How do you define wealth? Is it a large amount of money in your account? The ability to eat our whenever you like? Buying that legendary car that you have always dreamed of? Freedom from debt?
Everyone wants to be wealthy, but not everyone knows what that truly means. Too often, people associate wealth with limitless money to buy whatever whim they may have. Pursuing wealth in and of itself is not bad, but if left unchecked, the term can lose its meaning and can easily lose way to greed. To avoid this pitfall, you should have a clear definition of what wealth really is. At it’s most basic level, wealth is the financial ability to accomplish your long term goals.
Take a moment to think about what some of your long term financial goals are? If you do not have any (and many of us do not), take this article as an opportunity to develop your own long term goals. As stated in our name, our goal is to help people develop their own personal wealth and knowledge. I want to share with you what my long term goals are, and I will update you as I progress towards them. My hope is that together we can make a plan to pursue and encourage each other towards our long term goals !
Goal #1: Kill my student loans.
I hate being in debt. It is a normal part of life, and often is unavoidable, but I hate it nonetheless. My student loan debt leaves me feeling frustrated and behind the curve in the race of life. My personal goal is to utterly annihilate my student loans in an unbelievable amount of time: I want my student debt gone in 3 years or less. Most people (including my student advisor) would say this is a highly unlikely goal, but I say with some long term planning and determination, it is absolutely possible. This is such a priority to me, that I am willing to work overtime and pick up odd jobs just to throw every dollar I can at this seemingly endless beast. Business minded people may crunch the numbers and say I will pay the least painful amount if I drag out the payments as long as possible, and let inflation devalue the money I am paying back, etc. But I dont buy into that train of thought. First and foremost, the idea of saving money by dragging my loans out for 10-20 years makes my skin crawl. I do not want that kind of stress in my life a day longer then I need to! Secondly, when I borrowed the money from the government (at an interest rate that can only be described as taking advantage of me), I signed a letter promising in good faith that I would pay the loan back. Some may argue that I should not look at my loans like a promise, and instead just focus on what makes the most sense numbers wise. However, I know that I will be the most happy if i focus on the principle that I gave my word and intend to stand by it. It may not be the most financially savvy decision, but I know that it will make me happy to keep my word and to know I tackled it the best I could.
Goal #2: Purchase a rental property
You probably noticed a theme with several articles on our website around passive income. Passive income is the name of the game! My goal is to acquire a rental property as quickly as possible so that I can grow my passive income. Now make no mistake, saving for a rental property is a daunting task that will likely take me years. But it will only make it all the more sweeter when I finally achieve that goal and start reaping the benefits years later. I intentionally save money each month with the goal of buying a rental property that I can call my own. My hope is that by having a well managed rental house, I can afford to take small amounts of time off from work to travel or spend with my family without having to worry as much about our income.
Goal #3: Retirement property.
I have a dream of owning a large plot of land in the country side. I hope to be able to purchase enough land that my parents and my wife’s parents can build retirement houses together on this property. I want this property to be associated with happy family memories; a place where everyone can gather and call home, regardless of where or what path life takes. Saving up to by retirement properties in the countryside is a gargantuan task. By breaking it down into land acquisition first, I give myself and my family the flexibility to build where, when, and how they like once we have a plot of land to ourselves. Currently this kind of financial goal is WELL BEYOND what I could hope to achieve with my current income. My hope is that by setting long term goals (knowing what I want), it will be easier to work towards those goals.
How do I get there?
My current approach is to use “goal orientated” money. What that means is I have specific
income that I place into “goal accounts”. This money never goes into my normal bank account, and is only to be used for the goals listed above. Earlier this year I wrote an article about how to make more money in your day to day life. Any money that I bring in from one of my side hustles gets deposited directly into a goal account. Lastly, I make sure to focus on one goal at a time! I certainly cannot afford to pay off my loans, purchase a rental property, and save for a retirement setup all at the same time! By prioritizing my goals, I plan to eliminate my student loans. Once I have that debt out of the way, I can continue to use the monthly income that was directed towards loans as well as the budgeting techniques I learned from managing my debt to purchase a rental property MUCH faster then the average house. By acquiring rental properties, I can snowball in my passive income towards a retirement property!
In conclusion, everyone has a different dream for what their life would look like if they were wealthy. What most people do not realize, is that if you take the time to recognize what your personal goals are, and make a plan on how to get there, you may find that you can be a lot more wealthy then you had ever realized.