'Wealth' -- the word has many connotations and means a lot of things to lot of us. But that said most viewpoints would culminate at the same focal point - that is of having money, which in turn may be in many forms so to say.
Also, all the time, all of us are trying to obtain more and more of it in the way we feel most prudent. So then the obvious question that arises is why is it that very few have most of it and most of us generally keep striving all our lives to obtain it - but wealth still eludes us? Why is it that if we don't get it then it's the fault of our destiny or something similar?
Why is there an imbalance in our society if we are attempting to do things common to all of us?
Wealth has four fundamental truths and in my view, if we are completely plugged to these facts there tends to be more clarity.
Right of wealth
Everyone has the right to wealth. There is nothing wrong for men and women to desire wealth and desiring wealth is a praiseworthy trait for normal people. The question is; do you really desire wealth?
This is not as obvious as you think - if you think really hard or closely observe people around you, you will notice that people are not so ambitious about wealth per se as much as they might be about their career. The fact is if you do not really desire wealth you will never feel that you have the right to own it. It is like freedom of speech - if you basically don't desire to talk you will hardly ever feel the right to freedom of speech.
There are no reservations or VIP access only or restrictions - governmental or otherwise for ownership of wealth. It is everyone's right, just that very few recognise it and even fewer exercise this right. Only if you really desire wealth, will you begin to explore avenues and be open to ideas that generate and maximise wealth.
Equality of wealth
This is a subject matter of cause and effect. If all were to do the same thing the effect will be the same. Assume that a share quoting at Rs 200 doubled to Rs 400 in say three years.
If all invested into it, all would have made a 100 per cent profit in three years time. But that hardly happens. Wealth is available for all and there is complete equality available in ownership without any bias or discrimination. Let's not forget the share price has actually doubled - what you chose to do during that three-year period was your decision.
Knowledge of wealth
Understanding the concept of wealth is the most essential of all knowledge. It is not about knowing which is the best investment product available or which stock is likely to double next month etc., it is about financial discipline and strategy.
When we get the money, we tend to misuse it by overspending and abuse it by simply dumping it into some product which may not even keep pace with inflation and in the long run it starts to erode money, for example; an endowment assurance policy or say RBI bond etc.
To start with most believe in the mantra of 'Do it yourself', then look at seemingly friendly agents/brokers/bank advisors etc. Finally, when you are working with qualified professionals your chances of having refined knowledge of wealth and its management are far better.
Movement of wealth
Wealth moves - from one to another - be it companies, families, generations. It can be yours too. It will also move to you. Once it moves to you, what you do of it becomes important, whether you expand it or extinguish it.
We have learnt this as a part of history, more recently we have seen this happening amongst affluent families and family run business houses. You may also have witnessed this more closely amongst your own family, related families and families of friends.
Times change and affluence of a few decades turns into bankruptcy later. Most family run businesses do not continue beyond 2/3 generations for a variety of reasons within which management of wealth is primary - think on this.
That said wealth has a self-generating capacity and this process can be unending. The question is do we divert it initially in the right direction and ensure that it stays in the right direction given the changing financial environment and times.
Generally, there is a very shallow understanding of the concept of wealth amongst most people. The rich business owners teach their children and the secret passes sometimes through generations. But for us the first principle for ownership of wealth is 'being strongly desirous to own wealth' and if the desire is absent which is also okay then nothing really matters.
Kartik Jhaveri, an expert at Financial Planning, is a Certified Financial Planner and a Chartered Wealth Manager. He may be reached at kartik.jhaveri@transcend-india.com
Disclaimer:
The contents of the above articles are the intellectual property and copyright of the author, Kartik Jhaveri. No part may be used or reproduced in any form or manner. If you choose to act upon the information contained in the above article it is at your own risk. This article is purely educative and you are strongly advised to consult an expert prior to taking any significant decision.