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4 types of wealth
Transcript:
Hello there, and welcome to our second episode of 2022. We are settling in now to the new year. I hope you are, well, either actually having still some time off by all means. I’m very happy for you. And if not, then if you’re beginning to listen and get back into work, as I have, then I hope you are beginning to get back into the momentum of the year and getting into the swing of things and really implementing the strategies and starting to work towards those goals that you’ve set yourself.
Now, we are continuing on talking about reimagining success, coming up with your definition of success. And as we talk about different kinds of success, I came across, as we do, I guess not a meme, but one of these piffy little graphics on Instagram. Yes, I’m getting inspired by Instagram now. Social media is always a good source. Well, sometimes a good source of inspiration. And it wasn’t the different kinds of success, but rather the different kinds of wealth. And I’ve seen this all over the place since then. I’ve Googled my way to, I think, the original source, which is James Clear, who’s the author of Atomic Habits, best selling book and one that many would recommend.
He posted this back in 2018, I believe, on Twitter. That, I believe, is the original source. I do want to make sure I’m crediting where credit is due. So this is not from me. And to be honest, I wouldn’t say it’s necessarily definitive either, but let’s see what you think. So when we talk about wealth, and in fact, funnily enough, one of the definitions of success might, or one of the important facets of that, might historically and conventionally be wealth, right? The American dream, being able to afford the big house, the car, the marriage, the et cetera, the holidays, and so on.
So wealth, of course, is financial wealth and money. And that means assets and income.
And I’m not an accountant or a financial advisor, and I’m certainly not going to get into that in detail now. But I would echo and reiterate, I guess, and absolutely emphasise all those verbs that, of course, financial wealth is important to a point. Now you get to decide, we all get to decide up to what point, but certainly up to a certain level. And there are studies that say, “Okay, $75,000. I believe it is up to that level. And we can become happier as we get more money. And then beyond that, actually there’s no correlation between happiness and financial wealth.” Then there are other methods and formulas of course, for thinking, “Okay, how much money do you need to earn in order to be able to retire comfortably, for example.” And of course it depends on where you live and the quality of life and your lifestyle and so on.
But all this to say that when we’re exploring different kinds of wealth and reimagining wealth, as much as we reimagine success in broader areas, I certainly don’t want to neglect the basic financial wealth. But of course, it’s more than just the cash for the sake of cash, right? It’s not the, I don’t know, stuffing notes down your mattress, or even having them in a bank account [inaudible 00:03:02] with inflation and so on. There’s definitely an element of financial literacy. Unfortunately, I don’t think, in fact, I know we don’t learn this kind of thing at school. Understanding money and understanding how to save, invest, how to have that balance [inaudible 00:03:15] and so on. So I leave it there because I’m not going to give any financial advice, but it’s definitely me something since I started my business in 2014, I guess, was when I started reading about ETFs and index funds and so on.
There are books I can recommend certainly. And again, in fact, pretty good resources on Instagram sources on Instagram and other social media. Not that you should ever take financial advice on most of them, we’ll put that as a little caveat. But certainly it’s important to learn more and it’s not as intimidating and scary as perhaps we imagine it to be. So as with everything, there’s a steep learning curve, but the more we read, the more we learn, the more empowered we’re going to be. So it’s really important not to put our heads in the sand, of course, especially when we’re working for ourselves starting and building a business. We need to be making sure that we are doing the right things with that money so that we’re growing the business, but also growing our wealth and saving for pensions and insurance and so on, whatever else.
I also saw another thing on Instagram. And apologies, Instagram is playing so heavily in this particular episode. But another one about all these famous, rich, celebrities who earned X hundred million dollars and now are worth much less than a million, just a few hundred thousand because they didn’t know what to do with the money. So it’s not just about how much you happen to have earned as a salary, but really how you then invest and what you do with it. So financial wealth, money, absolutely one of the different kinds of wealth. The second one interestingly is social wealth. And again, arguably, James talks about social wealth in terms of status. And so that’s really one of those traditional facets of success as well, right? The sort of surface prestige of the job title. Actually, the economic class as well. And perhaps now in modern times, it’s also that kind of influence of status, having however many hundred thousand followers, million followers, and having the yacht or at least posing in front of a yacht with Oprah Winfrey or Tony Robbins or whatever, all that stuff.
So there’s an element of status externally. More meaningfully, perhaps we talk about community and family and friends.
That sense, excuse me, I knocked over my water bottle almost there. That’s also an element of social wealth that’s more meaningful, I’d argue. And you may have heard that sentence, you are the average of the five people you spend your time with. And that’s an interesting one too, in terms of who are the people you’re spending your time with? And what are they focusing on? What’s important to them? But of course, especially in the tough times we’ve been going through the last couple years and there are always ups and downs in life personally and as a society, as a community, as a global community. Having those people around us, the loved ones, the support network, is so, so important for resilience, for happiness, and indeed for that social wealth.
So financial wealth, money, number one. Number two, social wealth, status, but more than status, really that community, belonging, connectedness, I guess is the word I’m after.
Now more differently, distinctively, and also more meaningfully I think are the next two. So time wealth. Time wealth, which is really freedom. This is how you spend your days, right? And unfortunately, more money, more financial wealth, can come at the expense of family, the social wealth, at the expense of the time wealth freedom, right? Because we’re earning more. We could do five jobs and that would cause a lot of stress and wouldn’t have any time for anything else in our lives. We’d had lots of money temporarily, but it wouldn’t be great for those other types of wealth. And that’s why it’s so important to broaden this definition to look at these other aspects of wealth, too.
