What does it mean to be wealthy?
The truth is that we all have different ideas about what wealth is, and what it means to be rich.
Join the hosts of the Money Mastermind Show as they discuss what wealth means to them, and as they consider what it takes to be truly wealthy. You might be surprised to discover that wealth is a state of mind, and not so much a number you’re supposed to reach.
ANNOUNCER: Welcome to the Money Mastermind Show. Let’s Talk Money.
[0:00:03.4] GC: Welcome to the Money Mastermind show. Wealth, we talk about all the time but what does that really mean? What is wealth? Well we’re going to discuss that today with the members of the money mastermind show and those me members are, we have Kyle Prevost of Youngandthrifty.ca, Miranda Marquit of Planting money seeds, Peter Anderson of Bible money Matters. Tom Drake’s also a part of our crew of the Canadian Finance Blog but he is not here right now. I’m Glen Craig of Free from broke.
So we’ll just jump into it. Wealth. We all want it, we want a piece of it, we want to claim it, what is it though? What does it mean to you?
[0:00:41.4] KP: I think it’s so interesting Glen that the idea of wealth most people think it’s relatively simple and straightforward, accumulating assets of some kind but it’s actually such a fluid definition especially in different cultures around the world. I find it really interesting and as a history geek, I find it interesting too in our definition of wealth today versus the past and sort of the lifestyle I get to live as a non-wealthy person today versus 60 or 70 years ago.
It’s interesting. I’m interested to hear our panelists’ view on it because there should be some different variations. I don’t feel wealthy comparatively speaking next to some of the folks we have on this show that have made millions of dollars and stuff but on a world scale, you start looking at what other people have or don’t have and what opportunities I have and I start to feel pretty wealthy.
[0:01:31.9] GC: Yeah, don’t they say like compared to the rest of the world, everybody in the United States is in the 1% of world wealth?
[0:01:40.7] PA: Yeah, the thing is, it’s so subjective when you’re talking about wealth. I was reading one study that showed, when people were asked how much it takes to be rich, they always gave a number that was about twice their current net worth or income. No matter what they were making, it was about twice of what they’re making. If they were making $100,000, they would say $200,000. If they were worth five million dollars they would say $10 million dollars would be rich. It really is pretty subjective and it really comes down two what it means in your own head I guess.
[0:02:12.8] GC: Maybe that’s an interesting point too right? You use the word rich and I tend to think that there’s a difference between being rich and wealthy.
[0:02:20.1] PA: Yeah.
[0:02:23.2] GC: I think Chris Rock said it, Shaquille O’Neil is rich, the guy who owns the Lakers is wealthy, right?
[0:02:30.2] KP: The guy that sign Shaq’s check is wealthy.
[0:02:33.6] GC: He’s wealthy. There is a difference there. How does that play into what our definition means?
[0:02:40.1] MM: Well I think a lot of it thought too is, are you going to step back and I like what Peter was talking about how a lot of people say, well they name a number that’s twice what they’re making and I think a lot of the time, one of the pitfalls you run in to when we’re talking about being wealthy or being rich or whatever we’re talking about is we start comparing ourselves to other people and of course if I’m going to compare myself to most of the people who live in my neighborhood.
They would probably look at me and think that I’m wealthy or rich or whatever. Then, when I turn around and if I was to compare myself to somebody who lives, let’s say Frank VanderSloot who is Idaho’s billionaire, I’m not wealthy at all. I think part of it too is once we start comparing ourselves to others and saying well, I’m not going to be — or saying, “I’m not going to be rich until I make X amount of dollars.” I remember when I first graduated college I was like, “If I could just make six figures a year, I’d be rich.”
Now I make six figures a year and I’m like, “Okay, it’s good.” But I don’t know that I’d say rich, I think wealthy, when we talk about rich versus wealthy. I think it’s a harder definition to make. I think wealthy is more about how you feel about your life in general and rich is just kind of cold and looking at the pile of money you have. Where wealthy is like looking at the big picture and saying, what is my life like? Is my life comfortable? Do I have health? I think it’s more of a holistic way of looking at things, in my own mind.
