The Importance of Defining Wealth (2024)

Wealth means different things to different people. The dictionary definition of wealth is “an abundance of valuable assets, resources or valuable material possession”. However, when we think of assets, we should not necessarily restrict these to solely money or property. To some of us, our valuable assets or resources are manifested in our good health, our family members or even an abundance of time to spend doing what matters most!

Wealth is what it means to each of us; whether the option to choose a quiet life, free from worry; or the option of a life of globetrotting; the ability to acquire material assets; or the option to build a family legacy or corporate empire. Wealth is the freedom to make decisions that are best for us and for our family.

There are different types of wealth, not limited to financial wealth and yet equally important; physical wealth is the abundance of good health and energy; emotional wealth is having peace of mind and optimal quality of life; financial wealth is money or assets which provide us with a certain amount of financial security. Whilst we cannot deny the significance of financial wealth, our body, our emotions, our relationships, our time and what we do with it, all play an important part in how our wealth affects us.

The more wealth we attain, the power we have to purchase our freedom in life. Wealth gives us more options than we would have if we did not have wealth. Wealth is the power to turn goals into reality. It has the depth of possibility, opens up the world and has the power to enrich our lives and the lives of others around us, if used responsibly.

Being truly wealthy, in every sense, means living in abundance, free from anxiety concerning every area of our lives, including our physical health, our emotional well-being, and having the time to experience life by doing the things that really matter to us, without being anxious about money. Financial freedom is borne out of being financially secure. To achieve long term financial security for us and for our family, we must first have a plan, a blueprint for success.

Financial freedom is equated with financial independence and is the state of having sufficient personal wealth to live on, without having to work actively to pay for basic necessities. For financially independent people, their assets generate income and/or cash flow without having to dip into their capital investment. We cannot claim to be financially independent from living on our salaries alone. The formula for achieving financial independence is:

Financial freedom means we can ‘retire’ from an over-active working life and instead, decide how best to spend our time on what matters most to us. Financial independence means that we are in control of our finances and not the other way around.

Wealth is Knowledge and Knowledge is Power. The person who has the right knowledge is better equipped to win the race! To some people, wealth goes beyond money and property, and also includes wisdom, advice and a strong faith foundation. Knowledge is the path of wisdom. Knowledge helps us to differentiate between good and bad; right and wrong. Knowledge is also a vital tool in finding solutions to overcome any challenge, including financial ones. There is an old saying that goes “Give a man a fish, he will eat one day; Teach a man how to fish he will eat every day”. There is no better gift than encouraging a person to enhance their knowledge, so as to help themselves. This is the purpose of Wealth8. We recognise that it is Your Wealth that determines Your Future. We believe it is important to learn the language of wealth preservation, to succeed in achieving financial security.

Wealth is a measure of your ‘net worth’ i.e. the total of your savings, investments and cash less any debts. Do the sums! Do not mistake income for wealth!

Wealth refers to a state of having significantly more assets than liabilities. However, in today’s society, a person with a lot of debt may be considered wealthy because others are not aware of his or her true financial state. Do not fall into the ‘false wealth’ trap! (See Bimpe Nkontchou talking about the benefits of using a “Wealth Asset Register”) Your goal should be to build up enough residual, passive income sources, which will ensure you earn a regular income, long after you have stopped working. This is the essence of any retirement plan.

True wealth — true financial freedom — is having the financial security and peace of mind that enables us to focus on the things that matter most in our lives. Take active steps to improve your level of financial fitness.

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