What Is Wealth?
This is not a financial advice, please consult with your financial advisor before making any financial decisions. This is a living post and will be updated over-time, it's about my perception of wealth. The angle where and how I look at wealth and how to maintain it. I'm still far away from being wealthy in terms of ideal financial level, but I'm grateful that I'm making progress towards it and grateful that I have the other wealth components.
# What Is Wealth
Wealth is relative, it has different meaning from one person to another. For me, wealth is about freedom of doing things that I like without worry, without no one forcing me what to do. To achieve that I need to have a balance of: 💪 health, 💰 money(financial strength), and ⏱️ time.
# Wealth: Health
Health is the most important thing for me, without health I can't fully enjoy doing the things that I like, I cannot work to get paid in which the money can buy time and freedom, what's the point of no health?
Unfortunately even if I do everything right it's not guaranteed that I will be healthy. Regardless, it's essential to put health first before anything else. Since health is the base foundation of the wealth, this means the other wealth components are uncertain as well considering uncertainty nature of health. Maintaining health is crucial, definitely please to talk to your doctor, here's my take on it:
- What goes into the body: eat right while still having time to enjoy the food. I don't eat 100% right, maybe just 60-80% of the time, the other 20-40% is for enjoyment balanced with other health component. Dude, I definitely want to enjoy that Ube gelato 🍨!
- Exercise: weight lifting and cardio. Being strong and fit reduce the chance of injury and illness, and also help to maintain a healthy weight. I try to do this 2-4 times a week.
- Try to sleep right: still struggling to be consistent on this, generally I try to sleep at least 7 hours a day.
# Wealth: Money
In normal cases money is almost certain in a sense, for example giving value/selling to customers will generate money. Money can definitely buy time and we can be sure that there are 24 hours a day, in which we can buy some part of it, for example hiring maid to do the chores so I can free up 2-3 hour of my time.
In terms money generation, I have 3 main sources of income:
- Salary: do my best at work and get paid. If possible look for a job with decent health insurance that covers outpatient treatment for the whole family.
- Investment: basic formula 60-70% on good stocks, the rest goes into low cost bonds index or direct government bonds, rebalance as needed.
- Side businesses: profitable and cash generating businesses.
Money allocation structure is unique for a specific person but important for you to define what suits you and not to be super rigid, vertically from the bottom up, mine is:
- Insurance: mainly for protection, covering life insurance, health insurance, critical illness insurance, car insurance.
- Emergency fund: protection for 12 months of family living expenses, top up regularly as needed. This is the safety net that I can fall back to in case there's a need for an urgent cash outflow. Other scenario in case of laid off from work, I can use this fund to cover my living expenses while looking for a new job. I don't want to be in a position where I have to take any job just to pay the bills, I want to be able to choose the job that I want with market rate or above salary.
- Investment: long term investment for financial freedom.
I believe it's not 100% bullet-proof, there will be cases where things go rough and can break the structure, what I'm aiming is to have time to recover, survive, and get back on my feet when shit happens.
Becareful of money through debt, if leveraged well it can give good returns, but if not it can be a burden. Personally, I prefer not to have any debt at all, I prefer to pay in full unless I'm certain of the leverage, being debt free is important for me as it gives more freedom and more enjoyment in life.
# Wealth: Time
From my experience, time will come eventually as long as health and money are maintained well. Managing time is also crucial for health as well, not enough sleep, too much work, too much playing around can hurt health and money component. I personally believe time management is relatively simple though not easy, as simple as reducing time on social media will yield extra time.
Time circles back to wealth, having time means I'll be able to do things that I like, play with kids, take care of health (exercise), make more money (study to get better at work, better investment decision, and grow side businesses)