Are you wealthy yet? Answer these 4 questions

Are you wealthy yet?

Don’t laugh. It’s a serious question. You’ll know if you are wealthy depending on your answers to a simple four-question test later in this column.

Who knows, you might be wealthy and not know it. You could also be poor and not know it, which is more likely.

The problem here is that we don’t have a shared definition of wealth. In spite of the unrelenting attention to spending, consumption and statements of net worth that fill virtually all of our glossy magazines, the reality is that we see only wishful images of what some people imagine wealth to be and what advertisers want us to think it is. In general, being wealthy appears to be all about stuff.

In fact, if you focus on the stuff part, you’re missing the boat. A definition of wealth that I favor comes from the late economist and journalist Ferdinand Lundberg. In his 1968 epic “The Rich and the Super-Rich,” he defined being poor this way:


Got that? Wealth is about income-producing assets; it’s not about consumption stuff. Lundberg’s definition quickly eliminates the faux wealth exhibited by the folks we might call Monthly Payment Millionaires — people who flash all the stuff that makes them appear wealthy but which can disappear in a single missed sales quota, a short-term job loss or some other life hiccup. The existence of Monthly Payment Millionaires explains those strange places where it seems everyone is rich because all the cars are new, shiny and expensive.


So here is my four-question wealth test:


Does your interest income exceed what you pay in interest? With the Federal Reserve holding interest rates down, it isn’t easy to find interest income these days, but dividends are an acceptable substitute. If you answered yes because you have income from dividends, rental properties, pensions, or even patents, copyrights and royalties on your country-and-western song portfolio, that’s a pretty good sign that you are a budding rentier — a person who lives on non-work income. The more income you have from sources that don’t involve working, the closer you are to being wealthy. For retirees, Social Security can be a big part of this income.

