“Wealth is something you build, and you don’t do it for yourself. You build wealth for your family.”
Painkiller is a limited series on Netflix. It is a story about how Oxycontin was abused and killed many people in the United States. The drug is the trade name for oxycodone that is used to treat moderate to severe pain.
The series was told through the character Edie Flowers who is the federal investigator who unravels the danger brought by the drug created and sold by Purdue Pharma. The company worked with Curtis Wright from FDA and was able to sell the drug in spite of knowing it is highly addictive and can cause death.
I am not writing to talk about the show. I am writing because of the line (in the first paragraph) in one of the episodes when the young Richard Sackler was talking to his uncle, Arthur Sackler (played by Clark Gregg).
Richard Sackler, played by Matthew Broderick, led Purdue Pharma to successfully sell Oxycontin and win every battle that prevented them from distributing it.
Arthur Sackler, the person who started building wealth through the effective marketing of medicines, was clear on this when he asked Richard’s father to return the diamonds he bought.
Does having nice things mean you are wealthy? Do you even need to flaunt your richness and what you can afford? What does it really mean to be wealthy?
This is what I want to talk about.
What is wealth?
Wealth is attributed to net worth in terms of monetary value. However, wealth is not just about money or possession. It can also be about abundance of something. It could be friends, knowledge, health, or anything that contributes to to our well-being.
For the purpose of this blog, I am going to stick to its meaning in relation to monetary value. That means, this is going to be about being wealthy by having an abundance of money. Additionally, this is going to make us realize that building wealth is not for ourselves but for family and future generations, just like what Arthur Sackler said.
Before we go any further, let me take you through what monetary wealth is all about and how is it determined.
Wealth is net worth. It is the difference between your assets and your liabilities. Assets are things you own that produce income. For example, when you buy stocks and you earn dividends, the stock is considered an asset. Or a house you own and you are renting it out, it is considered an asset as it generates rental income. In short, and again, anything that produces income for you can be considered asset.
Savings and insurance may be classified as assets as they produce monetary value more than what it costs you. It maybe small or take a while but still considered as assets.
Liabilities, on the other hand, are things that create expenses or debts. These, in comparison to assets, make you lose money as you pay out these expenses and debts. Some examples are cars that you use for personal concerns and the house that you live in by paying rent, amortization, or mortgage. The credit card and utilities bills can also be considered as liabilities.
The difference between assets and liabilities is net worth. The bigger the positive difference, the wealthier you are. And of course, if it is a negative net worth, meaning the liabilities are higher than assets, then you are not wealthy. You are just poor.
This is just one way to measure wealth. Let us keep this in mind while we go through this blog.
Not for you
Building wealth takes time. It takes years, decades, or even generations, to have a significant amount of it. Of course, there would be people, like Arthur Sackler, who made his wealth during his lifetime by selling medicines however, he was not the one who enjoyed that wealth.
Our children. Our children’s children. The next generation. Our descendants. These are the people who will enjoy the fruits of our labor when we build wealth. They get to experience the most comfortable life. They get to enjoy the best of what life has to offer. They are the ones who will benefit the most from what we have built. They are the ones who will take advantage of whatever amass of money of fortune we have left behind.
And if that is not your reason for building your wealth, then you will never be able to do it.
Quick bucks. Rich overnight schemes. Be rich now. This type of mentality is what keeps us where we are now. We want to get rich quickly. We want to have more money. We want to have a big bank account. So we could all feel rich and afford the luxuries in life. With this mindset, we are all so focused on the now. While we intend to leave what we gain to our children, at the back of our heads, we still say it is mine, and we are entitled to enjoy the fruits of our labor, now.
Additionally, with this kind of thinking, we are reluctant to build our assets. For example, life insurance is an investment that costs you buy will provide benefits and rewards to your family. Or buying stocks that earn 10-40% interest in a span of 10-20 years but we are not willing to invest because by the time it earns it yields, we are already dead. How do we enjoy that then?
Wealth is for others
My wife and I started with 0 savings. We rented out an apartment with our son with us draining what we had in our bank to start our own lives together.
Her mom died with her grandchildren without a home. They were kicked out of the house they were renting and they had to look for another place. They are now living in a house owned by my father-in-law’s sister.
Things like these are a wake-up call for us. We are now on a mission to ensure that our children, our son, and two daughters, will have their own house that they can call their own. We are also working on keeping our savings and investments up so that they can use them to live the life they want without worrying about where to get the money for tomorrow’s food, which we had been through.
We have also life insurance that has them as beneficiaries. Whatever happens to us, they will give them a substantial amount to support their lives and stand on their own if we leave this world early.
Going beyond that, our investments are targeted at earning money for their children too. It may not be huge now but it will definitely be a very substantial amount of money for their children and their children’s children.
On top of this, we try to instill in them the value of money. We try to teach them the purpose of buying. We do, as much as possible, show them a balance life between enjoying luxury and when to spend only for the need. Be frugal.
Build it for others
In summary, the wealth you are building is not for you. You must think about the future generation. Look back and see your struggles. Are those things you would like your descendants to experience too? Because if so, then the world will not progress.
Bong Ravena, a famous Philippine basketball player, played for the University of the East (UE) in college. He was asked why did he enrolled his sons in other schools to play basketball instead of UE. His answer was he wanted to give his children better education.
That is an example of giving your children the advantage in life that can be your legacy. It is not about having them experience what you have gone through. It is about giving them an advantage to better thrive in life.
And that is what it means when we say wealth is not for you. You build wealth for your family.
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