Money is something hardly anyone wants to talk about and yet people are highly interested how wealthy they are in comparison to others. Generally speaking, what does it even mean to be wealthy? My personal take is that wealth is more than money. Wealth is life. Wealth is what you experience and who you meet every day, your ideas and thoughts and those of others.

Wealth is also the comfort of your family, the partner you share the most intimate and beautiful moments with, your closest friends with whom you experience moments that you will still remember 20, 30, or 40 years from now. All these are usually free. However, money undeniably is a big part of life. It will pay for your hospital bills, allow you to go on holiday, buy you that long desired gadget, and generally give you peace of mind.

So how rich are you?

A UBS survey reported that amongst the investors they asked, the majority said that being rich means to have more than $ 5 million. In a different report from France, people said, someone earning € 6,500 per month after tax is rich*.

So rich is very subjective. But still, were do we stand in comparison to others?

From an international perspective the median net wealth is as follows:

ll Data from UBS and the European Central Bank

The European Central Bank pointed out that those countries with the highest wealth are frequently nations where homeownership is high on people’s agenda. For instance, Spain with a net median wealth of € 182,700 is also country with a massive 83% of homeownership. This is similar for Italy (€ 173,500) and France (€ 115,800) with 65% and 55% of homeownership, respectively.

What makes some richer than others?

In contrast, countries with lower median wealth often have lower levels of homeownership. Germany is a very good example, where only 53.3% own a property. However, in the USA, 65.2% own their property. But homeownership is unlikely to be the single reason for differences in wealth accumulation. Other reasons are certainly taxation and wages; not only income tax but also taxes on investments such as capital gains tax. Another reason that is often quoted in the media is that Germans, different from other nations, refrain from stock market investments for their risk aversive nature. Germans, despite being one of the richest nations on earth, prefer savings accounts that currently pay a meager interest rate between 0 and 1%.

The reasons for building wealth are manifold, but it is certain that regardless of any factors such as taxation or wages, the main driving force for building wealth is understanding how to invest and building a solid grounding of cash to invest. Homeownership certainly forms part of the wealth creation process, but similarly assets that produce a constant stream of solid returns are important tools to secure a reliable cash flow. As the saying goes: “You need money to make money.” Across Captain-Finance.com, you’ll find numerous articles on different strategies and methods to save and invest to provide you with those money producers.

Determine your own wealth

If you want to determine your own net wealth, the calculation is simply subtracting all your liabilities from all your assets. For instance:

Assets (e.g., House value + Share value + Bonds + Savings) – Debt (e.g., outstanding mortgage)

If you are interested in how the average wealth per adult across the world has changed, check out the updated version of this article listing the average wealth per adult in 2016 for the USA, UK, and many other countries.

*

1) http://www.ubs.com/content/dam/WealthManagementAmericas/documents/investor-watch-3Q2013-report.pdf

2) http://www.20minutes.fr/economie/1095319-20130206-etre-riche-gagner-6500-euros-nets-mois

3) https://publications.credit-suisse.com/tasks/render/file/index.cfm?fileid=17711FFC-0524-76AB-CEB0FE206E46C125