Money vs Wealth- Understanding Wealth and Types of Wealth
In this money-driven world, the relative comfort of financial stability is something that each one of us strives for. But, the question is, is money the only thing that counts in our wealth? What is true wealth? Is money equals wealth or is there a difference between both the terms? Is having more money simply makes you rich or it also makes you wealthy?
For some people, wealth is having a palace-like home, Tesla’s car, the latest iPhone and enough money to plan a trip to Europe. On the other hand, some measure wealth by their invested assets and by the intangible things in life such as love and relationships. In this article, we’ll be discussing what is the difference between wealth and money, the different types of wealth and how by inculcating the multi-dimensional wealth mindset you can improve your life in the long run.
What is the difference between being rich and being wealthy?
So, let’s begin by considering examples of people in your life. First, consider someone amongst your friends or relatives who makes significantly more money than you, which sometimes even makes you envious. What if the person is spending all their money on a luxurious lifestyle? They might have a big house and the latest model of Porsche, but a very little amount of money in their bank account. Do you consider that person to be wealthy?
Now, let’s consider another example of a person who earns less than you, but this person has a good saving habit. Then, due to his/her low-cost lifestyle and money management mindset, he would be able to retire by the age of 55, would have more time to spend with his family and take care of his health. Now, do you consider that person to be wealthy instead?
What is the inference based on the above-shared examples? The first person will always have to work to maintain his lifestyle while the other person will be able to live off of his savings.
The above-mentioned example also explains the difference between wealth and money. Having more money is not the definition of wealth.
Many out there are unaware of the difference between being rich and being wealthy and are of the belief that being rich is the same as being wealthy. The two might appear synonymous to each other, however, they are completely different. Being rich is simply having a lot of money, it comes down to how much cash you have saved in your bank account. Being rich often means that you are spending lavishly, which can also mean that you have a lot of debt. As a matter of fact, there are a lot of celebrities that have gone wrong and declared bankrupt because of their rich lifestyles.
MC Hammer, a popular American rapper, at one point had $30 billion in the bank, a house that with the worth of $1 million, 200 staff members and 19 racehorses. But, in just a short span of time, all those expenses took a toll and he declared bankruptcy in 1996. He ended up in $13 million in debt.
Then, what does it mean to be Wealthy?
Is wealth only defined by the optimal utilization of financial resources or is it something which is more about money and income? Would you consider yourself wealthy when you have a grave illness that makes life unbearable to live? No, right? Then what does it mean to be wealthy? The definition of wealth must include the sound mind and healthy body as well. However, a healthy body and mind or money are not the only factors that contribute to your wealth.
We, at Truly Wealthy, believe that wealth is not one-dimensional, it is a multi-dimensional paradigm, which includes 4 interconnected pillars — money, health, relationship and impact. Hence, there exists a difference between money and wealth, money is just one of the dimensions of multi-dimensional wealth.
The Four Dimensions of Wealth
Money: One of the Pillars of Four-Dimensional Wealth
As William Somerset Maugham said, “Money is like a sixth sense — and you can’t make use of the other five without it”, money is a crucial element to sustain life. This holds completely true that without money you cannot run your life. However, when it comes to money, it should also be kept in mind that money is a good servant but a bad master.
There is a frequent talk about how much money you should have to be happy. However, the new science of happiness begins with a simple insight: we’re never satisfied. According to Catherine Sanderson, a psychology professor at Amherst College, “We always think if we just had a little bit more money, we’d be happier, but when we get there, we’re not.” Indeed, the more you make, the more you want. The more you have, the less effective it is at bringing you joy. “Once you get basic human needs met, a lot more money doesn’t make a lot more happiness,” notes Dan Gilbert, a psychology professor at Harvard University and the author of Stumbling on Happiness.
Even in a study conducted by Princeton University, researchers determined that people with up to $75,0000 are happy. People with less than $75,000 as annual income are likely to be unhappier, however, no matter how much more they earned from $75,000, the degree of happiness does not increase.
