Defining true wealth
What is the meaning of true wealth? Is it buying expensive toys? Having the latest iPhone? The newest fashions? I’ve been giving this topic a lot of thought these days. I submit that true wealth is freedom. Its being able to do what you want to do. It doesn’t mean you have a million dollar home on the beach or a private jet. It means being financially able to do those things that really matter to you.
What matters to me if my family. I want to be able to spend time with them, and build meaningful experiences. It all boils down to time. What we want to achieve is to have the time to do what we want, rather than have to work at the daily nine-to-five grind. So how do we quantify this?
Well, a handy way of doing this is defining wealth as the amount of time that you and your family can live without working.
Think about it. If my expenses are about $500 per week, and I have $6000 in the bank, I have around 12 weeks or 3 months of wealth. Now thats not a very long time, so I really wouldn’t be very wealthy.
How about if I had $1,000,000? If I still spent only $500, I could live for 2,000 weeks, or 38 years without working. Wouldn’t that be great?
But say I had the same $1,000,000 in the bank, but had more expensive tastes. Maybe I eat caviar and truffles everyday and frequently set off on exotic beach holidays. Imagine my new lifestyle costs me around $5,000 per week. That’s now only 200 weeks of living without extra income. We’re talking between 3 and 4 years of wealth. If I kept at it and never got any more money, I’d go from being a millionaire to being broke pretty quickly.
Imagine we were back at square one and I had $6000 in the bank, and spent only $500 every week. But what if I had passive income? You know, the kinds of assets that make you money even if you’re sleeping. Let’s say they’re consistently bringing in $500 per week, Week in, week out, that money came pouring in, and I didn’t have to do anything to make it come. Now that is what I call unlimited wealth.
Basically what I’m trying to say is there is a difference between being wealthy and appearing wealthy. Its easy to appear wealthy, particularly if you have a huge income. We can get so caught up in consumerism. We want to seem wealthy by buying the latest gadgets.
Being wealthy isn’t even having a huge income, especially if you’re spending all of your time bringing home the bacon instead of being home to enjoy it.
Again I submit that being wealthy is having the freedom to do those things that really matter. Its being able to be generous with your time and your money. It doesn’t mean having every luxury money could buy. Its bringing in passive income, and living below your means.
I invite you to have a think about what really matters to you. If you had all the money in the world, would you be doing what you’re doing now? If the answer is no, then now is the time to change.
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