Wealth isn’t limited to amassing money, indeed there are two fundamental components of wealth that work in tandem – first is having the time to enjoy life and the second is having the money to facilitate the experiences you wish to have.
Many people earn lots of money but have very little time to enjoy their life; the stereotypical high earner that is always travelling for work, or stuck at the office, meaning he never gets to see his kids comes to mind. Then, on the other side of this, there are people that have a lot of free time, but earn very little money, due to being unemployed.
Therefore, it’s somewhat like a see-saw in the sense that you need a bit of both aspects; time and money, in order to be wealthy.
In this context, that is the definition of wealth we are talking about here – it’s not about having millions in your bank account, it’s about having a lifestyle where you have both the time and money to enjoy it.
The difference between how wealthy people, in this context, use their time compared to most people, is that they focus on building assets; investing their time and resources into creating something that is then leveraged multiple times over.
In comparison, most people that are employed, self-employed, or even own a small business are ultimately swapping units of time for units of money; meaning they are somewhat stuck in a never ending cycle (like a hamster on a wheel) as if they stop trading units of time they don’t receive any money.
When you think about what wealth really is, it provides both the time and money to live life on your terms… therefore, there’s an aspect of freedom associated with wealth, meaning it’s not limited to amassing financial resources… yet, if you’re stuck on the treadmill of trading time for money – this model isn’t going to grant the time freedom associated with wealth.
The investor, in comparison, has leverage – and it’s this leverage that leads to true wealth. Leverage comes in many forms, for instance you can leverage a rental property, a book, or online course to provide incomes many times over for your initial effort, or you can work with high leverage Forex brokers to use your existing money to make more money.
The thing is, it can take a lot of effort to build an asset such as a property portfolio, initially, but one you have it, then it can be leveraged multiple times over to generate a passive income that means you are no longer having to trade your time for money in a linear way.
There’s also the possibility that the asset you’ve created will appreciate in value over time, particularly when it comes to property investing. This means that not only are you getting rewarded on a monthly basis, if you are renting the property out – but also, long term, the value of the asset is (hopefully) growing.
When you compare this to trading your time for money in a normal job, you can see how much more intelligent it is to build assets and put the power of leverage to work if your goal is to create true wealth.