Risk Tolerance, Wealth, and Abundance

wealth

Wealth is defined in the dictionary as “a surplus, amount, or value which may be achieved through a successful production or acquisition.” By this definition, we are all capable of having a surplus of wealth. We have all heard about people who have accumulated a fortune or “made money” or “pulled themselves out of the poverty line.” The problem with these types of stories and accounts is that wealth and money are terms that are relative.

 

We often use the word wealth to describe an extremely wealthy individual or family, while wealth is often used to describe material possessions that are not necessarily of an extraordinarily wealthy nature. We are all capable of having an abundance of possessions, but what determines our worth and how much we will be able to enjoy is our ability to produce wealth. This includes the root meaning found in the original Indo-European root language weal, which literally means “to create abundance.”

 

There are many ways to build wealth, and the most common ways include building wealth using your time (such as by starting a business or joining an organization), creating wealth through intellectual property, building wealth through securities (stocks, bonds, real estate, derivatives, insurance, etc. ), and building wealth using your money (through saving, borrowing, investing, dividends, etc. ). Building wealth may also involve a combination of any or all of these methods. For example, creating a home or starting a business can require risks, and these risks can affect the value and ability to profit of your investment.

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