₦airaland Forum

lawani:
How do you estimate the net worth of an individual?

If I have a business that employs one hundred people full time and gainfully and another person has a business that employs one hundred and fifty people full time and gainfully then the other person is richer than I am even if he has no car or a house. It is and has always been about the size of your household. The modern household is the number of people your asset can support

The other person is richer than I am provided that we are both debt free. If the other person's asset is exposed to debt by fifty percent then I am richer than that other person because his asset is supporting only 75 people while debt is supporting the remaining 75.

If a company is worth one trillion dollars while employing 50,000 people and I own one percent of the company then my asset is supporting five hundred people representing one percent of the company's workforce and I am just as rich as someone employing five hundred people despite that my net worth from that company is ten billion dollars. The person employing five hundred people is as important to the economy as the ten billion dollar person even if he or she has a net worth of only twenty million dollars in whatever country.

However if I go and borrow one hundred billion dollars to employ five hundred thousand people, it does not mean I immediately have the net worth corresponding to that number of employees

So when you say someone is well to do, what to ask for is his or her recurrent expenses by way of salaries, how buoyant will the person remain if he or she has to pay all his debts and etc. Sometimes a man with one house and a car can be more liquid than a billionaire and that needs also to be understood