[0:04:25.1] KP: What do they say? “Comparison is the thief of joy?” That’s a quote I saw somewhere on someone’s shirt or it was like right under a B column line or something, I don’t know but yeah, I sort of agree with you Miranda. I consider rich, if you can live — if you have enough assets to live off the dividends or the proceeds of your holdings and not have to sell your labor, that’s what I consider rich but I agree with you, wealthy to me has a connotation other than simple material goods.
[0:04:59.0] GC: To me, wealth means it’s like self-generating, it’s something that’s there and you can work, you can do things for it but it’s something that it’s sort of in perpetuity, the wealth just keeps building itself and pays for everything. Rich is kind of come and go but wealth is more long term. I don’t know if that still nails down a definition, but it’s certainly bigger than just being rich.
[0:05:28.0] MM: I think it’s all emotional though but because money is such a loaded subject that it’s all about how you feel about wealth, because yeah, I don’t know.
[0:05:42.7] PA: It is such a subjective thing I think. I was reading one article that talked about the person believed that wealth was just basically the flexibility to be involved in the things that really matter in life as opposed to just spending time in their life trying to make money or whatever.
To me, that’s kind of more how I feel about it. True wealth is being able to be doing things that I want to do, to be spending time with my loved ones and not having to be spending all these hours doing things that I really don’t care about.
[0:06:17.5] KP: Yeah, that’s the flip side of it Peter, I agree. Because it’s easy to be like the feel good message of do what I want to do. For me, there’s like the flip side of that. I want the freedom, wealth to me is having the freedom to not do the things I hate doing or to hire someone to do this stuff, I have no aptitude for it. That to me, within my already relatively wealthy north American cocoon, that’s what wealth would mean in my life in terms of a goal at least.
[0:06:46.9] GC: Yeah, like I could think of — say you’re a high power lawyer, you’re making a good amount, you’re effectively rich but you're working 120 hours a week. When you stop working, those riches kind of stop also. You could be doing things with that but when you’ve built up to a point where you’re ready to retire, now you don’t have riches anymore, now you have wealth. Now you’re not working anymore, now the money is the one that’s working for you.
[0:07:18.7] MM: In that scenario, the thing is it’s like, okay, now here’s the point where you’re wealthy and you’re retired, but how many years did you just spend working 120 hours a week being borderline miserable and letting your relationships fail and now you're like, “Oh now I’ve got a pile of money that I can enjoy.” I don’t know if that’s worth it, I don’t know if that’s like true life wealth. I guess that’s money wealth but I don’t know if that’s like life wealth right there.
I personally am like, you know what? I am totally cool if I get to the end of my life and I don’t have a big pile of money to leave to my son, I’m totally cool with that. I’ve made provision for me to set aside money in my retirement account every month so I can be comfortable later but then I’m just like, “Spend it all baby and live my life.”
Maybe that’s a terrible way to look at it but I’ve got my charities that I, and my causes that I support and I have my son that I’m hoping to help with college and give some good opportunities to but that’s the stuff that matters to me and working 120 hours a week so that I can have a huge bank account when I’m 60 just does not feel like true wealth to me.
[0:08:35.6] KP: Build it up, it’s like the old Vikings, that’s how — I want to go out, take all of it with me, put them all on a boat with everything, take my money out of the…
[0:08:44.0] PA: Light it on fire right now.
[0:08:46.7] KP: Light it on fire, exactly. Yeah, don’t leave it to my kids, just go out in a pile, burn all of my cash, just burn it. Yeah, I agree obviously.
[0:08:59.1] MM: All right.