And of course, Tim Ferris back in the day of the four hour work week kind of was one of the pioneers of this new approach to leveraging our time better. There’s now the FIRE movement, which you may have heard of. Financial independence retire early, FIRE, F-I-R-E. Financial independence retire early. And it’s all around avoiding the need for a regular job very briefly, no saving 25 times your expenses so that, effectively, you can retire early either to focus on your passions or at least not to have to have, again, that kind of job that makes you unhappy and ties you to the nine to five and so on. But rather, you can pursue your interest. You can travel. Probably, you’re still earning money and doing work, but just in a very different form.
And so time wealth might mean early retirement, it might mean more passive income streams. It might simply mean work life balance, more time for your hobbies and friends and family and fitness and so on. And then finally, speaking of fitness, there’s physical and arguably mental health as well, rather mental wealth. But that is, as I already said there, health. So of course, exercise, nutrition, working with a therapist, coach, and so on, right? I’ve talked about this many times, the different aspects of health. You might say mental, physical, also emotional, spiritual, perhaps. And that is also a type of wealth. I’m sure you’ve been there, whether it’s a cold or it’s something much more serious. In fact, even at the simplest level, and this is a bit pathetic I’ll grant you, but when I have even just a cold or a flu or, recently, COVID, you just feel completely mentally, physically drained. You realise you’ve been taking this thing for granted.
And if you don’t have that foundation, it’s so hard to do anything on top to work towards your financial wealth, to nurture your social wealth, and to have that time wealth. You just don’t have that freedom anymore because you’re so unwell. So we underestimate the importance of that physical, mental wealth that is our health and wellbeing, wellness, whatever you want to call it. And so that’s a really important dimension as well. And so again, I believe the original source was James Clear, the author of Atomic Habit. So we talk about different kinds of wealth. Financial wealth, money, social wealth, status or community, time wealth, freedom, and physical wealth, your health and so on. So what other kinds of health can you think of? I’d love to hear from you. If you want to contact me as I have a podcast at onestepoutside.com or you can tweet me, I’m not so active on Twitter in fact. But message me on Instagram or LinkedIn or Facebook or email me, whatever’s the best channel for you.
I’d really like to hear if you can think of other kinds of wealth that are really important. Have you been neglecting any of these streams? Maybe you’ve been really focusing. And I certainly do this with the pendulum swings for me, right? Maybe you’ve been focusing on the time wealth, which is something that we really love. And that’s incredible. We aspire to that. On the other hand, we’ve forgotten about kind of the basics of the financial wealth and the social wealth, or maybe we’ve been neglecting our physical wealth while we hustle, hustle, hustle, trying to work on the other aspects, right? So as with everything in life, it’s a bit of a rollercoaster. It’s a bit of kind of a spinning a plate over there, coming back to spin the plate over here, but it is important to keep an eye on those different plates so they don’t go crashing down to the floor, if I can extend that metaphor a little bit.
So understanding what have you been neglecting? What have you been focusing on? Where do you perhaps need to focus a bit more? And of course, this is very much a fit. I’ve only just discovered this, but it’s very much a fit and kind of a parallel complementary to my five Ls model, which I mentioned earlier. And in fact, if you do want to do that assessment, you can get that at onestepoutside.com/success, onestepoutside.com/success. And that’s 10 kind of questions to guide you in each of the five areas, the five Ls, as I call them, to see where you are focusing your time, where you are, and where you might want to focus a bit more going forwards. But again, I ask you, are there other areas, other dimensions, aspects of wealth that I haven’t considered that James Clear didn’t consider his four dimensions there? Anything else?
Any insights from that in terms of how we should be redefining wealth, redefining success, redefining what it means to have that status, to have the money, to have freedom even, to have that health, right? And always, it’s not just semantics. It’s really understanding the language that we’re using, the goals that we’re setting to make sure that we’re working towards meaningful targets. And of course, this is a sort of big, philosophical, theoretical discussion, but it’s not theoretical. It’s really rooted in actions, right? So if we take the financial wealth, it’s important, as I said at the beginning, to really try to empower ourselves with financial literacy, understanding investing, and so on with the time wealth. If we’re finding that we’re earning a load of money, but we’re over delivering for all our clients and we have no time, we need to obviously be raising our prices or working with a different kind of client.
Maybe we need to be productizing our services so we have more passive income. Diversifying our income streams, bringing on a team so we can focus on the really important strategic business development aspects and then elevate ourselves away from kind of the lower levels, admin and executing and so on. Physical wealth, of course, emotional, mental, whatever you want to call that, the health aspect as well. There are some really concrete, tangible actions you want to be taking if that’s something you’re not prioritising. So this is not just a theoretical, philosophical discussion here. These really are kind of rooted in real-life strategies and actions to take as we go forward. So I hope you found that interesting. If you haven’t come across that graphic, there you go. I’ve shared it with you now. Looking forward to your insights, and I encourage you to reflect on what wealth means to you if there are other aspects that we haven’t touched on today, and what that means in terms of your business, your career, and your life going forwards. Thanks so much for listening, and I’ll see you next week. Bye for now.
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