15
August 2022
Wealth Beyond Money
Patrick Duggan
PSG Wealth
Recently, one of our partners in our practice was explaining to me how a client of his had been chastising him about recent poor portfolio performance. After listening to the client carefully, it became apparent that portfolio performance was simply an outlet for his frustration and that the client was actually facing a myriad of personal issues not just relating to matters of wealth.
“ Because building and sustaining wealth beyond three generations requires an ecosystem. ”
This got me thinking more about the true definition of wealth. A simple internet search of the word often references an abundance of valuable possessions or money.
In an excellent Twitter thread posted by Sahil Bloom last month, Sahil succinctly expands the definition of wealth beyond money and financial assets. Sahil believes that just as there is a danger in defining being rich with being wealthy, there is also a danger in operating with a notion that there is only one type of wealth. He suggests that there are in fact five types of wealth:
- Financial (money)
- Social (relationships)
- Physical (health)
- Mental (health; spirituality)
- Time (freedom)
Read the full post here.
What kind of wealth are you building?
Is it inclusive of all the dimensions listed above? Or have you confined it exclusively to money?
What are you doing to “master” your money?
Creating and building wealth – especially if your desire is for it to be sustainable and provide for multiple generations – demands a lot of and from you in every area of your life. It is important to be asking the right questions to enable you to allocate your resources effectively.
Financial wealth
- What are you doing to master your behaviour and mindset when it comes to saving, investing spending, and earning?
- What are you doing to master your knowledge?
- What are you doing to master managing your financial team?
To master your financial wealth, you also need to master and build the other dimensions of wealth, too.
Why? Because building and sustaining wealth beyond three generations requires an ecosystem. And like all ecosystems, the components fuel and feed off each other. It is our responsibility as financial advisers to see the bigger picture of what is important to you, and apply it when providing advice on how to manage your wealth.
Key-takeaway
If there is one thing that can prevent you from building sustainable wealth, it is having a narrow view that only sees it in the form of money. As there are five types of wealth, if you are not careful, the blind pursuit of financial wealth can rob you of the others. Set yourself in a position that is aimed towards planning a portfolio that takes a holistic approach in setting goals and objectives.
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