Redefining wealth
Financial advisors and bankers used to discreetly classify their wealthy clients according to a finely calibrated chart. This chart, with the ongoing, crippling crisis of pandemic and quarantine lockdown, would show starkly different numbers from the original. They are redefining wealth.
However, one can glance back at what life used to be when the economy was stable and the markets were strong. The outlook was bright and the attitude was upbeat.
The investment banker JP Morgan once said, “You can buy what you want, do what you want, and not give a damn what it costs.”
In a world that has been obsessed with material success and wealth, rich has different definitions.
It is a quality that describes a lifestyle or the elements that project an ideal image.
It is a state of mind, an attitude. In this context, one can have material possessions but be impoverished in mind and spirit. One can be poor in financial terms but be rich spiritually.
The rich are a class apart and above the crowd. They are envied by people (who think that money is so important). They sometimes feel impervious to what the rest of the world has to say.
It is necessary to qualify that, although the rich are insulated from many problems of survival, they are not invulnerable. Their larger-thanlife problems are different from those of ordinary mortals. How to keep their money intact, how to increase/preserve investments, how to avoid paying exorbitant taxes, and how to save face. When wealth is suddenly diminished, some of the uber rich suffer severe depression, desperation. (A few people cannot cope with loss of stature so they commit suicide.)
One is considered rich if one can meet the demands of his imagination. In this mode of thought, rich people satisfy their whims by spending huge amounts of money. They get a buyer’s high. Their passion is to acquire expensive possessions such as property, toys and people — such as trophy friends. The problem of this attitude is not knowing when enough is enough.
The phrase “high net worth” used to apply to clients, investors with at least $/Euros 5 million. It depends on the markets. “Substantial wealth” described clients worth more than $/Euros 100. These estimates have changed drastically because of the financial tsunami.
The individuals who have lost their fortunes are called “discontinuities.” A witty, formerly exiled member of the old society oligarchy deprecatingly called himself “nouveau pauvre” (new poor), the aristocratic genteel set. Although he was still wealthy, he wisely chose to live low key.
Money is currency. Financial institutions do not distinguish between new money (nouveau riche) and old money. The distinction is for social scientists and society arbiters to comment, speculate, or classify. In the past two centuries, historians wrote about how people built their fortunes from industries such as steel, automobiles, ships, trains, and gold mines.
In the Philippine context, old money is vintage money, or wealth that has stayed in the family for four generations, to the early 20th century. That era would be the 1930s (pre-World War II). Anything acquired after the war would be considered new money.
Money, like good wine, should be aged properly. People who have money are distinguished from one another by the manners and mannerisms. The old rich hide it. The new rich flaunt it. This is not PC — politically correct — during the crisis, hard times.
John Jacob Astor once remarked that a rich man had assets worth a million dollars. That was when the purchasing power of one dollar was equivalent to today’s $40 plus.
Two decades ago, bankers and brokers said someone with an annual income of a million dollars defined a millionaire. There was a fine but notable distinction.
Rich people were generally categorized according to age and source of their wealth.
The heirs who have inherited from their ancestors. The rich and famous who are famous because they have money. The rich and powerful who wield power because of their wealth. The individuals who acquired their money through their power.
The sub-groups are the old rich — working, idle, and useless rich.
The robber barons made their fortunes through dubious activities like manufacturing liquor during the prohibition years, supplying arms, fuel and vehicles to the enemy during the war.
The entrepreneurs made their fortunes through honest hard work, vision, grit, determination, good timing, and luck.
The arrivistes who are socially ambitious and the fortune hunters who married into money.
The cronies who use political influence and connections. Some are recycled holdovers and many are opportunists.
The filthy rich are the vice lords, pyramid schemers, people who do human trafficking, smugglers, gun runners, drug lords, cybercriminals.
The miserable rich are the irrelevant misers who penny-pinch, hoard, and worry about their millions but are too tight-fisted to share with the needy.
The philanthropists are the generous individuals who share their wealth through corporate foundations (taxdeductible) or anonymously from their personal pockets. This is a broad category that includes every enlightened and aware individual who wants to give to others.
The amounts donated to the right beneficiaries do not matter. It is the spirit of giving and sincerity that is much more important and valuable than actual numbers. These are the admirable rich people who are worth emulating.