So what’s your net worth? Are you happy with it? Do you think you have enough? Do you compare yourself to others and think you can do better? Or thank your lucky stars for what you have already?
Felix Dennis, the now deceased publishing magnate and poet, wrote a very amusing book, How to Get Rich about how he’d built a personal fortune of over £500m. One of the more memorable passages in the book was where Dennis gives his opinion on what kind of money makes you rich. (I remembered this as I read Fire V London’s blog post on salary bandings in the capital city.)
We don’t often hear rich people defining wealth from their perspective, so here is the world of money according to Felix, a semi-billionaire:
Comfortably poor: £50k-£199k in liquid assets; £1m-£2m in total assets
Comfortably off: £200k-£499k in liquid assets; £3m-£4m in total assets
Comfortably wealthy: £500k-£999k in liquid assets; £5m-£15m in total assets
Lesser rich: £1m-£5m in liquid assets; £16m-£39m in total assets
Comfortably rich: £6m-£15m in liquid assets; £40m-£74m in total assets
Rich: £16m-£35m in liquid assets; £75m-£99m in total assets
Seriously rich: £36m-£49m in liquid assets; £100m-£199m in total assets
Truly rich: £50m-£100m in liquid assets; £200m-£399m in total assets
Super rich: Over £100m in liquid assets; over £1bn in total assets
I think by his own definition that Dennis falls into the banding of the “Truly Rich”. Interestingly not the Super Rich. That’s because, from what I’ve heard, rich people are somewhat obsessed by the people they know who are slightly richer than them. That’s why Warren Buffet was recently overheard saying, “That Bill Gates. He lucked into his money. If he’d been born thirty years earlier he’d be flipping burgers”. Okay, I made that up, but Buffet might have said it if he’s anything like a lot of rich people. I mean, I thought it was interesting that someone like Felix Dennis would even categorise money in the way that he has. He’s accumulated way more wealth than he could ever spend, but he’s still wondering where he sits in the scheme of things.
You can bet your life that some of the most avid readers of the Sunday Times Rich List will be the multi-millionaires and billionaires, but it’s a safe bet they’ll only be reading the page they feature on. That’s because they’re obsessed with their peers and what they’ve got. (Seemingly they’re also terrified of losing it all too, although most would never admit this, even to themselves. It’s a big part of what drives them though.)
I’m speaking here only slightly from my own experience of meeting rich people. When working, I often had the company of some seriously rich individuals and it never ceased to amaze me how fixated on money they were. But they were even more fixated on the money that their peer group might have. One of my friends, an ex-fund manager in the city, backed up my observation, saying he was absolutely fed up of listening to clients worth £400m moaning and griping about their lucky neighbour or colleague who was worth £50m more than them.
I’m sure we all can relate to this though. When I used to have a company car, I would obsess about the next car up on the list, not a Ferrari or Lamborghini. Similarly, when I had a two bedroom house, all I could think of was affording a three bedroom one, not some country mansion with fifteen bathrooms. As for my mates who I suspected earned slightly more than myself, well, clearly they were just lucky. People I knew from school who were multi-millionaires….wait a minute, there weren’t any, so I never spared a thought for them!
The interesting thing about the book How to Get Rich, however, is that it’s quite anti-money. The message is that if you’re chasing Manon, then you’re chasing a false god. This is no self-help manual about how to make millions. It is, instead, a questioning of why you’d want to earn millions in the first place. Why squander the finite hours you have on this planet to chase money, when there’s so many other life enriching things you could be doing? Such as writing poetry, or planting trees, which became Dennis’s obsessions in his later life. Following these pastimes made him really happy and fulfilled, whereas building a fortune drove him only to drink, drugs, hookers and unhappiness (eventually. He seems to have quite enjoyed it at the time!) He seemed almost sad to have come to the realisation too late that he could have lived a different life that required very little money, but might have offered the solace and fulfillment he found in walking through a forest or in penning a sonnet.
So, what’s your net worth? Or, more importantly, how much does it really matter compared with what else you could do with your life?