"What people want" is a common definition. Are there qualifiers to that we could flesh out? For example should we exclude things that people want simply because they believe others will want them more later (speculation)?
Years ago, when my father was very sick, I made a stupid remark like, "Maybe you can get some financial benefit from this." He responded, "I'd trade everything to be healthy again."
Sometimes it takes extremely trying circumstances to really put things into perspective. Ever since that conversation, I have never looked at the subjects of health, wealth, or happiness in the same way.
You don't know the seriousness of the illness unless you get to that stage. Losing a leg isn't as easy as it seems. Human has a very strong relation with its' organs and he is very prudent/fearful about his health when he is ill.
I have always seen wealth as a function of time and choice.
I would echo the sentiments of thibaut_barrere, reasonattlm, and especially bmelton (as it pertains to time and choice).
In other words, I would call myself 'wealthy' if I had the opportunity to do what I want when I want to do it. I think in American society when we think of wealth we think of Wall St Bankers with multimillion dollar penthouses in NY, or we think of Ellison and his yachting, but I think we can boil it down to time and choice.
Ellison can choose to pursue yacthing as a passion because he is wealthy, and the expense of that hobby is not a determining factor.
Gates can choose to spend his energies at philanthropy because the lack of income and time constraints associated with that endeavor are not determining factors.
For me, wealth would be 'the ability to follow curiosities and interests, whatever they may be.' If I have a 9-5 job AND trying to get a startup off the ground AND I have a family with young children, I am able to follow some of my passions, but not all of them, because there are large chunks of my time that I dont control.
> wealth would be 'the ability to follow curiosities and interests, whatever they may be.'
How would you differentiate between the terms wealth, freedom, and happiness (or do you consider them interchangeable)?
I think from those 3, 'wealth' has the heaviest connotation of objective comparability and applicability to organizations in addition to individuals. (ex. a wealthy company or a wealthy country)
Wealth = how long you could sustain your current lifestyle (same expenses) if your income stopped, today.
EDIT: what I like about this definition is that it is not subjective and doesn't imply any need for comparison. As well, it conveys the idea that time and mobility are the new currencies, which I believe.
(the definition I use; read it in a french book by Olivier Seban)
If you earn $100k per year (no matter how long you work) and have no savings and spend $100k per year, then your wealth is "0 day" and will remain the same, by this definition.
If you earn $100k per year, spend $80k per year (saving $20k per year), then you'll earn "3 months of wealth" each year.
If you earn $60k per year, spend $20k per year (saving $40k per year), then you'll earn "2 years of wealth" each year.
There is at least one person on HN who credibly claims to have that, and I know of a few software entrepreneurs who work about that much when in parking mode.
Taking my family to the Renaissance Festival and not having to worry about the cost of a Henna tattoo, or the cost of an elephant ride.
Time to sit down and play with the inner workings of celery, RabbitMQ, and just how exactly am I going to be able to leverage the subtask module for some high-latency network operations.
Vacations across the country, with the ability to go to Long Beach's quirky downtown and pick up novelties for my wife without worrying about what else I might be giving up later.
Taking my 8 year old daughter to breakfast and discussing how well her steak and eggs were prepared.
This isn't much of an answer, but looking over the past few months, these are the main reasons I enjoy making the money I make. The TV in my living room is broken. I'm in no hurry to fix it. I drive a Jeep Wrangler, though I can afford a much nicer car. I don't have to worry about the cost of gas (for now), which means I don't have to live in dirty old DC, and can instead enjoy being by the water in Annapolis.
"Wealth is a measure of your ability to do what you would like to do, when you would like to do it - a measure of your breadth of immediately available choice."
Why do you want to narrow the definition? What about it isn't working for you?
I'm going to guess that you intuitively feel that there is "good" wealth, like a bicycle repair shop, and "bad", like speculating on housing prices.
