What Wealth Means To Me

As part of my financial re-set, I’m going back to my why. I realised I didn’t really have a clear idea of what it was I was working towards, especially since becoming consumer debt free and finally buying our first house (story of that journey here). So what does wealth mean to me?

Wealthy vs rich

So what is the difference between being rich and being wealthy?

Being rich is often associated with extravagant lifestyle with a lot of money to spend, someone might even look rich without actually being rich due to financing their lifestyle with debt.

Wealth on the other hand is considered as owning assets that make you money. It is also often “quieter” than just being rich, meaning that you can’t necessarily tell on the outside whether someone is wealthy or not.

To me wealth isn’t the end goal itself, but the wealth enables you to do what you want in life.

That’s why it is important to figure out what that something is, so you know what you are really aiming for.

When I started my journey to get better with money, the first priority was the usual emergency fund and getting rid of consumer debt.

While my emergency fund is once again not looking that great, I’m consumer debt free.

When I think about how much money I need for the life that I want to live, I don’t have a clear number in mind, just that I need more, and I don’t know what would be enough.

I feel like I’m still coming from a place of scarcity, even though I thought I had already gotten past that. At the same time, more money would get us to our goals faster so I suppose that also accounts to it.

What is my dream life like

In my dream life we live in the house that we have rebuilt on our property. It has space for my own office/library, the walls of it are covered with bookshelves.

We are able to easily pay for yearly overseas trips, at least every other year that trip would be a longer one to Europe.

Our kids are able to have hobbies/activities without the cost of them ever being a concern.

I’d work part-time hours with flexible location, helping people with their finances.

On my free time I’d spend time with kids, read a lot, play video games and garden.

I have an electric car.

We have one or two investment properties.

I’m still running Love of Finance in some shape or form.

And I have multiple income streams from investments (dividends and rental income), Love of Finance (affiliate links, ads) and selling digital products plus print to order.

We are mortgage free.

I get to slow down and feel like I have time for myself without the feeling of guilt that I should be doing something else instead.

Oh, and we have a hot tub and a sauna!

How can wealth creation get me there

While I don’t aspire for full early retirement, I do want to work less (than the normal 40h work week) and be able to travel more with income still coming in.

Wealth creation can help me with this by giving me passive (or at least semi-passive) income to counter less income coming in from a traditional job.

In order to have a clear goal amount in mind, I need to estimate how much I’m going to be earning from the part-time job I want to have, how much the lifestyle I want to have will cost (including traveling) and then see what the shortfall is on a yearly basis.

That will give me the figure that I need to earn passively to be able to live the life that I want.

However, I feel like working that out now would be a little bit pointless (for me), as we have a huge goal of building our own home and we want to cashflow (meaning, we want to pay for it in cash, not increase our mortgage) it.

What I can do now though, is to make calculation on how to increase my own earnings so that we can reach this goal faster.

This means creating more income streams, passive, or at least semi-passive ideally.

I don’t want to include dividend income from shares in this though, because I want to re-invest everything I can to make sure that the compounding effect can start rolling from the get go, then once our home is built some of the hard work of building my investment portfolio is already done.

What I will be focusing on this year is monetising this blog and my Instagram account @love.of.finance with some affiliate links, e-products and ads (only the blog though for ads).

I’m also working on learning how to self-publish books on Kindle Amazon to create some income from there as well.

Wealth takes time, and sometimes money at first too

Our first project on this journey is to get our sleep out up as another income source, since we will be initially renting it out. This will help cover most of our mortgage and help us cope with the inevitable mortgage payment increase (and keep saving) as we approach the end of our fixed period.

We had hoped we could start the sleep out this summer, but it is not looking great at the moment due to some financial “set backs” we have experienced lately.

I’m saying “set backs” with quotation marks, because truly, the only set back that we have faced is the fact that I wasn’t able to work for about month due to sicknesses and the holidays, and my partner having taken on two bigger jobs that were both weather dependent.

So my income went down to just Working for Families Tax Credits for few weeks and the completion of his jobs have been repeatedly delayed because of weather, and since he agreed to one invoice at the end for both jobs, he hasn’t been paid in a while.

He’s owed nearly 160 hours in labor I think and some extra money in materials, which he has been frustrated about and I’ve had to remind him that it is sometimes just the way it is when working for himself. It’s definitely a lesson learnt on how to organise billing for the future.

Due to all this, we’ve had to dip into our savings a lot to pay for day to day things, and haven’t been able to save money obviously.

But I’m back to work, he should be paid for both jobs this week, some lessons learnt and we’ll be able to catch up and get back on track.

Our initial savings goal was $10,000 at which mark we would start building, with my partner estimating that the whole thing will cost about $20,000. We just need to check how much the plumbing for it will be, as it could increase the cost quite a bit.

So, I will aim to create some passive income streams to help fund the sleep out, which will be another semi-passive income stream on its own, and so forth.

Have I gone a bit out of tangent? Maybe. My apologies about that!

What is your dream life like? Do you have an actionable plan to get there? I’d love to hear in the comments!