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What is wealth?
This question looks simple but is it really that simple? What is the correct answer? Well, there is no right or wrong answer to this question and answer depends whom do you ask. You will find wide variety of answers from people. Not surprisingly, wealth means different things to everyone. However, most people do not believe money would buy them happiness. You probably have seen one of those MasterCard’s commercial. But what is that “everything else” that commercial talks about? That “everything else” is a big part of how comfortable or miserable your life will be. So remember this: Wealth doesn’t always bring happiness, but most of the time it does.
Most of us associate wealth with money, our savings, investments such as stocks and bonds, our homes or other forms of capital. If you literally look in a dictionary for the meaning, you’ll find that wealth is the state of being rich and affluent. Wealthy means someone with plentiful supply of material goods and money. One common fact often overlooked is that a great wealth is not a sign of great intelligence.
Some people use the term genuine wealth. Genuine wealth is a concept that considers your overall happiness rather than just fiscal wealth and resources. If you take a closer look, it first makes sense. What is the point of being a millionaire but at the same time suffering from a disease that can't be treated? Or not having someone to share and enjoy the wealth with you? A happy and loving family is priceless. Same is true for having a great health. While genuine health concept explores lot more that money, in the end, there is no denying that genuine wealth has little meaning without fiscal wealth.
We need to have the means and ability to provide for our family and loved ones to keep them happy and comfortable. Most people would agree that wealth usually refers to money and property. The use of the word “wealth” itself assumes some socially-accepted means of identifying objects, land, or money as "belonging to" someone, i.e. a broadly accepted notion of property and a means of protection of that property that can be invoked with minimal (or, ideally, no) effort and expense on the part of the owner. Concepts of wealth vary among societies.
A millionaire in a third world country has lot more social status and means as compared to someone in a wealth country such as U.S. Most people would also agree that wealth represent freedom, a freedom of choice and living style. Our social life is build around our status in the society we live in.
If we move explore beyond the question of wealth, next natural question would be “How much money would it take to make you wealthy?” most people would agree that wealth is a relative thing. While for some having $1 million is wealthy, for others even $100 million is not wealthy enough. Most of the time, If you have $1 million, you feel the desire and aspiration to have $10 million and in absolute terms, there is no end to it. However, there is nothing wrong in being ambitious. What is wrong is the ambition driven by money and greed. Most people with monetary ambitions end up in a rat race all their lives and never get to enjoy what they had to start with. You should also understand the value of money. If you want to enjoy your wealth, you must work hard to preserve and protect it.
A good example to prove it is the case study of most lottery winners. People who win the lottery but have no concept of money tend to lose it right away. People who inherit money through a trust or earn it themselves but feel they were lucky tend to be more cautious in spending it. People who deal best with wealth are those who gain it with confidence, did it themselves and know they can recreate themselves if things turn sour.
Another important thing to remember is that even though there is a definite link between wealth and being successful. It doesn’t always have to be that way. You must also pay close attention to the definition of word "success". It could have very different meaning in a different context. For a wildlife biologist, ability to save a rare species of birds may translate to being successful but doesn’t necessarily translate into wealth. However, you can be wealthy without being successful.
Also remember that occupation or line of business may play a big role is success and wealth perception. For example, in United States, there are some occupations that pay lot more than others. A lousy physician would make lot more money in his/her lifetime compared to a hard working receptionist. Also, most people would assume that you’re rich if you tell them that you’re a physician. This would rarely be the case if you tell them that you’re a very successful receptionist. So perception plays a big role as well.
And finally let’s talk about IQ and wealth issue. Having a higher IQ, on the average, means that you will make more money each year than people with lower IQs. This has been validated in various studies. Having a higher IQ enables you to do better in school, get into better colleges, get a better job, and solve tasks more quickly and creatively at work.
So then one would think that people with higher IQs also accumulate more wealth, right? However, a new study says that this is not the case:
Just because you are smart doesn’t mean you can balance a checkbook, or tackle any of the other tasks that might make you wealthy. A detailed study of 7,000-plus Americans followed since their teen years in the late 1970s reveals that intelligence provides more earning power but not necessarily more accumulated wealth. “The smarter you are, the more income you have,” explains economist Jay Zagorsky of Ohio State University, who analyzed the data. “For wealth, there is no relationship.”
Zagorsky used intelligence scores and compared them with financial data collected in 2004. For each IQ point, there was a rise in income of between $202 and $616 annually. (For example, a person with an IQ of 130 earns between $6,000 and $18,500 more per year than a peer of lesser intelligence.) But this higher yearly income did not translate into higher wealth. In fact, people with slightly above average intelligence (105 IQ score) had an average net worth higher than those just a bit smarter (110 IQ). “There are some very smart people who get into financial difficulties,” Zagorsky notes. “Even smart people don’t save.”
Most people will find it very surprising. If true though, it is rather nice to know that the playing field regarding gaining wealth is not stacked in favor of those with higher IQs. Getting lucky in the genetic draw at birth, in a just universe, should not mean that you automatically would become wealthier than those born with lower IQs.
Bottom line - If you have wealth, or aspire to become wealthier, most of these things will pass through your mind at different stages of your life. You’ll have to develop a much better understanding of money if you dream of being wealthy. The dream of being rich and able to enjoy is not impossible, but it is difficult. But If you equipped yourself with right tools and resources, you can make it happen.
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