What is Wealth: The Riches Beyond Investments.

In a world obsessed with numbers, you’ll agree that most people equate success and happiness with financial wealth. It is important to challenge this notion that the quality of one’s life is solely determined by the amount of money one possesses. 

But take a minute and think about what being rich is about. 

The renowned Robert Reich, an economist extraordinaire, once said, “Real wealth is beyond just cash, be it liquid or in assets. It’s the power to get what you need.” 

In this article, we will dig into this deep idea that goes beyond having lots of money and check out all the cool sides of true success.

Table of Contents

    What is Wealth?

    Wealth is often associated with scenes straight out of the movies, music videos, or even social media posts — luxury mansions, 5-star hotels, pricy diamond jewelry, fancy cars, private jet rides, mega-yachts, and high net worth. 

    In Robert Kiyosaki’s best-selling finance book, “Rich Dad, Poor Dad,” he defines wealth as: 

    “The definition of wealth is the number of days you can survive without physically working (or anyone else in your household physically working) and still maintain your standard of living.”

    In other words, the essence of wealth is more than just numbers or a lavish lifestyle; it’s about striking a balance between the tangible aspects (material things) and intangible aspects that contribute to a life of purpose, fulfillment, and positive influence on the world, including good relationships.

    The true essence of wealth embodies;

    • Physical Wealth (Health)
    • Time Wealth (Freedom)
    • Social Wealth (Status and good relationships)
    • Financial Wealth (Assets)

    So, a truly wealthy person has all these different aspects of wealth that are well-managed and balanced. 

    But how important is the financial side of things?

    Financial Resources

    Think about financial resources as one of the tools in life’s toolkit available to an individual, organization, or government to meet financial needs. Financial resources comprise the money you earn (income), savings, investments, acquired assets, and other things that can be converted into funds as and when needed.

    Every one of these serves a special purpose, and knowing how to use them wisely can make a significant difference in your financial journey.

    The idea of financial resources is not limited to cash or liquid assets; rather, it covers a wider range of assets and capacities that support financial stability. For individuals, these may include real estate, savings, credit facilities, stocks, bonds, retirement funds, and insurance coverage.

    Net Worth

    Net worth is assets minus liabilities. Or, you can think of net worth as everything you own less all that you owe.

    To calculate your net worth, take inventory of what you own, as well as your outstanding debt. And when we say own, we include assets that you may still be paying for, such as a car or a house.

    For example, if you have a mortgage on a house with a market value of $300,000 and the balance on your loan is $250,000, you can add $50,000 to your net worth.

    What is wealth

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    The formula is:


    And by the way, your income is not included in a net worth calculation. A person can bring home a big paycheck but have a low net worth if they spend most of their money. On the other hand, even people with modest incomes can accumulate significant wealth and a high net worth if they buy appreciating assets, and are prudent spenders and savers.

    what is wealth

    Means and medians notwithstanding, there are steps you can take to increase your net worth.

    Pay down debt. Tackling debt reduces your liabilities. The fewer obligations you have, the more your assets can be used for your financial benefit. Consider using the snowball or avalanche method to get ahead of your debt.

    Increase your income. If possible, boost your gross income by asking for a raise at work or by starting a side hustle. You may also research ways to start a passive income stream, like through dividend investing or buying and renting out real estate.

    Add more to your retirement and investment accounts. Steady contributions to tax-advantaged accounts can help you build wealth and increase your monetary value over time. You can also add more to taxable investment accounts to boost your net worth while retaining access to liquidity.

    Intangible Assets

    Understanding intangible assets might feel like grabbing onto thin air. It’s literally in the name—intangible. Yet, just because you can’t physically hold them doesn’t mean you can’t wrap your head around them. 

    So, let’s dive into what intangible assets are, figure out how to put a value on them, and sort out how to include them in your money documents.

    What are Intangible Assets?

    An intangible asset is a resource that has no physical presence and has long-term value for a business. 

    These are considered intangible assets:

    Brand equity (recognition), Intellectual property (i.e. know-how), Company reputation, Goodwill, Copyrights, Trademarks, Patents, Franchises, Intellectual property, Customer lists, Domain names, Employment contracts, Licensing agreements, Lease agreements, Client relationships.

    They have value because a business has sole legal or intellectual rights to them and they can help buy back destroyed tangible assets.