[0:09:01.5] PA: Yeah, I think part of the whole paradigm of feeling wealthy or being wealthy, it can be kind of subjective but so many people, even if they are rich or if they have a ton of money, they don’t feel wealthy and I think it really kind of comes down to — I like how a staff writer on my site Craig Ford but feeling wealthy this way. He said, “I believe a person will only be able to consider themselves wealthy when they’re satisfied with what they have today.” There are so many people that have a ton of material things but they don’t feel wealthy and they’re miserable in their lives. To me that’s not really living a wealthy life, that’s just kind of depressing.
[0:09:44.9] MM: True wealth is being able to have a big sword on your wall even if there’s nothing else on that wall. That’s true wealth right there.
[0:09:52.6] PA: That’s what makes you feel wealthy?
[0:09:54.6] KP: Do you guys get though personal finance, I’m not sort of in your friend circles but word has slowly leaked out amongst some of the members on my staff, amongst some of the folks in my life that I’m now known as a little bit of the money guy or the weird guy that writes about money stuff on the internet, and they’re almost self-conscious. They’re like, “Oh, you must have piles of wealth or money,” or, “Money accumulation must be quite important in your life,” sort of things. They’ll make remarks like that and they think it’s a positive description of me and it’s like, “Not really to be honest. I drive an old minivan.”
[0:10:35.1] GC: Just because you’re watching your money and you kind of try to keep track of what you're doing with it, it doesn’t mean that you’re sitting on piles of it.
[0:10:44.9] KP: To get maximum utility out of it. I just wanted to produce the best lifestyle for me, that’s my goal, not to be like scrooge McDuck jump in to my pile of money and do the back crawls which I never understood because those coins must have been hard, but anyway that’s a side tangent.
[0:11:00.3] GC: Yeah but wouldn’t you like to have that opportunity to try it?
[0:11:04.9] MM: We’ll just come to your house Glen, I’m sure you’ve got piles of money to swim in.
[0:11:12.2] GC: Oh yeah. If you just try that with bills, I bet that’s pretty spongy.
[0:11:15.3] PA: There you go. You know, what you were saying Kyle though about people have that perception of “oh you must have this piles of money and that’s what real success is and what real wealth is just having this piles of money”. That quote I had a couple of episodes ago where I talked about what Thomas J. Stanley said. He said that, “True financial goal of most Americans is not to be rich, not to be affluent and not to be wealthy. The true goal is to appear affluent and seem wealthy.” The perception of what wealth is and that’s what a lot of people want, they don’t really want true wealth or content and any of that stuff, they just want this idea out there.
[0:11:53.8] GC: Is that perception of wealth or perception of riches?
[0:11:56.8] MM: I think that’s the perception of riches and I think the point is, I don’t even know that people really want that stuff as much as they want people to look at them and think that they have it. It starts to get really convoluted but I was talking to somebody and she was like, “Oh man,” she was talking about this person that she knew and she’s like, “Oh well they have this big Mercedes SUV that costs $70,000 and wow, they’ve got to be wealthy.”
That’s when I pulled out that famous — because we’ve got Peter on the show and I feel like I know, I mean I’ve read The Millionaire Next Door once but I feel like I’ve read it so many times.
[0:11:59.9]KP: Solid read.
[0:12:00.8] MM: I know, it’s great, it’s great book. The Millionaire Next Door is a great book but Peter’s always quoting form it so much that I feel like I read it more than once.
[0:12:07.8] PA: Yeah, sorry about that.
[0:12:08.8] MM: No, no, it’s good because it’s totally solid. But I was able to, because of you Peter, I was able to say, “Do you know what the number one car that millionaires drive is? It’s Toyota.”
[0:12:59.7] KP: Toyota.
[0:12:59.7] MM: That’s the number one brand that — yep, and I pulled that out on her, I said, actually, person driving that big old fat Mercedes is probably eyeballs in debt and is not wealthy at all and go look for somebody driving a Toyota.
[0:13:18.5] GC: Anybody can lease one.
[0:13:20.5] MM: That’s right. At any rate, that’s true.
