In a previous post, we unveiled The Wealth Continuum™ and the importance of knowing where you stand in your quest for wealth wellness.
We discussed your financial life as a timeline and the concept of “materiality”; there are ideal moments along the timeline for every stage of wealth. In this post, we will take this idea a bit further.
As you move along The Wealth Continuum™ towards wealth wellness, it’s important to know where you currently stand. With this information, you can best determine what actions you need to take to propel yourself towards wealth wellness.
Want to learn more about wealth wellness? Click here to read about The Two Surprising Traits Needed for Wealth Wellness.
Wealth Wellness – Seven factors to tell you where you stand on The Wealth Continuum™:
1. Your age – Matching times of high income with high savings is crucial.
2. Your health – Health and wealth are related. Without one, the other is of limited value.
3. Your financial situation – Take an honest stock of your existing resources and career capital.
4. Your family – Assess your family situation and what core goals and commitments are associated with keeping them prosperous and healthy (college, weddings, etc.).
5. Risk – What level of risk are you willing to take?
6. Your financial DNA – What is your financial make-up? Your financial DNA is mostly innate but can also be accrued from your experience and learnings.
7. Previous decisions – How are you currently affected by your previous decisions? Think about any constraints or issues that resulted from tax decisions, investments, or business obligations you made.
Re-imagining the Role of Wealth
Before you begin your wealth wellness journey, you need to start by re-imagining what the role of wealth is in the realm of your life’s big picture. Wealth shouldn’t be viewed as an end destination—put that idea to bed right now.
Rather, wealth is a tool for accomplishing your family life objectives.
Wealth is where life and money intersect.
Wealth modesty is a crucial element in the wealth wellness formula.
Modesty in this context means recognizing that some aspects of your financial life are controllable while others are beyond your direct control.
For example, it is impossible for any of us as individual investors to “control” or “influence” stock prices. Millions of market participants set the prices each day. None of our smartness or savvy can change this fundamental fact.
A Path Apart
Once you understand these important concepts, you can develop a mindset which, combined with wealth modesty, will set you on a path apart from the rest. The financial sector thrives on tempting individuals to think and act short term—in short, to make emotional choices.
Differentiate yourself by knowing why you are accumulating wealth, and retaining a measure of modesty about your control (or lack of control) over this wealth. This mindset will set you on a path for wealth wellness. Mindset and modesty serve as a catalyst for the action steps you need to take. Wealth is not about optimizing or maximizing investment returns. It’s about informed action and decisions that propel you toward your goals. In other words, don’t chase wealth; make the right decisions so wealth comes to you.
The Wealth Continuum ™ is depicted as a horizontal line. But we all know life in general, and financial life, in particular, is anything but. There will be moments when you’re moving steadily toward the “set” segment of The Wealth Continuum ™ when all of a sudden, something unforeseen happens and throws everything up in the air. Perhaps a job circumstance or a family obligation actually moves you backward for a while.
Ready to start making your place on The Wealth Continuum ™ work for you? Click here to start a real conversation.
This doesn’t have to mean you’re moving away from wealth wellness. Periods of setback are often highly charged emotional times and can leave you vulnerable to missteps. A wealth wellness mindset should allow you to look beyond the present moment and keep you from unraveling your financial future by making emotional choices.
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This article was originally published on November 13, 2015 and has been updated.