Many of us wonder what we are worth. I’m not talking about what we’re worth as people, which is an entirely different subject. Here, I’m talking about what we are worth in monetary terms.
Determining our net worth in monetary terms is simple. For example, you can add up the value of all your assets, such as your home, your landed properties, your cars, your savings accounts, your investment accounts, your retirement accounts, and so on. Then, you subtract all your debts and other outstanding liabilities from these assets. The resulting number is your net worth.
Now, what if I have accumulated a lot of assets through corrupt means? In such a case, what I have in my possession can’t really be considered as mine because they belong to others in the first place. These illegally acquired “assets” must be returned. And after all this, what still remains is my true net worth.
The net worth of people can be broadly divided into four categories. They are as follows:
The Super-Rich: These people work extremely hard to get where they are. They buy things, as a general rule, with cash. For example, Bill Gates, the richest man alive on earth, bought a custom-built house costing $40 million in 1997. This is what the super-rich do to avoid getting into debts or piling up interest payments on loan. Or, take the example of Warren Buffett. Despite being the second richest man, Mr. Buffett still lives in the same 3-bedroom house which he bought after he got married more than 50 years ago. He drives his own car everywhere and doesn’t even have a driver, let alone security guards around him. He never travels by private jet, although he owns the world’s largest private jet company.
Typically, the super-rich aren’t in the habits of spending on everything and anything they want to have. As consumers they tend to be moderate and economically conservative. They neither show nor care to display their high economic status. But they are extremely passionate about their work and for savings and investing. When they become wealthy or gain control over their financial destiny, they contribute their time and resources freely to charitable organizations and struggling communities.
The High Income-Low Net Worth: Most people in this category typically draw their identity from their jobs and believe that they are successful if they earn a lot of money. They tend to spend up to their level of income. They spend more money, even if that means taking loans, to buy larger homes. But in getting what they want, they end up paying a bigger mortgage, higher property taxes, and spending more money on maintenance and decorating with all sorts of expensive trappings. To impress their friends and neighbors, they choose to live in upscale neighborhoods, wear brand name clothing, and drive luxury automobiles. Without a doubt, they work very hard to support their extravagant lifestyle, but they have very little to show in terms of their net worth because they aren’t disciplined savers and can’t sacrifice a high-consumption lifestyle in favor of investing for their future.
The High Income-High Net Worth: These people know that income spent frivolously is money wasted and gone. In good times and bad, they buy what is useful and needed, and always look for quality. Since they are bottom-line focused, they will ask themselves whether it is worthwhile to spend the extra money on a new car or to invest in something that can yield profits down the road. As such, they don’t concern themselves with luxury vehicles or big buildings just for the sake of showing off. Rather, they would watch their money increase through investments.
Now coming to our Naga people, I’m very confident that almost all our gazetted-level officers in government services could easily learn to spend less and save more for investment in order to become crorpatis. Yes, they can do it if they invest at least 15 percent of their gross earnings and consistently invest them in stock purchases, mutual funds, and/or real estate.
(
Note: In my last article, I mistakenly put 1 million US dollars as the equivalent to Rs.68.4 lakhs. This was a miscalculation. If the conversion rate of $1 is Rs.65, then a 1 million US dollars would be Rs.65 millions or Rs.650 lakhs or Rs.6.5 crores.)
Low Income-High Net Worth: Many ordinary Nagas can fit into this category because they have inherited properties, such as long stretches of raw land or forests where there can grow all kinds of things, or lease their properties, for a profit so that they can invest a portion of their earnings each month. Contrary to popular opinions, most people who have attained great wealth will tell us that it doesn’t take too much to become wealthy. But, at the same time, they will say that two things are absolutely necessary to become wealthy: (1) Live well below your means so you will have extra income to invest, and (2) invest in some reliable investment plans over a long period of time.
Not every one of us may aspire to be super-rich. As a matter of fact, it’s alright if some of us don’t become even crorpatis. But I believe that many of us, including our farmers and manual workers, can at least become lakhpatis. For sure, becoming wealthy isn’t easy. But it isn’t very complicated or impossible to achieve either---only if we are willing to pay the price and go through the path of self-discipline and careful financial planning.
