What Does Wealth Mean To You?
We probably all have a different answer to this, and that is ok. Let me tell you mine.
Like many of you, I learnt about money predominantly by myself, from marketing campaigns from the big 4 banks, and the trusty ol’ Dollarmites account offered to school kids by the Commonwealth bank.
Incidentally, I then learnt about credit card debt and loans from the same bank as they made me feel special with a VIP letter and offer.
As a teen, debt meant things like my mobile phone bill would affect the purchases I could make that week. I couldn’t go down and splurge as much at the local Tandy electronics store, CD bar or fashion store. Having other payments meant I had to spend less, and this cut my enjoyment (and fuel money) for things like driving around Newcastle foreshore with my car mates, or getting alcohol and take away more often.
You see, savings wasn’t really in my vocabulary at this stage, nor was the word investing.
To me, wealth was those families that had all the cool things and the kids who had the surf brand clothes and accessories.
Now I know better, millionaires sometimes wear the worst clothes….
Wealth should not be taken for granted, and you should constantly assess your spending and savings to make sure you are still on track. Always remember that the banks are not here to make you feel good, they are here for your money.
As technology evolves, look at the banks you use and see what you can take advantage of. Often online banks like ING (as recommended by the Barefoot Investor, a great read if you haven’t already) have lower overheads and can offer better deals like less fees.
Same goes for your superannuation. Don’t leave it till last minute!
To be wealthy, you need to be smart with your money, you need to make it work for you, rather than you working for it. What I mean is if you are trading your time for a wage, only to pay off debt or interest on loans, are you actually getting anywhere?
Wealth to us looks a little like a pyramid. Let me explain….
At the bottom of the pyramid, you have a large solid base. This is your savings, your rainy day money and assets.
On the next level up in the pyramid, we have our passive and semi-passive incomes, this is what builds up your wealth. Things like shares, and businesses (like a Shopify store selling on Amazon, just sayin…) that can deliver profits without you having to sell your precious time.
Once this second level builds up, you will definitely find yourself enjoying life a bit more.
Now the top and third level is the fun part that will raise not only your adrenaline, but possibly also your stress levels.
This is where we try to maximize growth of your wealth. Think day trading, angel investing and spends that usually come with some risk. This risk though has its rewards as long as you have rules.
First rule, do your research. Make sure it’s not a blind bet. Don’t get into anything you don’t understand or trust.
Second rule, have a limit. This top tier of your wealth pyramid needs to use money that will not affect your lifestyle or living potential. Build capital for it by scraping your other investments like share dividends, real estate interest, etc.
Now, in saying all this, the most important step we feel is making sure that firstly you have your debts under control, and secondly, you use a strict portion of your first level earnings for savings and investing in second level investments and strategies.
Passive income is very important. This is money that comes from smart investments.
Obviously, if you have been talking to us, or following what we do online, you will know we believe that online marketing, affiliate sales and ecommerce are the best way to create that passive income stream. If you’d like to know more about how you can sell a lifestyle product that initially mimics a network marketing model, to then creating lifelong commissions, talk to our team.
Ecommerce is growing at an alarming rate, if you get into it the right way without taking up all your time and capital, you can grow a very healthy and profitable business.
The other income strategy we have researched and talked about a lot lately, is pooling investment strategies like Covesta. By having multiple people buying in to a product and sharing costs, not only is it accessible, it also can be quite passive.
So back to the original question, what is wealth and what does it mean to you.
Does it mean having no debts?
Does it mean being able to buy whatever you want when you want?
Does it mean not stressing about money?
Does it mean being smart with your money?
As I have learnt, being wealthy can refer to a lot of areas of your life, but when it comes to money, it means having money that is working hard for you. Money that delivers the treats and doesn’t steal portions of your life.
Don’t get me wrong, a job that requires you to work the best part of the day is great, as long as you are smart with how you manage the money you earn from it.
Tell me below what your idea of wealth is, and where you learnt it from?