[0:13:23.1] KP: It’s weird, the conspiracy theories that surround the word wealthy. Because there’s the, I don’t know, I’m not going to get into the left and right because I know this gets pretty violent in the world of USA. In Canada it’s violent for a month and then we go back to living life but certain groups of people, I’ll just leave it at that, they’re like, “Wealthy is just this thing that’s holding you down and you’ve got to just let loose and enjoy life.”
And then other groups are like, “No, you don’t get it, that whole be happy with less and that’s all the conspiracy so that the major money can just keep generational wealth and just hang onto it and you’ll just be happy sitting in the corner.” And it’s like, “Well then, who’s the joke really on if I’m happy sitting in the corner and you’re equally happy with your wealth and doesn’t that work out okay?” I just find it amazing the depth of weird and whacky complexities that people wanted to leave in this idea of wealth. I just find it quite weird.
[0:14:33.0] GC: Money brings out some strange things in people and expectations and what they impose on other people as well.
[0:14:41.9] KP: Yes, true.
[0:14:44.8] GC: One thing I found interesting when we started off, you had mentioned Kyle something about the collection of assets and I think a lot of people make the mistake in thinking that it is scrooge McDuck where you just have a vault full of cash, that’s what wealth is, you just have endless cash whereas really that’s not the case, you have this different assets, you have stocks, you have a business, you have all these different other things that are producing this wealth. I think a lot of people don’t quite understand that, they think it’s just like, “Bam, here it is, I’m just going to grab something form under the couch and there I go.”
[0:15:18.5] PA: Yeah, I think it’s important to have an end goal that’s besides just being wealthy. So many people, it’s like, “Oh I want to have all of this money and want to be wealthy and someday I can buy this expensive house,” but when the end goal is just being wealthy or just having a lot of money, it’s not very — I’m not sure what the word is, but it’s not going to make them happy in the end. They’re going to find when they have those billion dollars, maybe it will make them a little happier but having that as your end goal is probably not a wise idea.
[0:15:52.9] MM: The problem with that is if you make money, your end goal, you never have enough, there’s always more that you could have or that you should have. I think this goes back what we’re talking about earlier when you’re starting to compare yourself to people when you’re like, “Well there’s always somebody who is going to have more and there’s always money to be had. You're never going to have as much money as there is.”
So if that’s your end goal, it’s really hard to be content and I remember when I used to say, “Oh well if I could just make this much money or if could just buy this one thing, I’ll suddenly be happy.” One day I realized that I was externalizing my happiness and saying, “Oh well, I’ll be content when I have this other thing.”
But the reality is, unless you learn to be content kind of with where you are or unless you start building a life of purpose and meaning, it doesn’t matter how much money you have, you’re not going to be content and you’re never going to be feeling like you have enough of it.
I mean look at people who are millionaires who still — I mean I know somebody personally who is a millionaire who just is not happy and does not think he has enough, and he’s always crying poverty and he’s just not happy because all he does is hang around with people who are wealthier than he is, then he feels like the poor guy.
[0:17:20.3] GC: It’s interesting. I was going to say, location has a relative factor but you bring that up and it’s more, not even location but proximity. Who are the people that you are around and what are other people doing? You have that one good job amongst your friends who are maybe are just starting out and you’re the wealthy one just because you have a steady nine to five job.
Really depends on who you’re hanging with. If you’re hanging with a lot of people maybe are wealthier, you might have that sort of feeling like, “Hey, how come they always have more than me?” Or even depending on where you live, that probably has a big factor on what you consider rich or wealthy.
[0:18:02.8] MM: Yeah, that’s a really good point. What I make back when I lived in the Philadelphia area, did not go nearly as far as when I lived in Idaho now. Everything is pretty much my rent is half what I was paying in Philadelphia, I’m paying less in food, there’s other reason. There’s just lots of things that are based on where you live too.
[0:18:33.0] KP: I got a question for you guys. With the whole Panama papers thing coming out and a lot of ways the last five years where we’ve been headed as a society I think, or at least the North American society maybe a little bit in Europe as well. How should we feel about wealthy people?
