Thursday, March 17, 2011

Enough Wealth?

In the midst of a horrendous earthquake and tsunami in Japan which has already claimed 11,000 people, a brutal crackdown on rebel forces in Libya and more subtle crackdown on dissent in Saudi Arabia, a complete selling out of any democratic values or process by the Republicans in Wisconsin, and the usual reports of war and famine all over the world, the business section of the San Francisco Chronicle (March 15, 2011) picked up a story written by Elizabeth Ody for Bloomberg News called “Not Feeling Wealthy?  Would $7.5 million make it better?”

And I read it because there is nothing like other people’s money to get your mind off other people’s problems.  According to this story, in a survey of 1,000 households with an average of $3.5 million in investable assets, 42% of respondents said they do not feel wealthy, feeling they would need about $7.5 million to feel rich.  In other words, these households who are in the top 5% of the US population, need more than twice as much as they already have in order to feel wealthy.  The 58% of respondents who already (and sensibly) do feel wealthy right now at $3.5 million, are by and large younger and have more time to earn even more money. 

Sanjiv Mirchandani, President of National Financial, commented kindly, “Wealth is relative, and to some extent the more you have the more you realize how much more you need.”  Someone else might have substituted “addictive” for “relative” and “how much more you can buy” for “how much more you need.” 

According to this same article, the 5.5 million US households with at least $1 million is assets, control 56% of the country’s wealth.  These same people planned on giving $38,000 to charity in 2010, up from $36,000 in 2009.  Of course, the $38,000 they plan to give will actually only cost them $23,000 because of the tax bracket they are in and the charitable tax deduction they will get. 

I admit my own hypocrisy in judging this top 5% of households.   I have also found money to be addictive.  The more I earn, the more I spend.  Ten years ago I felt good about earning $50,000 a year, and now I would find it hard to live on that, and it is not because of inflation or the rising cost of health care, although those are factors.  It is because I look around me and see how people of my age and station live and what they live on, and I compare myself to them.  What gets me passed that frame of reference is remembering that financial wealth is not real wealth. 

Rough social equity, the goal of a commons based society, requires a redefining of what it means to be wealthy.  This article focuses only on money:  perhaps in a different survey these same people might mention their health, their children, their sense of meaning and purpose as a source of wealth.  But no one asks about that or adds that up as part of our liquid assets.  Until we measure our common wealth (friends, leisure time, wilderness, history and culture, access to clean air and water, etc) as wealth, we will have neither a commons based society, nor,  ironically, actual wealth. 

1 comment:

Mazarine said...

When I read Michael Moore's Speech on how 400 Americans have the same amount of money as half of the rest of America combined, I just felt a chill. Is this what our nation is coming to?

I wrote a post about this here:

And I'd love to get your thoughts on it.

Reading your post about how money and wealth are not the same thing, and how wealth should also be measured in your connections with your community is an important distinction.

I'm shocked that people in the top 5% of the elite of this country would not feel as if they are wealthy enough with $3.5M.

It makes me wonder if this makes them less inclined to be charitable, since they want to be twice as wealthy?