    Purpose of Intangible Assets in Business

    Intangible assets improve a small business’s long-term worth as have value thanks to the sole legal or intellectual rights they enjoy. Intangible assets also improve the value of other assets. And some companies have intangible assets that are worth far more than their tangible assets.

    Intangible assets can’t be used as a guarantee (“collateral”) to get loans, unlike tangible assets that lenders can seize if the loan isn’t paid back.

    But if a company’s tangible resources are destroyed then its intangible assets can help rebuild them.

    Destroying Intangible Assets

    Tangible assets like buildings and machinery can be destroyed by fires and floods. However intangible assets can also be destroyed.

    Bankruptcy or other failure of a business will eliminate a business’s intangible assets. Not being careful enough with one’s intangible assets can also diminish or destroy their value.

    What Are the Types of Intangible Assets?

    Limited-Life Intangible Assets:

    These assets have a limited life span. They include goodwill, copyright, and patents.

    Unlimited-Life Intangible Assets:

    These assets don’t have a definite lifespan and include trademarks or brands. It’s impossible to tell how long a trademark will have value, unlike a patent which has a legal expiry date.

    Building Wealth: Strategies for Success

    The shaky economic scene is giving everyone’s wallets a serious run for their money.

    Most people are using their savings to deal with the cost-of-living crisis, some households have seen an increase in rent or mortgage payments, and gas and electricity bills have gone up pretty much across the board.

    Take a moment now to rethink where you stand financially, and plot a down-to-earth path for the coming year. In other words, draw up a financial plan to concentrate on what’s in your hands, inject a bit of certainty, and ease one worry off your plate.

    What is a financial plan?

    A financial plan is the full scoop on your money game. It’s like a big snapshot of where your cash stands now, what dreams you’re chasing with your money, and all the clever moves you’re making to catch those dreams. 

    Good financial planning should include details about your cash flow, savings, debt, investments, insurance, and any other elements of your financial life., everything that makes your wallet tick.

    How is financial planning different?

    Financial planning is an ongoing process that looks at your entire financial situation to create strategies for achieving your short- and long-term goals.

    Creating a financial plan is essential because it allows you to make the most of your assets and gives you the confidence to weather any bumps along the way. 

    You can make a financial plan yourself, but it is advisable to get help from a financial planning professional like Wealth Nation, whose services have also made getting assistance with financial planning more affordable and accessible than ever.

    Follow these simple steps to get started building sustainable wealth.

    1. Create a budget

    One of the most important things you can do to manage your money is to create a budget. This will help you track your income and expenses, so you can see where your money is going and make adjustments as needed.

    2. Save consistently

    Saving money is essential to building wealth. It is important to save a portion of your income each month, even if it is just a small amount. Setting up automatic transfers to a savings account can make it easier to save consistently.

    3. Avoid high-interest debt

    High-interest debt can be a major obstacle to building wealth. It is important to avoid taking on too much debt and to pay off any high-interest debt as quickly as possible.

    4. Invest wisely

    Investing your money can help it grow over time. It is important to do your research and invest in assets that align with your goals and risk tolerance.

    5. Continuously educate yourself

    Financial education is key to building wealth over time. It’s important to continuously learn about personal finance, investing, and other topics that can help you manage your money more effectively.

    6. Have multiple streams of income

    Diversifying your income streams can help to increase your earning potential and help you build wealth faster. By having multiple streams of income, you can reduce your financial risks and make it easier to reach your financial goals.

    7. Be patient

    Building wealth takes time, and it is important to be patient. Avoid making impulsive financial decisions, and instead focus on building a solid foundation for your finances.

    Why is generational wealth important?

    You’ll agree that wealth gives you more options in life. 

    Generational wealth is important because you have more freedom to think and live the life you want when you don’t have to worry about paying your bills or whether you can afford to quit a job that doesn’t fulfill you.

    But why should you care about passing down wealth to the next generation? 

    Of course, building generational wealth does not mean you stop your kids from ever experiencing hardships in life but it is about giving your children more options in life. 

    Here are a few ways to build generational wealth:

    1. Invest in your child’s education

    Raising financially independent adults is important if you want to build lasting wealth.

    You can help your kids create a path to support themselves by teaching them about personal finance. Giving your kids a financial education is one of the most important things you can do to start building generational wealth. It starts with having open conversations about money at home so your kids know they can ask questions.

    2. Invest in the stock market

    Investing in the stock market provides an opportunity to build wealth passively and protect your money from inflation. Most people who invest in the stock market with a long-term plan and diversify their portfolios generally increase their assets over time.

