Three Unique Ways to Measure Wealth

Three Unique Ways to Measure Wealth

by Marelisa · 9 comments



Net worth has long been how most people measure wealth. It’s calculated by tallying up all of your assets and subtracting all of your liabilities. A high net worth, equals wealth. However, there are other ways to measure wealth which capture other indicators of well-being which net worth does not take into consideration. Here are three unique ways to measure wealth:
Time Affluence
Make Enough Passive Income to Cover All of Your Expenses
Measure Your Wealth By Acknowledging How Fortunate You Are

These three ways to measure wealth are discussed below.
Time Affluence

I wrote about positive psychologist Tal Ben-Shahar in my post, “Harvard University’s Most Popular Course: Positive Psychology”. In “Happier: Learn the Secrets to Daily Joy and Lasting Fulfillment”, a book on happiness written by Ben-Shahar based on his lectures at Harvard, Ben-Shahar writes the following about time affluence:

“Time affluence is the feeling that one has sufficient time to pursue activities that are personally meaningful, to reflect, to engage in leisure. Time poverty is the feeling that one is constantly stressed, rushed, overworked, and behind. All we have to do is look around us — and often within ourselves — to realize the pervasiveness of time poverty in our culture.”

There’s often a rush to trade time for money. However, there comes a point at which having more money has a very small impact on our level of happiness. On the other hand, the time that we’re using in order to make more money could be spent on activities which have been shown to increase happiness, such as the following:
Spending time with your family and friends;
Pursuing a hobby or leisure activity that you enjoy;
Exercising;
Volunteering; and so on.

When measuring your wealth you have to find a way to balance your material well-being with your spiritual, physical, and emotional well-being. You can try to find this balance by applying one of the techniques which Ben-Shahar recommends in his book “Happier”: life-mapping.

For life-mapping, keep a log of the number of hours which you devote to different activities during a typical week: working, commuting, watching television, family time, paying bills, and so forth. Also, keep a record of how much pleasure you derive from each activity. Do this for a pre-determined period of time, such as a month. At the end of the time period, analyze what you discover about how you’re spending your time.

Wealth isn’t just about having the money that you need in order to be able to buy anything you want. It’s also about having the time to spend in activities which you enjoy. There’s a point at which spending more time making money, instead of doing other things, decreases your well-being. Wealth is about finding the right allocation of your time between income-producing activities and other activities.
Make Enough Passive Income to Cover All of Your Expenses

In the bestseller “Rich Dad Poor Dad: What the Rich Teach Their Kids About Money-That the Poor and the Middle Class Do Not!”, the author Robert Kiyosaki defines wealth as follows: “Wealth is a person’s ability to survive so many number of days forward . . . or, if I stopped working today, how long I could survive.” Basically, it means being able to pay for all of your expenses from passive sources of income.

Suppose that you’ve invested your money in income generating assets, such as rental property. If you receive $2000 a month in cash flow from those assets, and your monthly expenses are $2000, then you’re wealthy. You could quit your job tomorrow and still be able to cover your expenses. That is, you’re financially free; you’re not dependent on your wages. You have the freedom to walk away from your job at any moment you choose.
Measure Your Wealth By Acknowledging How Fortunate You Are

The creator of this YouTube video explains that very few people consider themselves to be fabulously wealthy. And yet, if you look at your situation objectively, compared to almost all of your ancestors, and compared to a vast majority of the people living today, you are fabulously wealthy. Think of things such as the following:
Electricity
Running water
Indoor heating and cooling
Internet access to vast amounts of information

Owning a car, or a computer, would have been an extraordinary luxury just a few generations ago. In the Middle Ages, even the wealthiest people owned just a few books. They could travel to no more than two or three places during their entire lifetime, and that would require years of their life and entail great risk.

Rockefeller is considered to be one of the richest men that ever lived. However, the article “Richer Than Rockefeller: Putting Wealth in Perspective”, does a great job of explaining that, because of the commodities that are available today that weren’t available when Rockefeller was alive, in many respects, you’re richer than Rockefeller.