The problem is that, at any given moment, you can't tell between the two -- they're both useful, and both have their places, and in some circumstances both are useless and counterproductive to have around.
I think the difference happens when you consider how useful they are over time. The bicycle shop is more useful in the set of all possible futures. Is there a word for that?
In my book, "bad" wealth (so to speak) would be any scheme for getting "money" (the paper thing, or the number in your bank account) without actually doing anything useful to anyone. For example, selling your shares in a bubble/ponzi company at a high price.
Sure, these shares might have been something that someone wanted, but it's a form of fraud. What you earned is what someone else ends up losing, for nothing.
I also consider most financial endeavours under a debt-money system to fall somewhere under the "fraud" category. This includes things like speculating on currency and house prices, or anything where your primary activity is hacking the monetary system.
I think we can all agree that fraud does not increase the general amount of wealth. That's why it's illegal.
As for your last paragraph, it sounds like you are in the grip of that "money as debt" video, or worse, the labor theory of value. You should also look at some more mainstream economics before you decide that the whole thing is fraud.
I'm sympathetic to your argument that some financial products are just "hacks", and don't generate value, but just like real hacking, there's another side. Such "hacks" expose weaknesses, inefficiencies, and irrationality. Now, there are some who believe in the efficient market theory, and thus believe that ANY self-interested economic action leads to an increase of information (and thus wealth) for everybody else. That's actually been pretty much empirically disproven, so it's true that there are certain financial "hacks" that are never socially beneficial. However, I would caution you not to conclude that the whole thing is just a drain on society.
> it sounds like you are in the grip of that "money as debt" video
I wouldn't word it that way. The movie, whether you like it or not, raises some valid points, and I think calling the whole system a debt-money system is a good thing, at least it raises awareness about it's nature. Most people don't have the slightest clue how money is made.
Not only that; but I think it's more accurate, factual, and honest to call it debt-money rather than "fractional reserve banking". Fractional reserve can have a different meaning: it could mean you lend out most of what people entrust you with. That would still be a fractional reserve, because you're only keeping a fraction of what's in your trust.
> but just like real hacking, there's another side. Such "hacks" expose weaknesses, inefficiencies, and irrationality.
These hacks are legalized and institutionalized, it's basically a whole industry. It's very main stream stuff.
Putting a sell order in at a given price is an indicator that you would prefer to have the cash than the item you're selling. In my book that doesn't constitute fraud since there's no deception involved.
Right on. I was just going to link to wikipedia, but you beat me to it.
Wealth has a very specific, easily quantifiable definition. For an individual or household, it's essentially your net worth. And you can actually have 'low wealth' (a.k.a you're poor).
I wish I knew what the subtext of the original question was. Can I be wealthy if I'm a school teacher or something like that?
If the question is really "What is wealthy?" I think Chris Rock's routine about 'rich' vs. 'wealthy' is as good as any. Wealthy is the point where your grandkids will never need to work a day in their life. Wealthy is getting foundations and libraries named after you. etc...
The best economic definition of wealth that I have seen is George Gilder's from his 1980 book, Wealth and Poverty. He contrasted it to resources in general, and to riches, as:
"Wealth is resources dedicated to future production."
A car used as a status symbol or personal transport is riches, one used in business to generate more income is wealth; similarly with education for enjoyment versus education for future production, and so on.
He also pointed out that since spending on the military and police is not productive, that though necessary to protect wealth, it is not itself wealth and should be used as thriftily as possible.
I think wealth as money or futures contracts should be qualified as "potential wealth" (as in potential energy).
I don't go by definitions that rely on money or definitions that rely on the net worth of individuals. The power of money is not absolute. Net Worth is a false measure in our nonlinear world.
"What people want" is only wealth to you if those people have what you want.
Wealth (what people want) can be divided into two subclasses: transferable (money, property, ...) and non-transferable (health, comfort, experiences, memories, fame, power, knowledge, ....) People generally use transferable wealth to gain the non-transferable.
