True Wealth: You Can Be Rich!

There are a lot of questions people can ask about being wealthy. What is the measure of true wealth? How much money do you need to consider yourself wealthy? Can you really be considered rich without being Bill Gates or Warren Buffett?

Would having only a million dollars make you wealthy? How about two million? Or would half a million do? Couldn't you have lots of money and still not really be “wealthy” if you lack things other than material prosperity? Is there anything wrong with wanting to be wealthy?

What is your own personal idea of wealth? It is unlikely that any one definition would ever be accepted by everyone. Complicating the subject significantly, there are many ideas of wealth aside from material prosperity and they are important considerations.

Nevertheless, any honest consideration of life values cannot fail to take into account the cost of living in terms of money. But even narrowing the topic down to financial considerations, people tend to look at wealth from so many viewpoints it is hard to settle in on one definition.

So what are the key ingredients of true wealth. While there may be as many ideas about this as there are people who have thought about it, these are my ideas about this important topic. Some of them may be different than what you have thought about until now. If so please give them some serious thought.

Is Seeking Wealth a Worthy Goal?

First, I think it is essential to look at all of our financial questions in the light of other values. Money is either directly or indirectly involved in just about every aspect of life and vice versa.

Your health, your marriage, your education, your social life, you name it. In fact, money has almost no value of its own. Its value arises from its relationship to other aspects of life.

For example, relationships with others are among those values we might consider ultimately more important than money. In my own case, my wife and I chose to adopt our son with the full knowledge that his extensive medical needs would have a dramatic effect on our finances.

Both of our careers have been totally different than they would have been otherwise if we had not needed to spend so much of our time with his cares including numerous trips (often out of our immediate area) to physicians and much more staying with him in the hospital when he was ill or needed surgery.

When we say he has a million dollar smile, what we mean is that it is worth more than any amount of money just to see him able to smile, because we can remember a time when he couldn’t. That is worth more than material prosperity to us.

At the same time, choosing to live with so little money we couldn’t provide him a comfortable home just so we could spend all our time with him was never an option either! Our lives are “truely rich” because of our son but we would not feel like it if we had not been able to provide him an adequate home.

In other words, it is impossible to think about money isolated from other values, and often equally impossible to think of other values isolated from money. To try to do so is irrational.

Step one toward becoming wealthy, then, is to get past the erroneous thinking all around us. It is not true that we must choose between money and other values. A goal of finding true wealth, even becoming really rich is not in conflict with any other purposes in life.

Recognize that acquiring some degree of wealth is a part of other positive activities or values, not in conflict with them. Then you will make choices and take paths that are much more productive in enabling you to reach your goals in life.

Becoming wealthy (materially prosperous), can be a noble and worthwhile goal for any right thinking person. This is especially true when becoming wealthy is seen from the beginning as just one part of enabling us to achieve one or more of our worthwhile goals.

How Do I Know if I Am Really Rich?

What seems like wealth to one person can easily look like near poverty to another. And vice versa.

When I was in grade school our family lived in a small apartment and we had relatively little in the way of possessions. But one day a friend of mine made the statement that my parents must be rich. Why? Because we had a washer and dryer!

Even as an adult I find that perspectives of wealth vary greatly. But there may be a common measure that we can use as a guide.

Most concepts of wealth incorporate the idea of financial freedom, having enough money so that a person can “work” or “not work” without having to worry about money.

Is this idea really at the heart of being wealthy? In my opinion, when properly understood, it is indeed a good concept to place at the core of our thinking on this subject. Consequently, I would say that each of us should have a long term goal of true “wealth”, even in this context.

Think about it. The fact is that it is only a matter of time until you and I will each face the day when our potential for most forms of employment will end. The sad truth is that most people arrive at that point unprepared to live out the rest of their days in dignity, let alone ease.

A related question is, why do we plan (if and when we do) to have enough money to live without working in the traditional sense of holding down a job only when we reach some age at which we are unable physically to continue working instead of at some earlier age. We often talk about preparing for “retirement” instead of thinking about becoming wealthy or financially independent.

Right thinking about money requires a whole new perspective than that which is common to most people around us. Why? Because this whole approach of planning for retirement based on some arbitrary age, rather than true wealth or financial freedom based on planning for a certain amount of wealth or passive income, distorts the validity of our thinking in several ways.

• It causes many people to think about how they can get by after retirement rather than how they can live meaningful lives now, and then.
• It leads many of us to neglect getting in control of expenses in the present. We think we may have to live on a limited budget sometime in the future but as long as we save some minimal amount for our future retirement we can feel safe just spending away now.
• Most important, it causes us to neglect thinking about providing for our needs in a way that can endure regardless of our health or other conditions, let alone our interests and happiness.

Robert Kiosaki of Rich Dad Poor Dad fame has focused our attention on one of the most important concepts in this area of thought. The basic idea is that a person should plan to provide all the income they need to live on from passive income sources, primarily that means financial investments.

