GOODWILL IS WEALTH

This series is completely led by the Holy Spirit and so when I heard goodwill is wealth, as an accountant my initial thought was “Goodwill” the accounting term.

What is Goodwill?

According to Investopedia.com, in accounting, “Goodwill is an intangible asset that is associated with the purchase of one company by another. Specifically, goodwill is the portion of the purchase price that is higher than the sum of the net fair value of all of the assets purchased in the acquisition and the liabilities assumed in the process. The value of a company’s brand name, solid customer base, good customer relations, good employee relations, and proprietary technology represent some reasons why goodwill exists.”

In simple terms, if you pay more for a company than the actual value of the company, the difference between what you pay and what it is worth is called goodwill. It is an intangible asset i.e. an asset that is not physical. An asset is something that has value and can be exchanged for cash.

The dictionary.com definition explains it in simpler terms as, “the established reputation of a business regarded as a quantifiable asset and calculated as part of its value when it is sold.”

You can say goodwill is the reputation of a company. Reputation has value and can be exchanged for value and cash.

Now let’s look at this from a personal perspective. Like a company that has value because of its goodwill, a person with a good reputation/goodwill also has value. That value is wealth.

The Bible in Proverbs 22 verse 1 says,

“A good name is to be chosen rather than great riches,

Loving favor rather than silver and gold.”

When you have a good name/reputation you have wealth. If you had to choose between a good name or riches, the Bible says you should choose a good name.

Another way to think about this is that whenever you decide you want to do something or embark on a wealth creation activity, choose a job or make a business decision, you should think,

“Does this add to my goodwill? Does this improve my reputation? Would this give me a bad name?”

A good name adds value to you and can bring you wealth.

A good name can open doors for you that money cannot open.

Inspirational Story

Let us look at an example of a person with goodwill many of us can relate to- NELSON MANDELA.

Nelson Mandela is someone who is considered to have had personal good goodwill. Mandela’s net worth was as a result of his name and not necessarily cash. He wasn’t considered a rich person but he had so much more than money when he was alive. Even in death, his goodwill is still speaking for him.

Mandela may not have had money to buy houses in different countries but he had houses in all the countries of the world without having to own one himself. If he decided he was going to visit a country, I’m sure the President of that country will make their State House available for him to live in. All the citizens would be so eager to give up their homes for him.

The billionaires in the country will make their private jets available. People would do anything to associate with his name. Can you truly quantify in monetary terms the value of Mandela’s name and reputation? He was a man of great wealth because of his good will.

An example of company with goodwill is Toms. I absolutely love their business model. The founder had a passion to give shoes to less privileged children in Argentina and he realized that the model of receiving donations was not sustainable. Therefore he came up with the concept of creating a trendy, upmarket brand of shoes that he sold in America at a premium. For every shoe that is bought, an extra pair of new shoes is given to a child in Argentina. It was a huge success and many brands supported the company. Many people bought the shoes. A few years ago I bought a pair for every member of my family. It felt good knowing that your purchase was helping a less privileged child.

I also adopted this business model for my debut book- The Richer Woman. For every book that is sold, the idea is to give a new book to a University student for free.

Financial Advice

In this current season, a good way to increase your earning potential as a business or even as a person is to invest in increasing the goodwill of your company or your personal brand.

We are all familiar with the term Corporate Social Responsibility (CSR).

Business dictionary.com defines it as company’s sense of responsibility towards the community and environment (both ecological and social) in which it operates.

CSR was a term synonymous with big companies like oil companies, banks etc.

Now more than ever with the Covid-19 even small companies need to do a lot of good by investing in their communities.

The news is filled with companies doing amazing things in this season. Many universities are offering free online courses. E-book platforms are giving free access to their books. Many groups of people have formed food banks distributing food to the most vulnerable. Restaurants are feeding frontline workers. Five star hotels in places like New York are giving frontline workers free accommodation. Airlines are giving free air travel to front line workers. In Nigeria, many groups came together to sponsor and donate isolation centers. Many institutions and billionaires donated money. Some well meaning Nigerians came together and setup the first of its kind online platform that links people in need to people who want to help. It is called Project Ark — www.theprojectark.com.ng . In a month they have raised over N35million from 271 donors and fed many communities in Lagos. Their goal is to ensure no one goes hungry during the pandemic.

I was on a webinar recently and for the first time heard of the term Personal Social Responsibility. The onus is on all of us to take the initiative and invest in good will in our communities. We can start with the neighbors on our street.

When you invest in your goodwill you not only create wealth but you also increase your money earning potential. After the lock down, customers will be loyal to companies that contributed or impacted the community which would increase sales. The goodwill you do today may just be what your next employer needs to see on your CV to hire you.

About The Richer Life Series

The Richer Life series is a weekly series that focuses on wealth using the Wheel of Wealth methodology created by the Universal Wealth Connoisseur Omilola Oshikoya.

This series is structured as follows:

1. Case study — Focus on a principle of wealth other than money.

2. Inspiration — Inspirational story to back up the case study.

3. Financial Advice — Focus on money.

To contact Omilola Oshikoya, kindly send an email to omilola@omilola.com

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