‘If you’re so smart, why aren’t you wealthy? A friend asked me a long time ago.
What do you mean by being wealthy? I questioned.
After some thought, he answered, “Being wealthy means able to afford flying in the first class, owning a yacht and a private jet, having a mansion in the most affluent neighborhood, affording membership in a country club and never having to worry about money.
That’s quite a lofty standard to be called wealthy, so I did my own research on the subject. I found out that defining ‘wealthy’ was as esoteric as defining ‘God’ or say, finding ‘meaning of life.’ Everyone has his/her own definition of “wealthy.” Some say it’s $1 million, others say $100 million. Some say it means making more than your brother-in-law. Others say it means not having to work without robbing a bank.
A survey from UBS shows that most investors say “wealthy” means $5 million—with at least $1 million of that in cold, hard cash. And yet almost half also said that being wealthy was about enjoying life’s experiences and being able to afford what you want.
According to The Millionaire Next Door: The Surprising Secrets of American’s Wealthy, a book by Stanley and Danko, it’s a simple calculation based on one’s net worth.
1. Multiply your age times your realized pretax annual household income from all sources except inheritances. Divide by ten. This, less any inherited wealth, is what your net worth should be.
2. For example, if you are forty-one years old, make $143,000 a year, and have investments that return another $12,000, you would multiply $155,000 by forty-one. That equals $6,355,000. Dividing by ten, your net worth should be $635,500. If you are in the top quartile for wealth accumulation, you are wealthy. That is, if you exceed $630,754.
The above formula is not very convincing to me. I think it’s more a matter of perspective. It depends on whether you’re judging yourself against your neighbors, your fellow citizens, or the entire world’s population. Just imagine this, just 62 people in the world have the same wealth as the poorer half of humanity. These 62 people are very, very wealthy, to be sure, but it’s also true that the global bottom half is desperately poor. And for that reason, who really counts among the wealthy — the top 100, the top 1 percent, the top 10 percent? It gets very complex.
According to Newsweek survey it was once the case that with $1 million in the bank, you’d be considered wealthy by most. But no longer. According to research by American bank Charles Schwab, that benchmark has risen, and you now need at least $2.4 million to be considered wealthy. The $2.4 million required to be considered wealthy is 30 times the $80,000 net worth of the average American household, according to the latest figures from the U.S. Census Bureau.
As I said earlier, it’s a matter of perspective. Simple sign of a wealthy person should be those who don’t have to worry about money or those who will never run out of money for his/her needs. So, being wealthy is also related to one’s needs.
In Hinduism Wealth is considered God’s eternal force. All the wealth of the universe arises from God through her actions only (Goddess of wealth is Luxmi). Wealth has numerous forms. Some of them are gross and some very subtle. The wealth of God manifests in creation in diverse ways as beauty, name, fame, status, light, success, victory, peace, happiness, strength, knowledge, wisdom, harmony, vigor, virtue and so on. All divine qualities such as truthfulness, non-injury, absence of anger, renunciation, compassion, etc., are collectively called divine wealth (daiva sampatti).
From a standpoint of life, wealth can certainly be measured in a much more profound ways than just how much money someone has made. So, my friend was right in questioning, ‘If you’re so smart, why aren’t you wealthy?