The Evolving Worker

Wealth = how long you could sustain your current lifestyle (same expenses) if your income stopped, today.

I hope you’ll do the actual math yourself. Is it days ? Weeks ? Years ?

This definition is more or less extracted from Olivier Seban’s book called Tout le monde mérite d’être riche (in english, roughly: “everyone deserves to be rich”). I have no idea who first came up with this idea.

Some consequences of this definition

I did some calculation to illustrate the point – but please, try to think about the definition itself instead, see how changing either your expenses, your income, or the place you live affect your current and future wealth immediately. That’s my real point here (and my calculation may be wrong).

Under that definition of wealth, someone who earns 2000€ and saves 50€ per month is just as rich as someone who earns 4000€ and saves 100€ per month (assuming they have no previous savings). If my calculation is right (sorry if it’s not), both will have 1.5 months of wealth after 5 years.

But what if the person who earns 2000€ and saves 50€ manages to earn 2200€ instead and to save 450€ ?

That’s definitely an important change in lifestyle: expenses reduction + more income usually mean uncomfortable changes (ie: learning to cook vs. going to the restaurant, negociate your salary, etc). But overall it’s only 200€ less expenses (again if my calculation is still right!).

Compared to the previously owned 1.5 months of wealth after 5 years, this person will own 1.3 year of wealth after the same 5 years.

Please note that I don’t intend to be simplistic here. This isn’t easy, this isn’t what I mean.

Once you’re there, there is another consequence: if you have 1.3 year of wealth somewhere, and move to a cheaper place – your wealth multiplies, just by moving (you still have to get income, but your need for money changes as well).

Another consequence: as your wealth (per this definition) increases, it becomes easier to choose a job you really appreciate, to leave a job that is either not fulfilling or not matching your income expectation. It gives you that kind of freedom.

Again, I really don’t want to be simplistic here – I really hope this will be helpful or thought-provoking, as much as it has helped me (which means: a lot).

If you wish to comment, please do it on Hacker News

I wanted to write this a long time ago – thanks to this thread on Hacker News for pushing me to actually publish this.