Saturday, January 06, 2007

The definition of Wealth

Don’t confuse the wealth is the same meaning with financial independent or financial freedom. Wealth is different from becoming financially independent and achieving financial freedom. Let me explain. Wealth is to measure how far you are from financial independence or financial freedom. Wealth is in time unit. The more time you have, the better you are close to financial independence or financial freedom.

The definition of wealth is “The number of days you can survive, without physically working and still can maintain your standard of living. For example, if your monthly expenses are $1000 a month, and if you have $3000 savings, your wealth is approximately 3 months or 90 days.

I learn this definition from Cashflow Quadrant: Rich Dad's Guide to Financial Freedom.

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