What’s your definition of rich?

July 18, 2011 — Leave a comment

John D. Rockefeller amassed over $1 Billion dollars in his lifetime. Today, that would equal almost $315 Billion and you have to combine the current top 9 richest people in the world to surpass his total!

When a reporter asked him how much money it would take to make a man happy, he said, “Just a little more.” Can you relate to that?

It’s common for most of us to think we’d be happy if we had more money. If we were rich, we could make our problems go away. If our money was limitless, we could do what we wanted in life.

The only problem is as we get closer to our original idea of rich; the bar gets a little higher. When I was young, I thought $10,000 could make my problems go away.

Now that number has grown. If we’re lucky, we’ll someday hit our old definition of rich but only to realize we don’t feel rich! It’s always just outside of our reach, no matter how much we make!

Are people who win the lottery rich?

People are always amazed how lottery winners and professional athletes can receive huge amounts of money and can go bankrupt a few years later. They don’t have discipline with money and soon they blow it all.

We swear this would never happen to us. We would manage it and live a life of ease.

Unfortunately, most Americans would blow the opportunity. Much like the Swedish study in 1981 where 93% of drivers said they had above average driving skills, a majority of us think we have above average money skills but we actually don’t!

Since this is the case, it’s hard to describe rich as a dollar amount.

In David Landes’ Wealth and Poverty of Nations, a merchant banker of the Persian Gulf described rich as something more than a sum of money.

He said:

“Rich is education..expertise…technology. Rich is knowing. We have money, yes. But we are not rich. We are like the child who inherits money from the father he never knew.

“He has not been brought up to spend it. He has it in his hands; he doesn’t know how to use it. If you do not know how to spend money, you are not rich. We are not rich. Without this knowledge, this understanding, we are nothing. We import everything. The bricks to make houses, we import. The men who build them, we import.

“You go to the market, what is there that is made by Arabs? Nothing. It is Chinese, French, American… it is not Arab. Is a country rich that cannot make a brick, or a motorcar, or a book? It is not rich, I think.”

So how does that apply to us?

It should alert you that rich is not an amount of money or a total net worth, but a whole different mindset.

If you have tangible skills that are transferrable to an occupation or activity that creates money for you, you might be rich.

In fact, you are probably richer than the lottery winner who holds his wealth in a bucket full of holes.

Rich is better measured as future potential than a current snapshot. Rich is also a mindset.

Maybe you’re rich if you have everything you want in life. This could include a great job with a salary you can live within, the ability to serve others, or a happy and healthy family.

Maybe being rich is having what you need and not longing for what you don’t. I’m sure the lottery winners who went broke prayed for a lottery win many times. However, as Oscar Wilde said, “When Gods wish to punish us, they answer our prayers.”

I defined my money philosophy to help me prioritize what’s important in my life and to put money in its place. I stress the importance of goal setting so you don’t just continually increase your definition rich as you make more money. You can also use the money tools to help you track your spending and create a budget.

When you orchestrate your life plan, you should identify how much money you’ll need to accomplish your goals. This will help you keep financial perspective.

Has your definition of ‘rich’ changed throughout the years? I’d like to hear your story in the comments.

 

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