What is wealth?
I hear a lot of people around me saying; "Someday I will become a millionaire."
But is this it? Is the definition of wealth having a lot of money. There are plenty of examples of people who have won the lottery and are broke again in just two years time. Does wealth represent having a lot of money at a given moment, or having a lot of money continuously at a time?
We all live in a capitalist world. We have to buy everything all the time. If you want to go to school, you have to buy an education. Do you want to go from place A to B, then you buy transport or a bicycle, car etc. If you want something to eat, you have to go to the supermarket to buy something. If you want accommodation, you must rent a house (spend money) or buy a house (mortgage).
Apart from buying things, there are also taxes on your income. So you can say that you are actually buying something from the state.
In short, you spend a lot of money.
But what do you do with the money that remains in your hand after you have paid all the necessary expenses? This actually determines whether you have the capacity to become a millionaire.
The big difference between being rich and being poor is what you do with it.The majority of people live from salary to salary. They often sit the last week at home until they get paid. Often have loans, buy everything via credit card etc. They will never become a millionaire either, because they simply cannot handle finances.
How do the millionaires deal with it?
They ensure that they:
A; Do not spend everything and therefore have money left over to invest.
B; Invest in things that ultimately earn them money. Think of real estate, shares, etc.
This ultimately ensures that money will also come from that investment.
But what is Wealth?
R. Buchminster Fuller once said, "Wealth is a persons ability to survive so many number of days forward -or if you stop working today, how long could I survive?
Wealth is therefore also relative.
If you do not buy Balenciaga shoes, but those from Puma, for example, it will save you a few hundred euros. But if you buy brandless shoes, it will save you a hundred more. Your standard of living determines whether you are rich or not.
Wealth provides freedom, but it is your wealth that pays your standard of living.
Someone who makes 100.000 euro’s a year can still be broke if his or hers financial mindset is poor.
You probably now think to yourself; I wish I had 100 euro’s to invest? Then take a good look at yourself and all the things around you; Do I need all this stuff now?
It is precisely through good financial management that you can afford more. If you have a house for which you have paid off the mortgage, then you have no charges for your house and you can use it for other things.
But because we live in a consumer society, we need a new house, a new car, etc. Take another loan, you need it.
You really have to break this pattern before you become financially independent. I'm not saying you shouldn't take a bigger house, but if you have already collected enough money, you don't have to take out an expensive mortgage either.
Make sure you are smart with money. One of the things that I always handle with more expensive purchases. I always ask myself; Can I buy this ten times? If yes, then it is possible. If not, then not.
Break the circle and take matters into your own hands.
Decide for yourself when you want to stop working. In essence this is wealth.