Comments on: Definition of Wealth http://www.productivity501.com/definition-of-wealth/474/ Pieces of the productivity puzzle. Thu, 18 Mar 2010 16:39:12 +0000 http://wordpress.org/?v=2.9.2 hourly 1 By: Mark Shead http://www.productivity501.com/definition-of-wealth/474/comment-page-1/#comment-129436 Mark Shead Tue, 06 Oct 2009 14:47:27 +0000 http://www.productivity501.com/definition-of-wealth/474/#comment-129436 @Juan - Someone once said: Being rich is having money, being wealthy is having time. Wealth can't just directly equal assets because there isn't any absolute scale. What is wealthy in one place is poor in another. My point is that even in the same town, some people have everything they need to enjoy life and others can't seem to get by. Both positions have very little to do with how much money you actually have. @Juan – Someone once said:

Being rich is having money, being wealthy is having time.

Wealth can’t just directly equal assets because there isn’t any absolute scale. What is wealthy in one place is poor in another. My point is that even in the same town, some people have everything they need to enjoy life and others can’t seem to get by. Both positions have very little to do with how much money you actually have.

]]> By: Juan http://www.productivity501.com/definition-of-wealth/474/comment-page-1/#comment-129406 Juan Mon, 05 Oct 2009 17:46:59 +0000 http://www.productivity501.com/definition-of-wealth/474/#comment-129406 Wealth = Assets Wealth != Standard of Living It's good to have some austerity but don't become cheap! Wealth = Assets
Wealth != Standard of Living

It’s good to have some austerity but don’t become cheap!

]]> By: Dave http://www.productivity501.com/definition-of-wealth/474/comment-page-1/#comment-123733 Dave Tue, 21 Jul 2009 14:55:39 +0000 http://www.productivity501.com/definition-of-wealth/474/#comment-123733 I read "Rich Dad Poor Dad" and this is definitely a part of that book that stuck with me because it was such a fresh angle on money and lifestyle. Great post! I read “Rich Dad Poor Dad” and this is definitely a part of that book that stuck with me because it was such a fresh angle on money and lifestyle. Great post!

]]> By: Passive Income at Productivity501 http://www.productivity501.com/definition-of-wealth/474/comment-page-1/#comment-22668 Passive Income at Productivity501 Wed, 27 Feb 2008 10:14:51 +0000 http://www.productivity501.com/definition-of-wealth/474/#comment-22668 [...] week we talked about defining wealth in terms of long you can go without a job before running out of money. With this definition of [...] [...] week we talked about defining wealth in terms of long you can go without a job before running out of money. With this definition of [...]

]]> By: Scott Stevens http://www.productivity501.com/definition-of-wealth/474/comment-page-1/#comment-22276 Scott Stevens Thu, 21 Feb 2008 05:11:37 +0000 http://www.productivity501.com/definition-of-wealth/474/#comment-22276 Wealth is having more than you want. Wealth is having more than you want.

]]> By: Mark Shead http://www.productivity501.com/definition-of-wealth/474/comment-page-1/#comment-22202 Mark Shead Wed, 20 Feb 2008 12:37:35 +0000 http://www.productivity501.com/definition-of-wealth/474/#comment-22202 @Ryan - The problem I see with your definition is that it tends to constantly push "being wealth" out further than whatever you have right now. As your income increases so will your spending. In the end you have the same amount of freedom as before--maybe you have a bigger cashflow, but you are still the same number of days away from being broke if you were to quit your job. That freedom is what will allow you to expand the top part of the equation--the amount you make. Lets say I make $100,000 per year. I live in a rural part of the country where my housing expenses are less than $10,000. My commute time is 3.5 minutes. My used car costs $8,000. My life is simple, but I have everything I need. In the end after you take all expenses into account, it only costs me $30,000 per year to live. You make $250,000 per year and live in Silicon Valley. Your housing costs are about $15,000 per month. Your new car cost $75,000. In the end you spend $249,000 per year. In this situation I would argue that I am much more wealthy than you. Obviously to the outside observer, you would look much more wealthy, but with the definition used here, it isn't how rich you look that matters. It is the freedom associated with the wealth that should be the focus. Even though you make 2.5 times what I make, I have a great deal more freedom. If used correctly, this freedom will allow me to take advantage of financial opportunities that simply will not be available to you. I have an extra $69,000 per year that I can invest. This may mean investing money, or it may mean covering living expenses in the future so I can invest my time. @Ryan – The problem I see with your definition is that it tends to constantly push “being wealth” out further than whatever you have right now. As your income increases so will your spending. In the end you have the same amount of freedom as before–maybe you have a bigger cashflow, but you are still the same number of days away from being broke if you were to quit your job.

That freedom is what will allow you to expand the top part of the equation–the amount you make.

Lets say I make $100,000 per year. I live in a rural part of the country where my housing expenses are less than $10,000. My commute time is 3.5 minutes. My used car costs $8,000. My life is simple, but I have everything I need. In the end after you take all expenses into account, it only costs me $30,000 per year to live.

You make $250,000 per year and live in Silicon Valley. Your housing costs are about $15,000 per month. Your new car cost $75,000. In the end you spend $249,000 per year.

In this situation I would argue that I am much more wealthy than you. Obviously to the outside observer, you would look much more wealthy, but with the definition used here, it isn’t how rich you look that matters. It is the freedom associated with the wealth that should be the focus.

Even though you make 2.5 times what I make, I have a great deal more freedom. If used correctly, this freedom will allow me to take advantage of financial opportunities that simply will not be available to you. I have an extra $69,000 per year that I can invest. This may mean investing money, or it may mean covering living expenses in the future so I can invest my time.

]]> By: Ryan@Prospecting LIFE http://www.productivity501.com/definition-of-wealth/474/comment-page-1/#comment-22195 Ryan@Prospecting LIFE Wed, 20 Feb 2008 11:58:08 +0000 http://www.productivity501.com/definition-of-wealth/474/#comment-22195 When you mention that one can increase your wealth from both sides of the equation, either by making more money or by lowering your cost of living, I inherently feel that the first method of increasing income would be a much better option than to lower your cost. My definition is wealth simply means having the monetary means to afford what I want, when I want it. For example, being able to buy and afford a cup of starbucks coffee without second thought, instead of having to substitute it with instant coffee. True wealth is created by expanding our means, not lowering our standards. When you mention that one can increase your wealth from both sides of the equation, either by making more money or by lowering your cost of living, I inherently feel that the first method of increasing income would be a much better option than to lower your cost. My definition is wealth simply means having the monetary means to afford what I want, when I want it. For example, being able to buy and afford a cup of starbucks coffee without second thought, instead of having to substitute it with instant coffee. True wealth is created by expanding our means, not lowering our standards.

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