Six Types of Wealth
Six Types of Wealth
Author Jack Raines September 01, 2022
Wealth /welTH/ noun: An abundance of valuable material possessions or resources
Merriam-Webster Dictionary
Being rich isn't just a money thing. What comes to mind when you think of wealth? A list of America's ten richest people? Your neighbor with the bigger house, nicer car, and mountain home in Aspen? The multimillionaire CEO of your company? The professional athlete, musician, or movie star?
Sure, all of these people are, in a financial sense, "wealthy."
But money doesn't have a monopoly on wealth. Wealth is defined as "an abundance of valuable material possessions or resources," but nowhere in this definition is money listed as the singular valuable possession or resource.
Which resources you consider valuable is just as important as the abundance of resources themselves. The key is optimizing for the right form of wealth.
Money
Money is the simplest, most obvious form of wealth, because it can be quantified.
How much is your salary? $100,000.
How expensive was your house? $500,000.
How much was your kid's college tuition? $50,000.
How much is your portfolio worth? $250,000.
Forbes tracks the world's richest people in real-time, so everyone can see just how much money the uber-wealthy have. A hedonic scoreboard for a game that never ends.
Because monetary wealth is so visible, it becomes a point of comparison. Money is the only form of wealth that allows you to look at your neighbor and say "I am richer/poorer than him."
Subconsciously, money becomes a competition. Like any other competition, we want to beat our peers. Make more money. Acquire more possessions. Indulge in more pleasures. Anything to win the game.
What gets missed is that beyond a certain point, money is a seductive scoreboard but a poor measure of wealth. It has diminishing returns. We expect satisfaction from money to look something like this:’
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