Definition Of True Wealth, And How To Measure It
How long can you last with no income and not changing your lifestyle?
(Listen to audio version of me reading👆)
Your wealth is your time. Time is most valuable asset that we have and something that we can never buy more of.
In fact it’s the only asset we cannot buy more of.
Talking to many in the older generations and reading books written by them, they always speak about the memories they have and wishing they had more time.
They don’t talk about valuables or money or any material aspects of life.
All they talk about is time. Time to have more adventure or maybe more time with your family and loved ones.
When it comes to the younger generations how do we get more of that time back?
We all have the same 24 hours in a day but why do some people grow wealthier and get back more of their time while others toil away trading their hours for dollars?
Cruelly, trading time for dollars is the highest taxed way you can earn money.
It’s almost like the government is saying they don’t want you to trade your time for money.
Tom Wheelwright who is Robert Kiyosaki’s CPA always refers to the tax code as a book of incentives.
Very little of the tax code is actually taxes against you, while most of it is government telling you what they want you to do
.
Investing in assets and receiving passive income or capital gains are the least taxed and in many cases if done correctly you pay zero tax through depreciation in real estate or if you lend against your assets pulling out debt.
I do my best to measure my wealth in time.
How long could I last at my current lifestyle if no new income was coming in?
$100,000 in savings/liquid assets
Divided by
$5,000 in monthly expenses
Equals
20 months of wealth
When we use this calculation we can truly and accurately measure our wealth.
It’s rather hard to quantify otherwise.
This levels the playing field so we can compare financial conditions.
Take the young Wall Street hotshot who earns $1 million a year but spends $1.2 million a year and only has $200,000 in savings.
Versus the lady who earns $50,000 a year but only spends $3,000 a month and has $200,000 in savings.
When doing the calculation we find out that the lady actually can maintain her lifestyle for much longer than the young hotshot.
As Robert Kiyosaki says, “most people are looking fast but going nowhere.”
Wealth is not what you make but instead what you keep.
What is your wealth ratio?
Stay strong,
Brandon