What Does Being Rich Mean to You Anyway?
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redjar / Flickr Money Magazine had an interesting article in the September 2010 issue titled "Do You Have What It Takes To Be Wealthy?" The article comprised of 15 questions aimed to tell you if, indeed, you have a good chance to be rich. I aced it (if you consider having a solid chance of being rich a good thing, that is), but what is the definition of being wealthy anyway? Is it just a number we call net worth? Or is it something else all together?
I was given a tour the other day of a $6 million dollar home. Apparently, the owner bought the piece of land for $4 million and spent $10 million building the custom house on the site. The property was gorgeous (duh!), but the owner couldn't have lived in it for more than three years and he lost $10 million in the process after considering not getting his asking price, agent fees, etc. when it's all said and done.
When you have that kind of money to lose, are you considered rich? (By the way, for those concerned, the owner moved to an even more expensive neighborhood, so this is not one of those overextended home borrower stories.) Miranda started an interesting discussion asking whether you are rich. She claims that your location and personal situation matters a great deal when it comes to the financial portion of the definition of being rich, but I believe it's more than that. I'd argue that being wealthy is much more than having, or earning a specific dollar amount.
Not Worrying About Money
This is much more than having a ton of money. Not worrying about money is more about the ratio of your spending and expectations versus your assets. Some people don't have enough with $12 million, but others can retire comfortably with much, much less. However much money you have, you cannot be wealthy when the worry of money is always on the forefront of your mind.
Having Loving Family and Friends
You might have money, but you aren't rich if you don't have anyone to spend it with. Being rich is also having someone to share your joy and sorrows, and it's having someone to have spend time with too. When you need a shoulder to cry on, can you actually buy one?
Having a Sense of Direction
You can have all the money in the world, but it's very difficult to enjoy life if you don't have a sense of purpose. We talk about finding a passion all the time, but to be quite honest with you, most people never listen. Some are simply too afraid to change their depressing jobs, they are too lazy to repair broken relationships, and they are too proud to admit their mistakes so they can start over. First of all, I don't think these people will be able to maximize their earnings power this way. Even if they could, how does having a bunch of money with a miserable life make them wealthy?
Being rich requires money. There is no doubt about it. But it's much more than that — so much more.
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While I agree "Rich" isn't a number - and has a lot to do with attitude - there is the reality that in this country - even if you live in alternative housing (don't own a home/pay expensive rent) and use alternative transportation (i.e.: don't own a car) there's the cost of staying healthy - and paying for health-care when you're not that can so easily upset the apple cart. I really wish I knew how to save appropriately for that unknown without living on pins and needles till I get there!
Richness means a lot to me. I want to be rich in which I wont think of too much savings and budgeting anymore. However, Im stick to this kind of life where I need to spend less and save more. How I wish I could get over with my personal finances.
I heard on the radio being content with your finances is relative to how you feel about what others have around you. Ie. if you have a new car and then your neighbor gets a new car that all of a sudden your car is not as special to you. Don't know if it's true but I do see a lot of keeping up with the jones to just collect more material goods.
David, well put.
You alluded to this when you said that being rich means having a sense of direction, but to me the below is important enough as a call out in it's own right:
Knowing that you can make a difference and leave a legacy when you are gone
“What you leave behind is not what is engraved in stone monuments, but what is woven into the lives of others.” Pericles (Greek statesman of Athens who died in 429 BC).
As we move through the ages and stages of life, we are bombarded by change, yet the life cycle is ever repeating (well at least until 2012 :}).
Understanding what those who came before me did to enable the life I have led caused me to wish to leave something behind for those who come after. Lucky are those who reach this point in time to led a purposeful life, in time to know what legacy they want to leave and in time to work towards leaving it. This to me, has to be part of any definition of richness.
It's a lifestyle to me. Not "having" to work to live. Doing what I want when I want (including work, vacation, etc.). And having people to share it with. Without all of that, you may be wealthy, but you're not rich.
I can agree on that rich isn't a number, it's entirely dependent on what kind of lifestyle that you have. In my opinion, you are rich if you have enough passive income to cover all of your expenses on a daily basis, without having to work physically.
Money don't make you happy, but neither do poverty.