Understanding True Wealth Versus Being Rich
“It requires a great deal of boldness and a great deal of caution to make a great fortune; and when you have got it, it requires ten times as much wit to keep it.”
Meyer A. Rothschild
True Wealth is so much more than money or assets. Henry Ward Beecher said, “No man can tell whether he is rich or poor by turning to his ledger – it is the heart that makes a man rich – he is rich, according to what he is, not according to what he has.”
Through my extensive research on legacy planning, and working with numerous affluent families, I have discovered that true wealth is composed of six core capacities:
1) Human Capacity – Being True To Yourself
This is who you are as a person. It includes your health (your physical capital), what you think (your intellectual capital), what you feel (your emotional capital), and what you do (your behavioural capital). In all of mankind’s history – past, present, and future – only you have your unique talents, passions, desires, and skills to make a difference in the world during your life journey.
2) Financial Capacity – What You Have
This includes the assets found in your net worth statement (your financial capital) and your ability to generate cash flow (your revenue capital). Although your financial capacity is an important part of true wealth, it is only one capacity within true wealth. This is why studies have consistently shown that financial capital does not bring happiness. It is much better to focus on what you value rather than the value of what you own!
3) Lifestyle Capacity – Your Choices
This includes how you are choosing to live your life (your lifestyle capital) and the experiences that you desire in your life (your experiential capital). Your bucket list would fall into this category.
4) Social Capacity – Your Relationships
This includes your immediate family (your family capital), your extended family (your family network capital), your friends (your friendship capital), your business colleagues and professional network (your business and professional network capital), the community that you live in (your community capital), etc. Philanthropy, charitable giving, and helping others falls under this capacity as well (your social capital).
5) Spiritual Capacity – The Alignment Of Your Life Purpose With The Greater Good
This is where you must decide if you are a human being trying to have a spiritual experience or if you are a spiritual being having a human experience (your spiritual capital). Depending on how you answer this fundamental question will determine what attitudes and frameworks that you will utilize on your life journey.
6) Business Capacity – The Value Of Your Unique Abilities
Unfortunately, too many people question their self worth because the marketplace places different financial rewards on different unique abilities. However, this is a false perception to base your self worth. Your unique abilities are your gifts and therefore are priceless. You are more precious than anything else in your world since you are unique to the history of the world. In reality, you would be much better heeding the words of Marley’s ghost to Scrooge in the Charles Dickens’ A Christmas Carol movie:
Business! Mankind was my business. The common welfare was my business; charity, mercy, forbearance, and benevolence, were all my business. The dealings of my trade were but a drop of water in the comprehensive ocean of my business!
It is best to remember that Capacity is what you are capable of becoming in your life whereas capital is just what you currently have in your life. Too many people limit their thinking by focusing on capital, which in turn limits their True Wealth. You may have heard the saying that if you take all the wealth in the world and divided this wealth equally among all humans, in a very short period of time, the majority of this wealth would find it’s way back to the original wealthy people. The secret behind this phenomenon is the True Wealth mindset of the wealthy which is focused on optimizing capacity rather than the scarcity of existing capital.