Wages provide the least money. Your own business can provide more. Investments the most. But more important, investments provide passive income. When they reach a certain level salaried work is no longer required.

A logical conclusion, then, is that it is essential for someone who wants to become successful with money to plan a way to attain adequate passive income to support themselves as soon as they can. This requires learning how to earn money, how to spend less than we make, and how to invest productively.

How Much Money is Required for True Wealth?

Being wealthy, even in the limited sense of money, cannot be defined by any one amount of money that is the same for everyone. Each individual or family has to determine what is required on a personal basis. Let me emphasize a crucial point:

When what we call wealth is seen in isolation, as a meaningful monetary goal unto itself, it is seen to be improper. When a fixed, limited amount of money is involved, an amount that will permit us to live a clearly defined, worthy lifestyle, it is seen as valid.

There are several concepts that I think need to guide us in this area. I would encourage you to think about them in relationship to your own outlook.

Long Term Prosperity and Wealth Goal

First, keep in mind that this is a long term goal. You will give up right away if you let short time thinking take over. Develop a solid plan and put it on autopilot. In time it will pay off big.

Remember, just a couple hundred dollars invested monthly in a basic whole stock market index IRA fund could bring in roughly $100,000 per year after 40 years. It isn’t bad to start with a basic plan like that.

But instead of thinking of it as 40 years until retirement, think of it as 40 years until you can start doing whatever you want with your life without regard to any need for employment. Then start working on ways to reduce the time span needed to reach that goal.

And remember, it is not that you will not work after that point. It is that you will have sufficient wealth to enable you to have the choice.

Lower Financial Obligations to Get Rich

Next, focus strongly on reducing the amount of money you need to live in the way you choose for yourself. Use the information available through this site to get in control of your money.

Eliminate all financial debts, eventually including your home mortgage. Learn the secret to being able to pay cash for everything.

Think about it. If it takes you $2,500.00 to live each month, it will require only half as much passive income to live without a salaried job than it would if it requires $5,000.00. Pretty obvious, but this is an important point because it is much faster and often easier to reduce expenses than it is to increase income.

And, everthing else being equal, every reduction in expense frees up an equal amount of income for investment, doubly reducing the time it takes to reach the point of adequate passive income to meet your true wealth goal.

Keep Your Eye on Life not Prosperity.

Finally, get real. Actually this should come first. But it needs to come last, too. Don't let your focus on money lead you away from the real values you want the money for in the first place or you may not recognize true wealth when it comes to you.

Because of my foster care work I have an opportunity to associate with any number of people who are extremely happy volunteering to help others. Many of these are no longer working at a regular job even though they may be healthy enough to do so.

For example, one man I know spends his days visiting hospice patients. Living expenses in our area are not especially high. He no longer has to be employed to meet his expenses and he enjoys a life he has chosen for himself. Is he wealthy? You tell me.

The fact is, I think he is even if he doesn’t have a lot of money as some of us might measure it. He may not be really rich as some would define it, but he works as much or as little as he wants. He spends his days doing whatever he wishes. He is living freely a life he enjoys.

A Final Word About True Wealth

Wealth is so subjective because so much depends on the viewpoint of the observer. People from some other countries probably consider almost everyone in America to be wealthy. Their perspective may be that of a person earning a dollar a day.

Many Americans on the other hand have large incomes and own (or pretend to with the help of financial institutions) massive assets. Most people consider them to be really rich. Still they feel poor in many ways and their financial struggles cause them to consider anyone with less than several million dollars to be just getting by.

You may have heard it said that being poor is just a state of mind, not a real condition. In a very real way being rich or wealthy is a state of mind more than a state of material prosperity. It is primarily how you feel about yourself that makes the difference.

Beyond paying basic expenses one man needs enough money left over to go fishing every day to feel wealthy. Another thinks he must be able to travel the world staying in the best resorts. Another wants to visit the hospice patients in our foster care home.

Everyone has a potential to feel pretty good about the life they have made for themselves when they achieve the financial life goals they see as best for themselves. And I think they can each be entitled to think of themselves as “wealthy”, even if they do not reach what someone else sees as an ideal destination.

However, there are three objective measurements that highlight our quest for true wealth on the material level. However we look at it, there is clearly a heightened sense of financial freedom as each of these is achieved.

• When we first learn how to control of our money and then apply that skill sufficiently to begin spending less than we earn.
• When we succeed at eliminating all debt.
• When we have enough passive income to make active income earning unnecessary.

If you set these as your goals, when you achieve them you will not only will have true wealth, all else being equal you are bound to experience great joy and satisfaction. And when you have reached all three you can surely consider yourself to be wealthy, financially speaking, having achieved a level of prosperity that can clearly be considered “financial freedom.”