If you’re reading this article, it’s very probable that you’re richer than 90% of the world’s population. In fact, for a lot of people in the blogosphere, the reality is that they’re probably in the top 95 to 99% in terms of wealth. I found a web site that allows you to see where you rank in terms of world wealth which you can visit here: The Global Rich Test.

So, if we’re so wealthy, why don’t we feel wealthy? Because we keep comparing ourselves to people who are even wealthier than we are. That is, we measure our wealth by comparing it to things such as these:
The wealth of the more affluent family living down the block;
The wealth of celebrities we watch on TV and read about in magazines;
The wealth of those who make it to the Forbes list of the wealthiest people in the world.

If, instead, we start measuring our wealth by comparing how we live today to how the previous generations lived, as well as comparing how we live to how the vast majority of the world lives, we would immediately begin to feel very rich.

We don’t realize how wealthy we are because of an insane delusion that everyone else around us is suffering from as well. The problems this causes are the following:
Most people feel at least a mild level of dissatisfaction with the amount of money that they have. Very few people wake up in the morning and think to themselves: “I am so grateful to be fabulously wealthy.”
If you don’t wake up feeling gratitude for how much you have now, you probably won’t feel grateful for your wealth even if you wake up one day and have millions. This is because the mentality which doesn’t allow you to realize how wealthy you are right now will continue to make you feel a sense of lack even if you do become a millionaire. After all, there will always be someone who has more than you do, and there will always be more things that you could buy.
We tend to gravitate toward people who have an amount of money that’s similar to ours. So even if you have millions, when you’re surrounded by other people who have millions, you’ll think that you’re not fabulously wealthy, but that you’re just average.
Another problem of not realizing how wealthy you are is that you end up devoting endless amounts of time to work, so that you can afford a moderately higher level of additional luxuries.
We’re depleting the earth’s resources because collectively we all suffer from this same delusion.
When you feel lack around the subject of money, then it’s very easy for fear and greed to creep into your life. This fear and greed makes you act irrationally when it comes to money, which makes it very likely that you’ll lose the money that you have.
Your fear and greed around money makes it easy for others to manipulate you: it makes you stay at a job that you don’t enjoy, as long as it allows you to keep up with your standard of living; it makes you spend your money on things that you don’t really need or want, because they’re status symbols; it makes you trade more and more of your time in exchange for more money; and so on.

Once you escape this mass delusion, and you start measuring your wealth in terms of how fortunate you are to have all the things which you do, you’ll realize how incredibly wealthy you are. And until you do, you’ll always have a pauper mentality, and you’ll always consider yourself as lacking in wealth.
Conclusion

Here are some other considerations when deciding how to measure wealth:
Which of these would you prefer: a job that you don’t enjoy or find particularly meaningful, which pays you a lot of money, or a job you’re passionate about and which makes you feel like you’re making a valuable contribution to society, but which doesn’t pay very well?
If you’re a multi-millionaire and have lots of “toys”–fancy cars, a yacht, a beach house, and so on–but you don’t have the time to enjoy them, are you really wealthy?
If you’re so busy making money that you don’t take the time to exercise and look after your health and, as a result, you become seriously ill, are you wealthy?
If you spend so much time at work that you neglect your family and become estranged from them, do the millions of dollars which you amassed make you wealthy?
If you have a lavish lifestyle–you live in a large home in a nice neighborhood, you have designer clothes, you belong to a country club, you go on exotic vacations, and so on–but you always feel mildly dissatisfied because there are even more things you would like to buy, are you wealthy?

The three ways to measure wealth which are described above take into account things such as having freedom, having leisure time, and stopping to appreciate what you already have. Wealth isn’t just about how many things you own; it’s also about having the following:
Freedom
Health
Time to spend with friends and family
Leisure time
Appreciating what you have

http://abundance-blog.marelisa-online.com/2011/03/25/three-ways-to-measure-wealth/