Again, I don’t consider myself wealthy yet, maybe one day depending on whose definition I’m using but how should we feel? Are wealthy people — where is sort of the line, the responsibility? We should still want to be wealthy, right? That’s okay, we shouldn’t feel guilty for that. I’m just wondering, it seems to be in the news right now quite a lot.
[0:19:14.9] GC: I think we should be all socialist until wealthy and then we can change the rules. That’s the way it sort of feels like, right? Everybody starts off young and democratic and liberal and then you get a little bit older and you start making a little bit more money and then you start getting a little bit more towards the right and then now you’re worried about preserving your wealth and passing it on.
[0:19:42.2] KP: Is it guys?
[0:19:43.4] MM: I think it’s funny that you would say that because I actually see the opposite thing kind of where I live where a lot of the young people are like really into “mine, mine, mine, mine, mine”. Then as they get older, they actually become the opposite way and I wonder if it’s a factor of where we live and everything else. I find that it’s that scenario described Glen, is flipped where I live.
[0:20:14.7] GC: The people who are getting older and they’re being maybe more generous with their money, are those people, are they wealthier though?
[0:20:23.2] MM: They’re wealthier than they were when they were younger. I live in Idaho. Okay, we’ve got a very few number of really rich people running around here, okay?
[0:20:35.2] GC: Because don’t you see that all the time? People, when they’re coming up, they’re trying to make as much money as possible by way of whatever means necessary and then once they have that money, now it’s like, “I’m going to buy the wing for the hospital and do all these other philanthropic things with it.” It’s like, yeah, they’re going to be somewhat generous but you know, because they can afford to be.
[0:20:56.7]MM: Nobody here other than Frank VanderSloot whose contributions to the community is he puts on a wicked, awesome fireworks show every year for the 4th of July. But no, it’s actually great, it’s the biggest fireworks show west of the Mississippi but that’s what they tell us, it’s 45 minutes long.
[0:21:22.0] GC: Surely they watch the Macy’s Fireworks Show in California.
[0:21:27.3] MM: Anyway. But no, I’ve found that I think it really kind of depends though on what you think money is for and I think it’s not necessarily an old versus young or left versus right or something like that. I think what it comes down to is what do you think money is for? For people who see money as the end, as the end goal then it’s more about accumulating, it’s about keeping score, it’s more about, “Hey, look at how much I have.”
For people who see money as a means to an end or as a tool, that’s I think where the difference comes in. It doesn’t matter how much money you have or how much money you don’t have. I think it’s more about how you view money and if you view money as a tool as a way, “Well money helps me live the way I want to live, money helps me to be able to volunteer, I can support causes, I have enough money to volunteer for different activities, I have enough money to help other people because I feel like money is a tool that helps me live the lifestyle I want and in turn, I want to be able to help other people.”
I think it’s a mindset thing more than anything else and if you just say, “Well money is the end goal. My goal is to see how much money I can pass onto my kids or my goal is to see how much money I can get in a bank account because that’s what I think is important.” I think that’s where the difference comes in.
[0:22:55.9] GC: I think maybe it ties a little bit back into what Kyle was saying before, what does the money do to you also? Does it change you as a person? You start changing your values, you start changing the things that you do as a result.
[0:23:13.3] MM: I know Kyle here is trying to bait me because I’m the dirty Tommy here on the show but…
[0:23:20.8] GC: How is that possible? You’re the first one to use a credit card and spend on whatever you want.
[0:23:28.5]MM: That’s the thing, right? I love spending money, I love money, I love to use money and I am not ashamed of what I do with my money but at the same time, I see it as a tool. It’s like I said, I don’t care if I amass a lot of money, I don’t care if I never actually end up being a true millionaire, it doesn’t matter to me, it’s not a goal of mine.
I want to live comfortably, I want to be able to travel, I want to be able to donate to causes I care about and I’m really actively involved in the community here now. To me, I just want enough money to make sure I can do those things. So I don’t know.
