Poll

Where do you fit in?

-2
-1
0
1
2
3
4
5
6
7
8
9
10
11 Hahaha

Voting closes: October 23, 2019, 07:08:06 PM

Author Topic: Wealth Number  (Read 603 times)

Offline legro

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Re: Wealth Number
« Reply #15 on: October 10, 2019, 09:29:21 PM »
The column that ads value to me in this thread is: "What you can afford" because that is how people spend their money.

Not to wax too philosophical here, but....

The line between " What I can afford " and  " What I really want/ need/ would like to buy " etc etc probably runs close to the disease of materialism and consumerism.

I can afford many things. To appreciate all of them would take more than one of my lifetimes.

So why do it?

And if the answer is " To impress others ", well, they'll line up next to your coffin, duly impressed.

Offline JonnyP

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Re: Wealth Number
« Reply #16 on: October 10, 2019, 09:43:36 PM »
Find it a bit bizarre that I am apparently below the poverty line on the second index, but cruising on the first?

As mentioned above, a lot has to do with want and need.  Generally I donít need a lot of the stuff on the second list (car, fancy house, dishwasher, tumble drier etc), and donít want them either.  I do know people who want them and who would rather go into serious debt to get them.  Never understood that other than from an academic viewpoint (I donít want or need to impress anyone, but can see why some do feel that way).
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Offline KenMasters

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Re: Wealth Number
« Reply #17 on: October 11, 2019, 06:08:30 AM »
Coming from an advertising background, I'm very familiar with the LSM, but not having revisited it since leaving I'm actually quite taken aback by the metrics used. Of course some elements just go hand in hand with living in S.A., such as owning a car, but I find the assumption that you would own certain items if you could afford them (such as a microwave) presumptuous. My personal philosophy is if you can't afford to replace something easily, don't buy it.
« Last Edit: October 11, 2019, 06:18:43 AM by KenMasters »

Offline Pax

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Re: Wealth Number
« Reply #18 on: October 11, 2019, 06:35:27 AM »
Is the LSM calculator not a bit bizarre? I played with different scenarios on it.  For not having an electric stove, but a gas one (not provided for) as the wife is somewhat of a "foodie" and insists like most "food experts" on gas, one gets downgraded. I mean,  according to the calculator, owning one car e.g a dilapdated 1980's Mazda or 4 new Mercedes's are all the same. I don't understand the purpose of the information or grading then.

As to wealth, I am afraid I discovered (accounting for life insurance) I am worth much more dead than alive, 'suppose I'll keep that to myself.  :giggle:

Offline santoshlv426

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Re: Wealth Number
« Reply #19 on: October 11, 2019, 09:30:03 AM »
I don't think the South African LSM measure is close to reality. For example, a stove is basic - everyone in a middle class society has it but ticking that can move you up to say a 9. Similar with a microwave - it's ridiculuos to think a R600 ($45) microwave means "you're good". It's skewed due to the vast number of people below the middle class.

This is why the Bloomberg article is more appropriate - it brings everyone - globally - to the common denominator; this is what you have and how you rank globally in USD, again which is right as the US$ is the global benchmark currency.
One need's to take it not too seriously. I actually came across it from reading Mark Barnes in Business Day 2 days ago and he actually recommended AGAINST taking the test claiming it's divisive and depressing, which I suppose it it.

I wish there was a way to upload attachments to this forum as I have the article and I cannot access Flickr to share it.

20191009_155153 by santoshlv426, on Flickr
« Last Edit: October 11, 2019, 09:34:54 AM by santoshlv426 »

Offline shadow.clone

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Re: Wealth Number
« Reply #20 on: October 11, 2019, 09:53:15 AM »
I think the Bloomberg approach works as a simplistic global benchmark. However, purchasing power differs between countries (e.g. new cars are relatively expensive in SA and HK compared to USA due to taxes) and the gradations are rather large in ZAR terms.

I would expect the majority of South African's to fall on the low end of the scale. I think this would also apply to high income earners as I've noticed that expenses/liabilities simply expand to fill workers' salaries and there is little saving as a result. 


Offline rorz0r

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Re: Wealth Number
« Reply #21 on: October 12, 2019, 08:59:12 AM »
I'd say I'm a 5, and maybe if things go really well in my 30s/40s could get to a 6 one day.

Salaried jobs will likely never get past a 6.

The two directors where I work are a "recent 7" and an "almost 8". That's a pretty significant jump between bands. It would be quite easy to fluctuate between -2 and 4, and possible to go from 4 to 5 to 6 in a lifetime, but to get to a 7 pretty much requires doing something really special or being quite successful owning your own business or something. 1.7 million is quite a few, but I suspect that is disproportionately not South Africans.

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Offline BobsYourUncle

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Re: Wealth Number
« Reply #22 on: October 13, 2019, 02:21:52 AM »
I'm going to take a wild guess and guess that most people are 4 and 5 and a few 6's. Ofcourse, that's not a difficult guess to make(unless I'm proven wrong)
I'd like to think that people who spend a little on hifi aren't drowned in debt, that would be counter productive I think. I'd like to think that assets exceed liabilities.
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