What Are The Cultural Perspectives On Money And Wealth?
When are you considered rich in the modern world? Maybe you have already asked yourself this question. After all, there are a variety of theories circulating online about how much income you can earn to be part of the upper class.
I try to explain in this article which definition of wealth applies, which factors determine how rich you subjectively feel – and why financial independence is so important for an individual’s life.
Most of the middle class has shrunk in recent years. The edges of the center are shrinking through both social decline and upward social mobility.
In addition to discussions about citizens’ money and tax for the rich, many people have a personal question: How am I financially positioned – compared to the rest of the population in this country? Am I rich? Most people tend to misjudge their financial situation compared to others.
We like to compare ourselves, but for many people, the following still applies: People don’t talk about money! To be able to classify one’s finances correctly, there is often a lack of comparative values.
Wealth researchers describe people with a double net median as wealthy (approx. 5,200 euros): “ For example, doctors or a teacher couple are wealthy if both are civil servants.
These people have more than you need for an average standard of living, but they are not rich.” Lauterbach also explained to Die Zeit that one can roughly say “that someone is rich if they earn three times the average income.” After that, there would be no limit at the top.
How Do Different Cultures View Wealth And Financial Success?
People tend to compare themselves with others who have similar income and assets, for example with colleagues at work or with their neighbors.
In the technical debate, this phenomenon is referred to as homophily: the decisive factor for the question of how rich one feels, and thus also for one’s life satisfaction, is the relative income and wealth in comparison to the reference groups.
The term income refers to the money that comes into the account, such as wages, salaries rental income, or royalties. Assets are the values that you already have: financial assets in the form of cash, savings accounts, stocks, bonds, etc. as well as tangible assets such as real estate, raw materials, collector’s items, company shares, or even patents.
What Role Does Culture Play In Shaping Spending Habits And Money Values?
Nowadays, when consumption is seen as a vital necessity rather than being perceived as a need or requirement, there is a need to understand consumer behavior and base it on a certain basis. Because the consumption decision is based on reasons that are too complex to be seen as a result of individuals’ physiological needs.
Consumption decisions do not only concern individuals; the personal consumption preferences of each individual in society will directly determine where, how much, when, and by whom all goods and services will be produced. In this case, consumption preference also affects economic variables.
During the consumption process, the individual makes his consumption decisions by being influenced by many factors. However, it should not be forgotten that all factors affecting consumption preferences are shaped by culture.
If we consider consumer behavior; The concept of consumption is, in a sense, an act that is learned. In other words, where even “individual preferences” are shaped is the culture we live in and the value judgments developed depending on this culture.
How Can Cultural Awareness Enhance Financial Interactions And Business?
For promotion and marketing campaigns prepared for consumption and consumers to be effective, it is necessary to know the consumer and the culture in which the consumer lives.
So much so that this necessity manifests itself not only in the international arena but also in different regions of the same country. In addition to consumption preferences being shaped by cultural values, consumers’ sensitivity to cultural values also makes marketing activities successful.
A product’s design, selected packaging, dimensions, presentation style, advertising face, and many other factors will affect consumption preference. Ethnic advertising makes a difference in the international arena, especially in multinational countries. Minor emphasis on a specific ethnic group; A religious or linguistic emphasis will affect the work carried out very differently.
Many companies operating in the international arena realize the undeniable impact of culture on consumption and give priority to this concept in market research.
What Are The Cross-Cultural Considerations In International Finance And Investments?
It is a known fact that consumer behavior varies depending on different cultures. Each culture’s value judgments and interpretations of events are different. Hagerty explained these differences in interpretation and behavior as follows: In Germany, everything is prohibited unless it is allowed.
Everything is allowed in the UK unless it is banned. And in France, everything is allowed even if it is prohibited. In addition to such differences in understanding and interpretation, there are also consumption patterns that arise and are adopted from the consumption habits of certain cultures.
Ethnic characteristics manifest themselves primarily in food consumption habits, national and religious holidays, and rituals performed on days such as marriage, birth, and death. The effects of the culture we live in and the ethnic identity we have determine the way we interpret our environment, objects, and people throughout life.
He defines this concept, which Rapaille defines as the culture code, as the meanings we unconsciously attribute to the objects we encounter in life, under the influence of the culture we live in, and argues that although the difference between cultures is a known fact, people overlook the fact that the result of these differences causes us to use the same information differently.
“Effects” are what enable us to attribute meanings to objects and concepts. The effects shape our actions throughout life and affect our life decisions.
Are There Case Studies Highlighting Cultural Influences On Financial Decisions?
First of all, you have to differentiate between income and assets. The terms are often mixed up in the public debate because income is much closer to the reality of life for the majority of the population, who have hardly any wealth of their own.
However, wealth is distributed much more unequally than income – and often wealth is not reflected in the income of the super-rich because, for example, for tax reasons, capital gains are not realized but remain in the company. Wealth should therefore best be defined in terms of assets. Pragmatically, the limit in current studies is set at €1 million.
According to the studies, the average monthly net income per household member for the top five percent is €5,460, while for the highest-income percent, it is €12,760. However, this value does not sufficiently take into account differences in purchasing power, which can be serious regionally and along the income distribution.
The current inflation disproportionately affects energy and food prices and thus poorer households. The above-average values tend to underestimate the inequality in purchasing power in the current crisis.
See you in the next post,
Anil UZUN