You will quickly realise how your current lifestyle (eating out, cinemas etc) may significantly affect your future wealth; But hold on! Isn’t watching movies and eating out also increasing my happiness and therefore increasing the intangible and arguably more valuable aspect of my wealth? The simple and honest answer to these questions is “We don’t know” or as politicians and professors may say “It depends” Enjoy the template and please send your feedback: