Former Banker Measures True Wealth in Ingenious Way

Alden Wicker
Posted

wealthYou might take money advice from a banker, but what about a reformed banker?

Hear us out. A former Goldman Sachs investment banker posted a thoughtful essay of sorts on Business Insider last week on what it really means to have wealth, and it cracked our minds open to a new way of thinking about money.

Most of us think of “wealth” as a hazy–or in some cases very precise–number, after which happiness will follow. Six figures. A million bucks. 100 million bucks. Enough to retire. More than your parents. More than your neighbor. A McMansion in the suburbs with a car elevator for your Maserati.

But Mr. Anonymous Banker disagrees with this thinking. Take Mike Tyson, who he brings up as an example. At one point he earned $30 million a fight, yet declared bankruptcy in 2003. Would Tyson ever have enough?

RELATED: The Science of Spending: What Really Makes Us Happy?

What Banker is trying to point out is that all you need to be wealthy is income that is higher than your expenses, especially if that applies to the rest of your life. And he disagrees with the idea that hitting the lotto automatically means a triumphant walk away from your job. Yes, if your job sucks but pays the bills, being able to walk away is a bonus. But finding the right work, and being able to live on it, is true happiness, and should be the goal.

He sums it up this way:

“If you have enough assets plus passive income to cover your personal lifestyle expenses for the rest of your life, and that money allows you to work at something you love–without concern for the amount of compensation–then you are wealthy.”

So, listen up those of you working at high-paying, soul-sucking jobs: While you may have a swank house or apartment, designer clothing and a doggy daycare for your two purebreds, you’re not truly wealthy if you hate your job.

Refreshing, right?

Tell us: What do you think of this definition?

  • Guest

    So ture!

  • CrankyFranky

    I’m mulling this at the moment – I love my job (teaching) – but – too much stress, student complaints (they complain about all the teachers), budget cuts and looming job cuts have me making plans for when to jump.

    my estimates suggest I have enough to retire, but I don’t want to find myself twiddling my thumbs bored – so I’ll mosey along until I get a clear signal.

    • changemyevilwaysbaby

      If you love teaching, in retirement you might enjoy tutoring in an Adult Basic Education program. Many communities are funded to provide ESOL or GED classes to adults, and teachers can use help in the classroom or students may want help outside of class. You get the benefit of a very motivated (but often struggling) learner and none of the bureaucracy. Full Disclosure – I run a volunteer tutoring program, and the retired teachers tutoring with us are in heaven!

      • CrankyFranky

         thanks Santana? – a good suggestion – appreciated !

  • jrmint

    This is a timeless revelation that I’m glad is getting more airtime.  However, this isn’t a new revelation.  Robert Kiyosaki (among others) have preached the same sermon for years.  Pick up a used copy of “Rich Dad, Poor Dad” for a really great, eye-opening read.  Listen to Dave Ramsey about his total money makeover to drive the message home further.  Dave is constantly telling his audience,  “If you will live like no one else, later you can live like no one else.”
    The key to the article mentioned above is the passive income becoming your income to fund your lifestyle and cover your expenses.  Passive income works for you not the other way around.  You work for your active income.  Your choice is whether you either pursue your passions or work for someone else’s passion.  But, first you must know what your true lifestyle expenses are to find out what your “number” is.

  • loonyme

    This is rather obvious, yet often unaccounted for fact. I like what I do, but I would love it if my livelihood didn’t depend on it. That way I could just enjoy the work…only do as much as I wanted for the hours I wanted, no doing grunt work or long hours for that raise and promotion.