    3. Invest in real estate

    Real estate can be a great tool to build wealth. Real estate generally appreciates with time. In addition, real estate can provide cash flow opportunities for investors.

    4. Create a business to pass down

    More than 30% of family-owned businesses are estimated to have made it to the second generation. So, building a business to pass down to your children is another way to build generational wealth.

    5. Take advantage of life insurance

    Life insurance is a great tool to pass down wealth. It provides a safety net for your family if you were to die unexpectedly. If you have children or dependents who rely on your income, their financial situation would be negatively impacted by an eventual passing.

    Term life insurance can be an affordable option to ensure that your loved ones would be financially cared for if you were no longer here to provide for them. Losing a loved one is difficult in itself; alleviating the stress by making sure that they are financially secure through a life insurance policy will help them focus on grieving. Here’s a resource to help you determine how much life insurance is appropriate.

    How to pass down generational wealth

    A critical step in building generational wealth is to create an estate plan that will ensure that in the event of death or incapacitation, your assets will be divided according to your wishes.

    There are several steps that one can take to pass down generational wealth. 

    • Write a will

    A will should provide specific instructions on your last wishes and assets. Understanding the requirements in your state is very important to ensure that your will is enforceable. Also, when you have young children, a will helps communicate your wishes regarding their care. 

    You can also list your financial assets to make it easier for your family members to locate them. When you don’t have a will, you leave the decision up to the state when it comes to your children, property, and assets.

    • Set up a trust

    A trust, commonly referred to as a trust fund, is a legal entity you can use to hold and transfer assets to your beneficiaries. It is another option to consider for parents of minor children. 

    Trusts can be expensive, but they also provide other benefits such as avoiding or reducing estate and gift taxes depending on the size of your estate.

    • Name account beneficiaries

    To ensure that your assets pass down to the beneficiaries of your choice, it is sometimes as easy as naming specific beneficiaries for each account. Naming beneficiaries can save your loved ones a lot of time and energy in the event of your death, especially if they are adults.

    Proper estate planning is an essential part of passing down generational wealth. Therefore, it’s important to consult with an estate attorney to ensure that you have a solid estate plan.

    What is Wealth Management?

    A wealth manager is a financial advisor who specializes in working with clients who have high net worth. They also offer advice on a variety of financial aspects beyond your physical assets. As your wealth grows, your finances become more complex, which is where wealth managers can provide their tailored expertise.

    Wealth management might focus on retirement planning and tax planning alongside insurance protection, estate planning, and trust management. These professionals may also offer future services than the typical financial advisor to cater to the complex needs of their client’s financial situation. A wealth manager is likely to be a fiduciary but be sure to ask before signing on.

    Working with a Financial Advisor

    Not all wealth management services or firms have the same strategy for every client. Depending on your situation, you may want to focus on growing your investments, optimizing your tax planning, or creating a succession plan if you own a business.

    If you have a lower net worth but want to grow your money, it may be worth considering an asset manager instead of a wealth manager.

    Private wealth management is primarily useful to high-net-worth individuals.

    Several types of institutions, from large banks to small family offices, provide private wealth management.

    Private wealth managers generally charge a small fee based on the assets under management and can aid with tax strategy, retirement planning, estate planning, and major life events.


    So, in wrapping up our exploration, let’s redefine wealth as more than just the usual suspects—assets and cash. We’ve journeyed through financial resources, net worth, and those elusive intangible assets, realizing that the real richness goes way beyond what you can touch.

    The strategies for success are like building blocks in this grand financial game. Crafting a solid financial plan, socking away some cash for the future, and dabbling in the world of investment options—all these moves painted a vibrant picture of wealth creation.

    Having peeked into the world of generational wealth, you discovered that it’s not just about today; it’s about leaving a legacy that keeps the good times rolling for generations down the line.

    And then there’s wealth management—a bit like having a financial wizard by your side. Understanding the ropes, teaming up with a financial advisor, and throwing life insurance into the mix as your secret weapon for financial freedom—it’s all part of this grand, complex dance of wealth.

    So, let’s remember: wealth isn’t just about the numbers on paper. It’s the power to shape your destiny, ensuring a secure today and an even better tomorrow for you and yours. As we redefine wealth, let’s celebrate not just the dollars but the freedom, security, and the lasting impact it brings to our lives and the ones we love. Cheers to a wealthier, brighter future!