I know the stock market has been “up and down” the last few weeks, so I wanted you to think about something we have more control over, how we think about wealth. I think it is fair to say that most people think of wealth strictly in terms of money, the more the merrier. However, this one-dimensional view of wealth can make us worry about the stock market because it means our “wealth” is tied to the stock market performance...which is largely out of our control.
Obviously, the stock market is a key component of building wealth, but a recent book I read challenged me to think of wealth as a three-dimensional idea, time, energy, and money. The basic gist is this…when you are young, you have time and energy, but no money…when you are in your middle years, you have energy and money, but no time and when you're older you have money and time, but no energy. The proposal put forth in the book is that having all three components (time, energy and money) at once is the true definition of wealth.
Society usually talks about how much money you need to retire and asks the question “Do you have enough?” I think the more important question is “Are you managing your money in a way that allows you to live the best life possible?” By framing the question this way, it brings two components we have control over, time and energy, into the wealth definition.
It’s this alternative view of wealth that got me interested in other contrasting ideas such as Retirement vs. Financial Independence and Return on Life vs. Return on Investment. However, those ideas are for another day, so use some of your energy (and time) to get outside and enjoy this beautiful sunny day!