People can be classified based on their patience in turning transferable wealth into non-transferable wealth. Wealth accumulators tend to be more patient in trading on transferable wealth than wealth dissipators who tend to immediately convert wealth into non-transferable form.
I have my own personal definition of wealth, which is "net contribution - net consumption". The bigger the gap you can create, the greater the wealth you experience.
Lasting wealth can only come from a pattern of giving much more than you take.
Simply making a habit of creating and contributing without looking at what you get back is the first step. Then creating the pattern of minimizing your personal needs is second. Managing risks and continuing to value things intelligently comes final.
I don't define true wealth as a numerical value. I think merely appreciating any moment in time can create true wealth.
However, I think us humans are builders and creators. We like to make new things, and coincidentally, everyone I know who is happy creates things. So no, I don't think you can be static, sitting on a pile of cash doing nothing, and still feel "wealthy".
...But I may have something wrong with me. Or I just might not have met that numeral that truly makes me feel wealthy. But then again, I am very skeptical of the power of money to make me feel wealthy. I just like to use it as an (inefficient) measuring stick.
Wealth is the ability of an entity to create change.
Skills you know, your business network, your emotional support network, assets you can exchange.
People with great wealth can affect the world in profoundly positive or negative ways. In other words, wealth is closely tied to the notion of power.
A member of congress who has relatively low networth could have as much financial influence as Bill Gates. While this power is not as liquid or easy to exchange as cash, it is still exchangeable and a store of value.
[ To directly answer the OP: No we should not exclude speculation, everything is speculation to some small degree. Even holding everything in cash is a speculation on that nation's currency. We'd have to use other measures to estimate expected security\longevity, like liquidity of assets. ]
I think you will never have a good definition, because if the answer is "what people want?" everybody want something different.
For my personal example, I do not have a lot (but a lot is here subjective) of money, enough to buy what I want (but I am frugal) and this enough for me to not think about money and have freedom of mind to think about my family, my friends and my startup. No million dollars bank account, but wealthy of experience, family with kids and friends (oh, and a lot of books, I love them).
Wealth = freedom. Freedom to do what you want, when you want to be happy. For some people, that freedom is the ability to take your kids to/from school every day, coach their sports teams, and go on a yearly vacation. For others, it's to buy expensive cars, live in big houses, and go on crazy trips. Totally different in terms of money, but the same in wealth.
Wealth is an abstract noun encompassing all of the physical objects that are considered a store of value that one may possess. Of course now that some abstract entities like information or promissory notes also have monetary values attached to them, they too can be considered as wealth.
You cannot exclude things that "people want simply because they believe others will want them more later". Money is one of those things. If an oracle told you the American empire will crumble tomorrow, you'd do well in getting rid of all your US dollars.
for me, wealth is potential for future freedom from constraints on life choices. Money is one format, relationships, friendships and favours owed are another; education also counts, as do health, fitness and certain key possessions (but not so many that dealing with them constrains you; thus actually, very few, and mostly of a tool-like nature). Some of these things are not distinct, exclusive goods, but can be shared or copied amongst large groups. Focusing on doing so without being distracted on needlessly stocking (maximising) the un-shareable (distinct) parts of wealth, is a productive way forward for humanity.
It strongly depends on the perspective. I think many people would define "wealth" as not having to go to bed hungry and being able to send kids to school.
Not having any logical reason to worry about money. Meaning that you have enough money so that should you care to set things up the right way, you'll likely have enough income to live where ever you want for the rest of your life. Happiness and health are another matter, but without money, it's difficult to have either of those things.
Years ago, when my father was very sick, I made a stupid remark like, "Maybe you can get some financial benefit from this." He responded, "I'd trade everything to be healthy again."
Sometimes it takes extremely trying circumstances to really put things into perspective. Ever since that conversation, I have never looked at the subjects of health, wealth, or happiness in the same way.