The 4 Simple Ways to Measure Wealth

By: Scott Sturgeon, JD, MBA, CFP®

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When you think of wealth, your mind likely conjures images of lavish mansions, exotic cars, and white gloved butlers. In reality, there are several different forms of wealth that people value, and money, time, health, and relationships are some of the most important ones. These four elements are interconnected, and a balance between them is necessary for a fulfilling life. In this article, we will explore the importance of each of these forms of wealth and how they contribute to overall wellbeing.

 

1) Money 💵

Cashflow, investing, tax planning, asset protection, etc. Determining what purpose you’re giving each dollar you earn, spend, or invest. “Retirement” gets thrown around a lot as the ultimate goal here. For a lot of people though, even more important is determining whether your finances are aligned with what you’re passionate about and pursuing in your life. Education, travel, experiences, and material purchases are all made possible by how your money is managed.

There are a lot of things I work with clients on, but it always comes back to that last point. What strategies are we implementing to save on taxes? How are we investing portfolios? Can we get rid of that old term life insurance policy now that we can self insure? The answer to these questions have to be in the context of ‘what does the net effect of X solution provide in working towards Y thing that I’m passionate about’.

 

2) Time ⏰

Time is the one asset you spend every day and can never get back or generate more of. Your time is a finite resource, so spend it wisely, but don’t be afraid to also invest it. Maybe it’s building a business, volunteering, spending time with family members or taking that once in a lifetime trip to Europe. Managing time efficiently is crucial for overall wellbeing. By prioritizing tasks, setting goals, and avoiding distractions, you can maximize your productivity and achieve desired outcomes.

Remember, you have the same amount of time in the day as the wealthiest person who ever lived, every former and future US President, and every person that ever walked the earth. How you spend your time can define who you are and ultimately, is probably the biggest influence on the 3 other components of building wealth.

 

3) Health 🏥

You get one body that has to last you your entire life. Some things pertaining to your health will ultimately be out of your control and accepting that is important. At the same time, there are so many small things you can do on a daily basis that, cumulatively, have a huge impact over time on your overall physical, emotional, and mental well-being. Eating a balanced diet, exercising regularly, and getting enough sleep are among the most important daily practices you can mostly control.

Managing personal finances are similar in many ways. Small changes in how much we spend or invest and how much risk we take may end up altering the course of our lives and providing options many years down the road. Hold on one sec, lacing up my sneakers to go for a quick walk with the dog….

 

4) Relationships 👨‍👨‍👧‍👦

Friends, family, colleagues, and generally caring for others. There’s a ton of data that shows humans live longer when they foster positive relationships and surround themselves with people they care about and connect with. Strong relationships can provide a support system during tough times, celebrate achievements, and provide a sense of purpose and meaning.

The Mediterranean Diet gets a lot of hype for it’s health benefits, but one of the major components of longevity for people living near the Mediterranean Sea is they are part of close-knit communities with regular social interactions. Your ability to text or call an old friend of family member is easier now than it’s ever been in recorded history. Why not put that phone to good use and check in?

Money, time, health, and relationships are all essential forms of wealth that contribute to overall wellbeing. While each of these elements are valuable, a balance between them is crucial for a fulfilling life. If you feel like you’re lacking in any of these four basic elements, consider consulting with a fiduciary, fee-only wealth advisor that can help align your various forms of wealth with what’s important to you in life.

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