How much money would it take for you to feel rich?
Being wealthy means different things for different people.
Some people may feel that being wealthy means:
Spending time with family
Having time to myself
Owning a home
Eating out or having meals delivered
Owning the latest tech gadgets
Having a gym membership or a personal trainer
Using a home cleaning service
For some people, being able to do any of these things is a luxury.
Does money make you rich?
There is a big difference between the rich and the wealthy.
The rich have lots of money, but that doesn’t stop them from worrying about money.
The rich might have lots of money, but they also might have lots of expenses. Or, they might have a high paying job but have to get up to work every day. Some rich people even have a fear of getting fired or laid off.
The wealthy have lots of time, and they don’t worry about money.
It’s because of this, I believe that most people do not understand what it means to be truly wealthy.
In fact, I believe most people are confusing wealthy with being rich.
The definition of wealth
The definition of wealth is the amount of time you can survive without physically working and still maintain your standard of living.
It’s that simple.
Wealth is not about what you can buy.
It’s about your ability to sustain your existence without working.
For example, if your monthly expenses are $3,000 and you have $12,000 in savings, your wealth is approximately four months or 120 days. But if you’re expenses are $3,000 and you have investments that provide $3,000 a month, you are infinitely wealthy.
Wealth is measured in time, not dollars!
The difference between being rich and being wealthy
Many people believe that having a good paying job or starting a business leads to financial success.
Though these may indeed make you rich one day, you still may not be wealthy.
If most of your time is spent working a job or building the business, you are working for your money – your money is not working for you.
Financial success comes when you can cover all our expenses from cash flow each month—without having to go to work each day.
Ultimately, it’s not how much money you make that matters but how much money you keep—and how long that money works for you.
There are lots of people that make a lot of money. However, they also spend a lot of money. At the end of the month, they are flat broke.
Every time a little extra money comes along, they find a way to spend it. Quite often, the money goes towards shopping or vacations. In other cases, the money is used to buy a bigger house or a new car, which results in long-term debt and more hard work.
Instead of the extra money becoming an asset, it becomes a liability.
Wealth is about financial intelligence…
Financial intelligence is what separates the rich from the wealthy.
For some people, the pathway to wealthy means saving and investing in a 401(k) or an IRA. Indeed, this is definitely a step in the right direction, but it is only one part of the equation to becoming wealthy.
Having financial intelligence means learning how to make money work for you – instead of you working for money.
When you have mastered the wealth equation, the amount of money you earn from it working for you will be more than what you need to live on.
When money is working for you, you aren’t worried about how you spend your time.
You can sleep all day if you like. Play golf every day. You can take a year-long vacation traveling to different parts of the world.
Investing is just one of the 3 Pillars for creating wealth.
Achieving financial success means learning to master all three.