The study conducted by psychologist Daniel Kahneman and Angus Deaton analyzed a whopping 450,000 Americans in 2008 and 2009. Participants were asked about their income and also how they felt the previous day and whether they are living the best possible life for them. It was found that 85% of Americans regardless of their income feel happy each day. This clearly states that there is a difference between being rich and being healthy. Researchers found that the income was not the reason behind the unhappiness but it was due to the problems they are already experiencing. The study doesn’t state this clearly why $75,000 is the benchmark, but “it does seem to be a plausible number at which people would think money is not an issue,” says Deaton. At that level, people probably have enough money in their pocket to do things that make them feel happy like planning a trip with friends.
In a nutshell, money is not the only thing that contributes to your wealth. Now, let’s explore the other types of wealth.
Health is Real Wealth
“It is health that is the real wealth and not pieces of gold and silver.” — Mahatma Gandhi
In the present contemporary world, we are so much engrossed in the rat race, that we mostly ignore to take care of the wealth that matters more than material possessions — health. Health is real wealth — a lot of money in your account or the advanced gadgets cannot bring you peace and happiness if you are not physically fit and mentally sound. Currently, we have health all turned around, flipped inside out and all messed up.
Thanks to the convenience offered by technology and modern lifestyles, either we remain planted behind a desk or stuck in the car for much of our day. According to the American Heart Association, sedentary jobs have increased by 83% since 1950. Sitting for 8–9 hours a day not only increases the risk of physical issues like obesity, high blood pressure but also lead to mental health issues like depression. Not only this, today we live in a society where there is the constant pressure of having a bright career and more money that we de-prioritize our wellness.
According to Southern Methodist University psychologist Nathan Hudson and colleagues, people’s overall sense of life satisfaction and happiness are linked to physical health. It would not be wrong to consider health as an investment which can bring you lifelong lasting returns. Eating healthy, exercising and meditating, all are crucial to maximizing our body’s capacity, which will help in acquiring more opportunities, earn smartly and live better.
True Wealth Comes from Relationships
True wealth is not only what money can buy but what relationships can bring. Relational wealth is a crucial part of different types of wealth. According to Psychology professor Arthur Aron, “Relationships are — not surprisingly- enormously important for health, and there are a lot of studies on the biological processes that account for the link between relationships and health”.
Remember Tom Hanks’ character in the famous movie “Cast Away’, who was stranded on an uninhabited island? He creates a face on volleyball to which he addresses as “Wilson” and personifies it. Though this gesture is funny and fictional, it tells us something very basic about life: Relationships are important, they are so important that our brains are hardwired to form them.
According to the research, good relationships help people deal with stress better, have healthier habits and live longer. In a study conducted on 148 people in 2010, researchers found that healthy social relationships improve lifespans. People having healthy long-term relationships are 50% less likely to die prematurely than people who face issues in their relationship.
As researcher and author Brené Brown explains, “A deep sense of love and belonging is an irreducible need of all men, women, and children. We are biologically, cognitively, physically, and spiritually wired to love, to be loved, and to belong.” All in all, the various research and studies suggest only one thing that our social relationships are a pivotal part of multidimensional wealth.
Wealth is Making an Impact on the Society
The most overlooked yet imperative dimension of wealth is the Impact. The impact that you create on others, that contribution that you made towards the society and towards the creatures on this Earth counts in your wealth. Thinking how? Let’s understand this through research.
In a 2008 paper published in Science, three researchers created two groups and gave participants money. They asked the first group to spend it on themselves, while the other group has to spend it on some person or charity. Those who donated the money showed a significant uptick in happiness; those who spent it on themselves did not. In his book Who Really Cares, economist Arthur Brooks has included many similar studies showing that Americans who make gifts of money and time are much more likely to be satisfied with life than non-givers who are demographically identical.
Philanthropists are not only the ones who donate something or do a lot of charity. They come in all stripes. Different gives pursue different visions, which provides society with many solutions to the problems rather than one.
Conclusion
By and large, wealth is not just the money. It is a multi-dimensional concept which covers health, relationship and impact, along with the money. Being Truly Wealthy means not only having enough financial resources to cater to your needs but having a sound mind and healthy body, fine fettle relationship and contributing attitude towards society.
This blog was originally published on https://thetrulywealthy.com/ on 11 Nov, 2020
