By Joel Dansby* on Dec 29, 2020
In our discussions with clients, the term “wealth” has always been tossed about somewhat loosely. We talk about building wealth, wealth management, wealth enhancement, and wealth preservation and wealth in general as if it were universally understood. But then, on one momentous occasion, a client asked very sincerely, “What exactly is wealth?” It suddenly became clear that “wealth” is such an esoteric term that it can only be defined by what it means to each individual. For it to have any value or reality-based application at all, any discussion of “wealth” or “building wealth” needs to begin with some deep introspection about what “having” wealth means to you.
Chasing Wealth and the Risk of More
When the ambition of wealth simply turns into a pursuit of “more,” there is no real destination, and happiness can only be fleeting because any sense of satisfaction will always be temporary. The failure to appreciate what we have today only increases the “risk of more” with absolutely no guarantee of increased happiness. For the people who consider themselves wealthy today, more money and spending didn’t necessarily improve their happiness. A good life narrative is not built from having more money; rather from knowing how much money is needed to produce the situations that result in a good life.
Life is a Journey, but Wealth is a Destination
Unfortunately, the vast majority of people on the success ladder have yet to clearly define their vision of a good life. As a consequence, they are likely to follow any path, which for many of them is guided by present needs and the actions of the people around them, such as the Jones next door. If you give a thousand dollars to a person who has no clear purpose in life, no ambition in how to live a good life today or in the future, what do you suppose he will do with that money? You are correct if you said he is most likely to spend it. They may eventually accumulate an amount of money that signifies wealthy, but they may never enjoy the contentment of having arrived.
People with clarity of purpose and a clear vision of their future tend to view wealth as the culmination of their accomplishments that lead to their destination of a good life; and the money they’ve accumulated along the way is only a part of the means to an end. At a minimum, with a clear definition of what wealth means to you, you can put the math to it and develop a sound strategy to help you create and preserve your monetary wealth that can lead to a good life for the rest of your life.
*This content is developed from sources believed to be providing accurate information. The information provided is not written or intended as tax or legal advice and may not be relied on for purposes of avoiding any Federal tax penalties. Individuals are encouraged to seek advice from their own tax or legal counsel. Individuals involved in the estate planning process should work with an estate planning team, including their own personal legal or tax counsel. Neither the information presented nor any opinion expressed constitutes a representation by us of a specific investment or the purchase or sale of any securities. Asset allocation and diversification do not ensure a profit or protect against loss in declining markets. This material was developed and produced by Advisor Websites to provide information on a topic that may be of interest. Copyright 2020 Advisor Websites.