A lot of people think that money (loads of it, natch) translates directly into wealth. The more of it you have, the more things in life you can enjoy: vacation breaks, exotic foods, snappy gadgets – the list goes on and on. It’s certainly hard to say otherwise: raw spending power, whether physical or digital, has always been a visible symbol of status no matter where you go.
But I disagree.
The biggest mistake people make when contemplating wealth (or their lack thereof) is confusing it for its fruits. The truth is that it is entirely possible to be awash in cash and still be poor. Whether your poison is an overloaded work schedule, a mountain of debt, or a lack of precautions against emergencies is entirely up to a person’s individual experience.
Personally speaking, wealth can be broken down into three types: opportunities, convenience and leverage. Let’s jump into these:
- Your ability to create satisfactory opportunities for both yourself and others is a very good sign of passive wealth, whether its with hard-earned cash, a solid network of contacts and friends, loads of influence, or all of the above. The less friction or resistance you encounter, the better things are. An excellent example would be one where someone asks you for a job. Unless you have sizeable resources at your command, your answer would be the same as most readers of this blog: hand over a resume, and you’ll try to ask around. But if you did have the resources, there’s a good chance that you’d give the opening regardless of their actual qualifications.
Another example, albeit much larger, is Google’s moonshot division. If I told you that I was working to prevent death, you’d probably call me crazy. But since Google possesses great amounts of technology, capital and talent, it’s capable of taking the time and the effort to dedicate an entire research team into looking in exactly that. Never mind that it might take years of life and billions in spending – the fact that they can create such mind-boggling opportunities gives you an idea of the wealth that they command.
- Speaking of opportunities, the amount and quality of convenience that you can comfortably experience is a reliable sign of your active wealth. And the wealthier you are, the more convenient these things become. If you’re not rich enough to lease your own private jet, you can still wait to snag economy airline tickets to go places. If you don’t want to walk, you can hail a cab – or even better, an Uber/Lyft/rideshare of choice. You can also peruse listings to see popular restaurants (and what to order), reserve seats for events online, and enjoy a level of entertainment on a variety of devices and locations.
It may not be immediately apparent, but one’s quality of life goes up significantly with the ease of living that can be accessed and enjoyed today. The more convenient life is to enjoy (not just live, but truly enjoy), the more wealth you objectively possess. Even if it’s just a shorter commute to one’s workplace, or easier access to different foods, convenience certainly pays off dividends.
- Lastly, the amount of leverage that one can apply to mitigate – or completely avoid – inconvenient situations is our final indicator of both active and passive wealth. This doesn’t just extend to scandalous behavior or unplanned emergencies, but to the everyday pitfalls in life that blindside us when we’re not looking, such as:
– That minor car accident that gets the bodywork scratched – fixed up by our good friend who happens to be a mechanic over a few beers.
– The fever and cough that we would have gotten pulling in overtime, if we had not spent the extra money on multivitamins that we had just drank that week.
– The financial and legal advice shared by colleagues over a good dinner that can help us manage our assets better.
The quicker we can dodge misfortune, the greater the actual wealth we possess – and can protect, allowing us to create even more opportunities and enjoy more conveniences. It simply feeds into itself.
Of course, this sounds largely subjective. And it probably is. But let me ask you: when was the last time you made a convenient opportunity for someone else while courting disaster – and leveraging your way out of it?