When we think of wealth we are often referring to the main type of wealth - material wealth. Material wealth is achieved by accumulating assets and possessions. Let’s analyze what is material wealth, its importance, and how it compares with other types of wealth.
What is the definition of material wealth?
Material wealth is described as a person's current monetary resources. That can be used to facilitate their way of life for an extended period of time, even if they do not work to generate recurrent income.
Material wealth improves life pleasure by increasing a person's economic incentive. This can lead to increased future happiness with their level of living, which has a favorable impact on total life satisfaction.
Material wealth is also related to financial wealth. It measures the number of assets, or possessions that can be converted into money in order to conduct transactions. However, financial wealth can also be measured in a different way.
How can you measure financial wealth?
Financial wealth can be determined by the number of days an individual can go without working. While maintaining the same standard of living.
Although financial and material wealth can be determined by the amount of money someone has or the value of their possession it can also represent freedom. Using your wealth in order to produce income even if you do not have a job is the goal of many individuals.
Achieving financial independence and stability gives you the flexibility to focus on what you like to do.
Is money material wealth?
Money is material wealth, and it tends to be the main measure of wealth. However, there are other forms of material wealth such as assets and other possessions. The reason money is usually used as a measure of wealth is the fact that it can be easily counted and compared. It would be difficult to compare and measure material wealth with assets such as real estate.
Is material wealth important?
Material wealth is extremely important for individuals because it can have a direct impact on happiness. There are several studies that correlate an increase in wealth with happiness. Acquiring material possessions can boost your happiness.
Does material wealth bring happiness?
Material wealth clearly has a positive impact on happiness but to a certain point. Several studies point to different thresholds where an increase in income does not directly increase the overall level of happiness.
A 2010 study conducted by Princeton University has found that a higher income improved our perception of life, but it did not directly influence our emotional happiness.
The study also concluded that $75,000 was the threshold where an increase in income would not directly improve our perception of life.
The study also concluded that lower-income individuals had a worse perception of their own life.
A recent study by the Wharton School had a different conclusion. The study argued that the overall level of well-being continues to rise with an increase in income above the $80,000 threshold.
Although the Princeton study concluded that above the $75,000 threshold individuals did not experience any increase in happiness, the Wharton contradicted those conclusions. Stating that even above that threshold happiness would continue to increase as income increased.
Material wealth vs materialism
It is important to make the distinction between material wealth and materialism. Materialism is defined by the desire to own material possessions.
Studies show that materialism can create several negative feelings, and lead to depression, and anxiety. This shows that the desire to have material wealth can have a bad influence on the psychological and physical health of individuals.
Material wealth is an important component of happiness because it allows us to increase our standards of living. Material wealth and its relation to happiness continue to be a heated topic. However, it seems clear that at least to a certain threshold, material wealth can directly impact our wellbeing.