Wealth vs.
consumerism Many people cannot tell the difference between wealth and consumerism.
The difference is simple.
Wealth is something with a store of value.
A store of value means that society in general agrees that an item (i.
e.
gold) or a concept, (i.
e.
federal reserve credit) has a value.
Consumerism is the process of dissipating wealth.
Dissipating wealth is the process of liquidating wealth and distributing it to others.
In other words, wealth is spent to buy consumer goods that do not have a store of value.
How many times have you heard someone say, "I just invested in a bass boat"? (Or in a big screen TV or a DVD player, iPod, etc.
) In truth, they should have said, "I just spent a store of value (money) on a bass boat.
" The bass boat (or other consumer good) immediately begins to lose value, as soon as the money is paid for it.
The wear and tear, the age and the built in obsolescence of consumer items causes them to lose value rapidly.
This means they have no, or perhaps even a negative, store of value.
A negative store of value means that the consumer has to spend more wealth (money) to maintain the item, pay license fees, etc.
There is no inherent problem with buying consumer goods.
Producing and selling consumer goods is what makes the economy run.
We all need to have some consumers goods, even such simple items as cooking equipment or other household goods.
These things are necessary and desirable.
The problem comes in when consumers confuse consumption with wealth building.
Many people spend all their wealth on consumer items and have none left over for wealth building.
Then, when the inevitable bad thing happens, such as losing a job or having a major health problem, the consumer is immediately in financial trouble.
The trouble is caused by the fact that they converted all their wealth to consumer goods, which hold no value.
Building wealth is simply accumulating items or concepts which have a store of value.
An item is a physical thing, such as gold.
A concept is a non-physical thing , such as a promise to pay, as in debt.
Some examples are, obviously, cash or stocks, bonds, real estate, precious metals, very rare artwork and some sculptures.
These things can be converted to cash or traded for other needed items when necessary.
Building wealth simply gives a consumer some options when the inevitable bad times arrive.