Where on the continuum from super-poor to super-rich do you think you best fit in? If I were to ask you if you’re poor, your most likely answer would be ‘no’.
That’s understandable; some time back in 2009 the proportion of Malaysians who were so impoverished that they could not meet basic food needs was an already super-low 0.7 per cent, according to a United Nations official, Olivier De Schutter.
De Schutter visited Malaysia in 2013 in his capacity as UN Special Rapporteur on the Right to Food. (‘Rapporteur’ is derived from French and refers to an individual who reports to a deliberative body, in this case the United Nations Human Rights Council.) De Schutter commended Malaysia on succeeding impressively on numerous metrics of poverty eradication, including slashing the ratio of those who can’t meet basic food needs to 0.2 per cent (in 2012). In the five years since then our poverty indicators continue to improve (fall). Good for us.
And based on a broader metric tracked by the World Bank (www.worldbank.org/en/country/malaysia/overview), under per cent of Malaysian households live in extreme poverty, officially defined as individuals subsisting on less than US$1.90 (roughly RM8 a day, at our current exchange rate).
Given Malaysia’s very low poverty rates and since you’re reading this in English — proficiency of which is one determinant of global success — I’m certain you don’t fall into that category of abject poverty.
Are you middle class?
Furthermore, not only are you unlikely to categorise yourself as poor, odds are you consider yourself middle class, whatever that means. The problem with that term is ‘middle class’ has grown so all-encompassing that it has lost its sit-up-and-pay-attention potency as a useful handle in determining a person’s true economic position within society. Definitions of middle class vary... widely!
A few years ago, my friend Yap Ming Hui wrote a thought-provoking article on the middle class in Malaysia. His working assumption was that any household with an income between RM10,000 and RM50,000 a month could be considered middle class. If you disagree, please understand that Yap is a successful author and a famous independent financial advisor who works with many high net worth clients.
So if Yap’s range stretches too far based on your personal assumptions and observations on what constitutes middle class in Malaysia, feel free to use as a guide about RM6,000 in monthly household income for Malaysians (determined in 2014 purchasing power by the World Bank) or bumping that up to RM7,000 to account for a reasonable series of annual remuneration jumps to late this year.
Regardless of the disparity between various working and official definitions of middle class in Malaysia, far too many people in that category feel squeezed by growing lifestyle expectations and escalating expenses. That disturbing sense of financial constraint is exacerbated by rising levels of personal inflation among town and city dwellers in both East and West Malaysia that regularly exceed official CPI (Consumer Price Index) pronouncements.
Those reasons are why it’s likely that even if you make more money than your parents did at your current age, and even if you see yourself owning much more stuff now and over the next decade than they ever did, you still find it tough acknowledging you are indeed rich. Reticence in admitting we’re already rich is normal.
Several years ago, around the time De Schutter visited Malaysia on behalf of the UN, there was a 2013 report released by Swiss banking giant UBS, which found that in response to the straightforward question: “Are you rich?”, only 28 per cent of people with financial assets ranging between US$1 million and US$5 million acknowledged they were wealthy! (For this column I’m using wealthy and rich interchangeably.)
So in that UBS study, 72 per cent of seriously affluent individuals did not consider themselves rich. The report contained an even more bizarre revelation.
UBS asked that same question: “Are you rich?” to people with more than US$5 million in assets (or in excess of RM21 million, at current early November exchange rates), and only three out of five of those obvious multi-millionaires considered themselves wealthy.
Think what that means
Two out of five or 40 per cent of the world’s most economically-successful people do not perceive themselves as rich or, at the very least, are uncomfortable acknowledging to others they are rich.
Something odd is going on. In next week’s column, I plan to explore practical, tangible ways for those of us who are successful — by objective metrics — to act and acknowledge that we are rich.
For now, I’ll leave you with three suggestions on how you may begin the mental reprogramming process to feel justifiably rich:
1. Be grateful — focus on what you have and not on what you don’t;
2. Be generous — give what you can to people more in need than yourself and to noble causes you believe in; and
3. Be glad — choose to be happy and to acknowledge, first to yourself and then to others, that you are rich both financially and in ways that matter more than money.
Bottomline: To the vast majority of the world, you already are financially rich.
So, as you aspire to grow even richer tomorrow, count your blessings today. It will take you a surprisingly long time to get halfway through your list.
© 2017 Rajen Devadason