How wealthy are you?

Being in the newly-established National Planning Commission, I have fallen in love with the new development narrative of ‘spearheading wealth creation for all.’ This is positive thinking.  It basically throws out the ‘poverty reduction’ narrative that we have embraced as a country for many years largely defined for us by outsiders. Poverty reduction assumes that we have accepted as a country that we will be poor for ever but we will only be making efforts to reduce the levels of our poverty. So as long as we survive, we are Ok—bola moyo. Oh! Gosh!

But thinking wealth brings some energies and hope. How we will do it, it’s a discussion for another day but I promise you that it is possible and it will happen.

Let us first look at what is the conventional definition of wealth. According to Princeton Education, wealth is the state of being rich and affluent or having a plentiful supply of material goods and money. This implies social amenities too like good health, education, security and food. What I find interesting is the quote at the end of the definition ‘great wealth is not a sign of great intelligence’—implying that you don’t necessarily have to be intelligent to be wealthy (kulinsombulizachuma). But why include this is in the definition? It simply shows that it all has to do with giving people opportunities to utilise their diverse talents and potential in full.

In all fairness, wealth is a relative term. In the old Ngoni days, I understand, wealth was measured using the number of cattle heads one owned. May be that is more the reason why the dowry that is paid in the Ngoni marriages and some tribes had number of cows as units of accounts. In the old days, seeing your wife giving birth to a son should have been an eye sore, in wealth terms, as it meant giving out so many cattle heads in marriage later.

In modern times, wealth is measured more in the western context (others call it the forbes.com context) where how much money one has defines how wealthy one is—so you can be a millionaire, billionaire reflecting how much assets you have accumulated and how much money your personal bank account holds. Somehow, we have all been immersed in this definition of wealth that we sometimes think if you don’t have the millions, then you are not a wealthy person. Others have defined wealth not in terms of how much money you have at the Bank or in your house but rather the assets you have – a house, vehicles, etc.

One other wealth we have often overlooked is the social wealth—the friends and relatives you have. This wealth is defined by how many people come to your social gatherings (like birthday parties, house warming parties, etc) and those who come when you really need support or are bereaved.

What’s my definition of wealth at the individual or family level? In the simplest of terms, it is the number of months you would last living your present life style without disruption if you lost your main source of income – that’s how much wealth you have. For example, let us assume that Obrain stays in Area 10 (Lilongwe, low density) and pays rent in a house worthy K500 000 a month. He spends around K500 000 each month to buy household necessities and other leisure payments. This means he spends a total of K1 million each month to maintain his level of life style. If Obrain has K4 million (cash and other assets), then judging by his life style, he only has 4 months of wealth. In other words, if he was fired from his workplace (or if his business went bust), then he could only sustain his same level of life-style for 4 months before the landlord boots him out and he goes begging at his father-in-law’s (if he has any).

On the other hand, let us assume Ms. Molere lives in Bangwe (Blantyre, high density) and spends K5 000 on a house and K20 000 on household necessities and luxuries. This means she spends a total of K25 000 each month. If Ms. Molere has K200 000 (cash and other assets), then he has 8 months of wealth—she would survive for 8 months after losing her job before she starves. So even though Ms Molere has far much lower amounts of money in her account, she is much wealthier than our Area 10 millionaire Obrain.

Two things to note though. First, the more liquid assets (those that can easily convert into cash), the better you are at surviving turbulent times in life. Second, wealth is a function of how much you save each month and how much willing you are at living a ‘modest’ life.

So, how much wealth do you have? And what are you doing about it? Blessed weekend to you and yours as you reflect on this important issue!

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