Back once again to the material wealth domain.
Sarah: The concept of material wealth is very useful and important, but our family has had problems applying it – again and again. There are four of us, and we own a small grocery store. Many of our transactions are just among family members, or between a family member and the business. The business is obligated by law to maintain standard bookkeeping, but there isn’t much regulation of our personal transactions. Can we account about our wealth as a whole, or do we have to do it individually, one by one (what about individuals, projects, family business and so on)?
Thomas: Important questions, Sarah. Let’s go back to Sri’s idea about building your wealth in 3D, where one of his dimensions is “Wealth units.” His circle diagram starts with you, then goes through your family, businesses, projects, and friends and ends with the environment as a whole. If you apply our wealth concept just to yourself as an individual, you may be misled by selfish goals – good for you, but maybe not so good for the people you love. If you focus heavily on society and its needs, you may become too much of an altruist – a person who sacrifices his or her personal interests for the welfare of a group.
Sarah: So, can we balance our personal goals with the family’s interests, and those of friends, businesses, and society as a whole?
Sri Humana: We may have to do that step by step. First, we have to satisfy our own basic needs for survival. Then we have to prioritize among everything else – which can be really hard to do. Should you help a desperate friend, or go out on a date with a hot chick?
Thomas: Okay, that’s a philosophical one. But let’s go back to the practical part of the question – how to do bookkeeping for a group.
First, we have to understand that if we want to measure the wealth of a group of individuals and entities, all the group’s members must agree to consider the total wealth of the group as commonwealth. This means that the relationships within the group must be very, very strong, and all members must be willing to consider their own wealth as the group’s wealth. Such relationships can be something like family relationships, or entity-and-owners relationships; they are relationships in which group members consider their total wealth as a commonwealth.
Sarah: It looks like you are talking about our family group. But how can we be sure that our inter-family transactions are accounted for as group transactions?
Thomas: Just answer this kind of question: “Do I consider these inter-family transactions as income/expenses, or just money transfers (like, from one of my pockets to the other)? Do I consider money I give to my children as an expense, or just as a money transfer? Do I consider the money I receive from my father as income?” And so on. The thing is, all group members have to have the willingness to record and measure their wealth as a commonwealth. One member might do the accounting work, but all the others must provide him with information.
Sarah: Okay. But, if we call ourselves a GROUP, do we qualify as a rock & roll band?
Now there’s another question: how do we apply the wealth formula within the group?
Thomas: Just add another dimension – wealth units.
To be continued…
Some questions for you:
- Your father gives you money; should you consider the transaction as income for yourself, or as a cash transfer within your family?
- Do you think it is important to measure a group’s wealth?