“Wealth is a measure of a person’s ability to survive so many days forward”
R Buckminster Fuller
When your answer to the question: “How many days can you survive without earning another cent?” is “Forever” then you are rich enough, financially independent, truly wealthy.
True wealth is built by not spending the money you earn, but investing it into assets instead. True wealth comes from realising that the best things in life really are free.
When you have healthy food, warm dry shelter, clean water, fresh air and you appreciate these things then time with family and friends and time in nature become more important than buying more trinkets.
Interestingly people get confused between high income and wealth.
Watching a show the other day titled: “How wealthy are you?” it jumped out at me that they answered this question by discussing the income levels of different jobs. Income isn’t wealth.
Wealth is more important than income
The $100k earner who spends it all and has debts for their fleet of high end cars and expensive house is less wealthy than the $50k earner who manages to save 50% of what they earn by living in a smaller house and cycling their commute.
One looks wealthy but isn’t. One is on their way to being truly wealthy but doesn’t necessarily look it. It’s what you keep that matters.
The high income high spender may not be able to keep their lifestyle going for even a month without having to head back out and earn more money. It’s a life lived on a knife edge.
It won’t be long before the truly wealthy saver who is heading for FI realises they could last 20+ years without earning another cent and that is truly life changing.
Instant benefits on the path to FI
There are instant benefits to starting on the path to FI as well and life begins to improve immediately as you switch from spender to saver.
You will appreciate each thing in your life a lot more. This will lead you to clear out the things that don’t bring joy.
No longer owned by your things
“Paradoxically, what keeps the consumer society going is the fact that trying to find yourself through things doesn’t work: The ego satisfaction is short-lived and so you keep looking for more, keep buying, keep consuming.”
Eckhart Tolle – A New Earth
It is a wonderful feeling to no longer be owned by your things. To have just what you need, the things that provide genuine happiness, and nothing more.
Having fewer things frees up time, that would otherwise be spent maintaining them, to head out and explore the world.
To appreciate the true value that lies under the blue skies, in the valleys, by the oceans, amongst the mountains, in the forests, and on the beaches of the world.
To be truly wealthy is to take pleasure in the simplest things as well as the occasional luxury. To appreciate the flow of clean cold water into your glass in the morning. To be present to the beauty of new blooms in Springtime.
To realise a cycle ride provides as much fulfilment and enjoyment as a ride in a supercar. A kayak as much pleasure as a super-yacht.
Buy assets not liabilities
The truly wealthy understand the difference between assets and liabilities. Where middle class high spenders like to appear wealthy by loading up on liabilities (things that take their money from them) the truly wealthy, the rich enough, invest their money into assets (shares, property, bonds, and businesses that provide them with passive income).
Don’t judge a book by it’s cover has never been truer. The cyclist dressed in scruffy clothes might be a multi-millionaire. The man driving the latest SUV might be heavily in debt.
I’ve felt the thrill of a new car purchase, of having nice things, but it is short lived and cannot compare with the peace that comes from stepping out of the game of conspicuous consumption and building true wealth instead.
Living in enough house
A nice home is nice to have but it isn’t a true asset (it will take money from you even when you’ve paid off the mortgage) so make sure you fully appreciate the house you have and don’t tie up all your money putting a roof over your head.
When you have enough house and you’ve made it beautiful, be happy there. Don’t be tempted to keep moving to bigger and bigger houses just because the bank will give you the mortgage to buy them.
Some end up spending their whole lives working to pay for their shelter and could end up paying almost double the purchase price thanks to the interest on a 25 or 30 year mortgage.
If you do end up buying a house rather than renting, aim to pay off the mortgage as fast as you can. It’s a fantastic feeling to remove one of your largest expenses forever.
How wealthy are you?
No matter how much you earn, your wealth will be determined by how much you save and by how much you need to fund your lifestyle.
It is possible to live a dream lifestyle on far less than most people think by just cutting out the waste and everything good gets to stay.
So for those heading towards financial independence your wealth number is far more important than your income:
How many days, weeks, months or years could you go without earning any more money from a job?
Aim to increase this number today by spending a little less and saving a little more. It won’t be long before you become truly wealthy 🙂