By JLP | October 23, 2007
Hi! My name is Meg, and I’m the new contributing writer here at AllFinancialMatters. I am very excited to be collaborating with JLP, and I look forward to sparking discussions on a wide variety of financial topics. I welcome your feedback and participation, so feel free to leave a comment with any suggestions, opinions, or concerns! I also write at The World of Wealth, which is all about (you guessed it) wealth. I hope you’ll visit me there as well to share insights and strategies for getting, having, and sharing wealth.
On that note, today I want to discuss what it means to be wealthy. This is important because if you don’t know where you’re trying to go, then you can’t know the best way to get there and you might not even notice when you’ve arrived. I, for one, am aspiring to be wealthy; presumably you are too or you wouldn’t be reading this. So what does wealth really mean?
The Dictionary Definition
I was going to start by saying that there is no concrete definition of the term wealth; then I decided to actually look it up. The first definition according to Dictionary.com is “a great quantity or store of money, valuable possessions, property, or other riches.” Other definitions include “an abundance or profusion of anything,” “all things that have a monetary or exchange value,” and “the state of being rich; prosperity; affluence.”
Well, that seems pretty straightforward, if ambiguous. None of those definitions offers a tangible understanding of what exactly constitutes wealth. Apparently wealth is a relative term, since “a great quantity” or “abundance” can only be distinguished by comparison (which implies that the easiest way to become wealthy might be to simply move wherever most people have less than you. Think about it.).
The Original Definition
The most interesting thing I found is that the origin of the word is the Middle English word “welth,” from “well-th.” Literally, wealth used to mean “the state of being well.” The dictionaries declare that definition obsolete, but I’m not so sure. Aren’t we all just seeking a complete sense of well-being? The college fund, the house in the suburbs, the designer clothes, travel, the retirement fund…what we are really striving for are the values those material things represent: health, security, affection, adventure, fulfillment, and so on.
Your personal definition of wealth will vary based on your values but also on other factors like the cost of living in your area, how many dependents you have, and any number of other variables. Everyone is going to have different goals and standards, and that’s OK. The point is that you need to identify your core values and turn them into concrete financial goals. Then, once you reach those goals, you will truly have achieved wealth.
I know some of you might be rolling your eyes at all this talk about values and well-being. But seriously, it makes financial planning so much more fun, empowering, and meaningful when you know WHY you want $10,000 in that account, a zero balance on that credit card, or $200 extra dollars in your entertainment budget each month. And it makes spending money less painful and guilt-ridden if you know you are consciously spending in accordance with your values.
Values don’t have to be boring and serious by the way! You might be at a stage in your life when you really value attention from the opposite sex. So plan your entertainment/shopping budget accordingly and feel good about it! You value hosting and entertaining others? Remodel that kitchen and sacrifice the vacation instead!
To me, wealth is ultimately about flexibility. I want to have choices about my relationships, what I do professionally, where I live, and how I spend my time. It’s also about security-I want to be able to financially weather any illness or catastrophe (including a stock market crash). Oh yeah–I also want designer clothes, a luxury car, a nice home in a good neighborhood and a million bucks in the bank “just in case.” Sure, I can’t have it all right now. But because I have a plan that is based on my true values, I’m well on my way. If you’re interested in seeing how my personal values translate into my specific financial goals, you can view My Roadmap To Wealth.
So tell me–what does being wealthy mean to you?