[0:24:05.2] GC: I guess that is the idealist lifestyle, to have enough money to keep doing what you want to do? It’s a question, I saw something recently in San Francisco, what is rich now? I think the consensus is you’ve got to have at least six million dollars to be rich. Cause it’s just so expensive there and so many startups there and people with money and whatnot. If that’s what it takes to be rich, wow.
[0:24:33.2] MM: Then I don’t care if I’m ever rich.
[0:24:35.6] KP: We’ll get there one day as teachers right Glen?
[0:24:37.8] GC: Yeah, collectively.
[0:24:40.3] KP: That’s true, yeah our pension programs are wealth certainly.
[0:24:45.7] GC: Yeah, that is building a wealth, right? Because if you have a good pension, it’s a rare thing but something that spits out your salary by the time you retire is probably worth millions.
[0:24:58.5] PA: There you go.
[0:25:01.7] GC: That’s a lot to put in for it but hopefully you could do something that spits out maybe a little bit more than that, you can live maybe the life that you want with that money too. We’ve had a lot of interesting talk and thoughts on what wealth and certainly riches are.
So let’s finish up here and we’ll have a final word. Peter, what’s your final word on what wealth is to you?
[0:25:31.0] PA: To me, it’s important when you’re talking about wealth, it’s important to realize that just being wealthy probably is not a good end goal, it’s important to have other important things in your life besides just building wealth. Like the saying that says, “Wealth is like sea water, the more you drink, the thirstier you become.”
So keep that in mind, you’re never going to have enough if having money is your end goal, you’re always going to be wanting more. Try to have different angles that are more worthwhile to provide for your family, to give more to your church or other charitable causes, to give to others in need. Just keep that in mind.
[0:26:14.0] GC: Miranda, what are your final words on what wealth is?
[0:26:18.2] MM: I think it’s more about your life in general rather than just money and it’s a little bit more holistic and so I think that to me, wealth is really just a lot of what I’ve been saying before. Figure out what you really want in life, figure out what’s really important to you and then figure out how you can use money as a tool to live that life and feel fulfilled in what you're doing. Then I think that you’ll be wealthy, maybe not from a money standpoint, but just a more holistic standpoint.
[0:26:53.0] GC: Kyle, what’s your final word on what wealth means?
[0:26:55.8] KP: I think wealth is personal and it’s relative and don’t let comparison steal your joy. If anything, if you really want to count your blessings in either a religious or nonreligious way, read some history man. I’m a history geek and the wealthiest people in the world did not have a standard of living that I have now 100 years ago.
There’s people all around the world that do not have any of the wealth that my society just takes for granted around me, never mind the personal income I have, the fact that I can walk into a hospital and get healthcare is — or walk into a school and just have access to those things is a pretty cool sort of wealth that’s defining also.
[0:27:40.9] GC: Yeah, you could dine that road, just having clean water is a huge thing for a lot of other societies outside of our own whereas we’re just like, “Okay, I’m just going to turn this knob here and I’m cool.” These are all great definitions and hopefully it opens up some conversations out there.
In fact, if you’re listening to this, whatever your means of listening it to it on, whether be on YouTube or on iTunes or whatever. Leave your comment, tell us what you think wealth is. We want to hear about it. So do that right now, well once we finish, and we definitely want to hear what you’re thinking about out there.
To everybody out there, thank you for watching and listening and until next week, be good with your money.
Important issues discussed in this episode:
- What is true wealth?
- How do you decide what wealth means to you?
- Can wealth mean different things to different people?
- What’s the difference between being wealthy and being rich?
- The ways looking rich is different from actually being rich.
Panelists In This Episode:
- Glen Craig | Free From Broke
- Kyle Prevost | Young and Thrifty
- Miranda Marquit | Planting Money Seeds
- Peter Anderson | Bible Money Matters
- Tom Drake | Canadian Finance Blog
For a quick bio of each of our show participants, head on over to our panelist page.
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