For each of us to define the monetary value of true wealth would invite an infinite list of numeric values, but to define it in one definition that 99.9% of us can agree on comes down to the state of mind we seek. One of the money websites/blogs that I receive daily emails from is Daily Worth, and they raised a great question that I think is beneficial for us all to take the time to ponder.
What does wealth feel like? What does it allow us to do? What does it provide? Try to do your best to not begin by relating it to material wealth, but instead on the emotions wealth would evoke within us. The reality is, the material items – the clothes, the house with the extra bath and bedroom and the vacations are by-products of a truly wealthy life because when we can enjoy these luxuries without guilt or accruing debt each of us is truly wealth.
Below are the three things the Daily Worth and I too agree are the most important goals to strive for in order to be truly wealthy. Would you agree? What would you change or add? I’d love to hear.
1. Have Financial Security
Financial security defined by one financial advisor may be different compared to that of another, but essentially, when the unexpected times occur, do you have enough to last until you can get back on your feet? Some say to have a cash reserve of 3 months. Suze Orman takes the toughest stance and strongly suggests eight months. However, we all must start somewhere and continue to add to it each month. A money market account or something unattached to your daily checking account is the best way to eliminate self-destruction (meaning unnecessary spontaneous withdrawals), but also something that can be accessed within a few days. Another positive regarding money market accounts is that they typically yield a slightly higher interest rate than a standard savings account.
Financial security also includes the future (a la retirement) and making sure we are contributing each month to the fullest of our capabilities – preferably 15% of our take home pay, but at least 10%.
2. Be A Good Money Manager
I mentioned this topic of responsibility last week, but in order to have wealth, we must be able to trust ourselves with the money we’ve worked so hard to earn. Once we become disciplined, have clear goals and know when we can have fun with our money, than we are that much closer to truly allowing ourselves to reach true wealth and our full financial potential.
3. Having Peace of Mind
By creating a sound financial cushion for today’s unexpected moments and tomorrow’s adventures which requires sound money handling, the peace of mind that we create for ourselves and our families is priceless and ultimately, isn’t that what wealth is? So choose today, if you haven’t already to Take back the control and become the captain your destiny.