There are four types of wealth that you should be aware of. I’ll be breaking down why each one is important, how to achieve them, and provide some examples.
These Are The 4 Types Of Wealth:
- Financial Wealth (Money)
- Social Wealth (Support)
- Time Wealth (Freedom)
- Health Wealth (Physical & Mental)
Understanding the different types of wealth is essential. If you weren’t aware you might commit your entire life trying to achieve financial or social wealth, only to find out later that there are other types of wealth you sacrificed in the process.
Most jobs look to lure you in with the promise of more financial wealth. This is the typical wealth people strive for in our society. For that reason, we will start with financial wealth.
Financial Wealth (Money)
Financial wealth is the measure of how much money or assets someone has accumulated. This type of wealth is the most obvious and is what most people in our society are working towards.
The pressure to build financial wealth is everywhere and can have a detrimental effect on your ability to achieve other types of wealth. Therefore, I wouldn’t focus only on achieving financial wealth.
Building financial wealth also takes time, so please don’t fall victim to “get rich quick” schemes.
The first step to building financial wealth is financial literacy. It’s crucial to learn how to manage your money. If you don’t do it someone else will and not in a good way. The best way to get started is to find books about personal finance at your local library or by using Blinkist.
Blinkist is the best digital resource I’ve found to learn quickly. It gives you the most important information from books while skipping all the unnecessary information.
You’ll learn the 3 to 5 most important concepts of the book and can quickly move on to another concept you would like to learn. The best part is you can try it for free!
If you are serious about becoming wealthy, you have to take the time to learn how to manage money properly. I list the books I recommend on my resources page. There you will find a ton of information to help you get started.
So commit yourself to learn by reading, listening, and taking action.
Examples of Financial Wealth:
- Money In The Bank
- Accumulated Assets
- Net Worth
- F-You Money
Financial wealth can also be used to reach time wealth, which is what the financial independence/retire early (FIRE) movement is all about. Most people pursue financial wealth for the ability to say they are “rich” and buy more expensive toys. What they don’t realize is money doesn’t buy happiness and the pursuit of more money can lead you into the rat race.
You should strive to find a balance between achieving financial wealth, while also focusing on the other types of wealth that exist. Financial wealth is very important but it’s not the end all be all.
Money is numbers and numbers never end. If it takes money to be happy, your search for happiness will never end.
With that being said, what financial wealth can do is make your life easier and make it easier for you to achieve time wealth (freedom).
Social Wealth (Support)
The second type of wealth is your social wealth or your social connection in society. This is determined by your connections with other people such as family, friends, and community.
The people you surround yourself with will affect your social wealth.
If you want to increase your social wealth you should try to surround yourself with good people who have honest intentions. You can do this by increasing your social connections, spending more time with positive influences, and getting rid of negative social connections.
Take time to nurture the positive connections you have with people. You can also rekindle lost connections with family by reaching out to relatives. A simple phone call can go a long way. Finally, if you notice negative social connections, try to eliminate or reduce them.
This will give you have a strong social circle that will support you in the good times and the bad.
Examples Of Social Wealth:
- Strong Family Ties
- Lasting Friendships
- Social Connectedness
- A Sense Of Belonging
- Positive Interactions
- Being Part Of A Community
- Self Confidence
Humans are social and emotional beings, which is why building social wealth is so important. Someone who is socially wealthy can lean on others and satisfy their emotional needs.
Increase Your Social Wealth By Joining The Inspire To FIRE Community
Time Wealth (Freedom)
Time wealth is the freedom to choose how and where you spend your days. This is the type of wealth many people, except the FIRE community, overlook. Most people are too busy trying to achieve financial wealth that they ignore time wealth.
There is no sense working two to three jobs trying to make more money if you are robbing yourself from the other types of wealth.
Working more to make more money, takes away from social wealth by not allowing you to spend time with family and friends. You can’t nurture those relationships and the bonds weaken. Your time wealth suffers because you are busier than ever.
There is also no time to learn how to manage money or to ever pursue your passion in life. Later on, I’ll show you how it robs you from mental wealth.
The FIRE community understands time is a finite resource. Which is why the FIRE Movement aims to become financially independent.
This results in time wealth because you no longer have to trade your life hours for money. So one of the best ways to achieve time wealth is to join the FIRE Movement.
The best way to achieve time wealth is you separate your income from your time. Stop trading your life hours for money. Learn to build a passive income stream and start making money while you sleep. Earning passive income takes work and time upfront but the benefits can be long-lasting.
I’ve shared my best strategies for building a passive income in my FIT Strategy.
Examples Of Time Wealth:
- Financial Independence
- Early Retirement
- Earning Passive Income
- Having Time For Family/Friends
- Freedom To Pursue Your Passions
- Slow Travel
I’ve also focused on increasing my time wealth by cutting down on my phone notifications. I would spend hours a day attending to notifications that weren’t important. Now I rarely hear my phone ding and if it does I know it’s important. With the extra time, I reinforce my relationships that are needed to build social wealth.
You can also use the time to focus on yourself, which is what I’ll explain with health wealth.
Health Wealth (Physical & Mental)
Health wealth is when you are actively looking after and improving your physical and mental health. You can do this by exercising, healthy dieting, coping with stress, anxiety, and other mental stressors. This increases your overall wellbeing and makes you happier.
I recently asked 1,000 people if they’ve felt anxiety about money in the last month. The results show about 71% of people experience anxiety as a result of money.
Granted, we are in the middle of a pandemic. However, I was still surprised by how many people have anxiety over money.
Everything is connected.
Poor mental health makes managing money harder and anxiety about the lack of money leads to worse mental health. This is what the cycle looks like:
I should also emphasize that physical health such as exercise, diet, and proper sleep hygiene leads to improved mental health. Everything is connected. Improving your health wealth comes down to establishing good habits and a balanced lifestyle.
Good habits include eating healthy foods, practicing portion control, limiting sweets, and getting enough sleep.
Lifestyle design includes having an active lifestyle, living a carefree lifestyle, and being optimistic.
Examples Of Health Wealth:
- Exercise Regularly
- Healthy Eating & Portion Control
- Sleep Hygiene
- Living A Stress-Free Life
- Living With Purpose
- Properly Managing Your Thoughts
- Positive Thinking
Lastly, I’ve discussed in detail The Power Of Mindset on my podcast. My guest and I go over how to rewire your brain for financial success and how to handle your financial emotions.
These are the 4 types of wealth and the ways you can achieve them. The goal is to consistently work at improving your life in each type of wealth. Don’t allow society or your job to lure you into only pursuing financial and social wealth. Time and health wealth are equally important.
By working towards improving in all types of wealth, you are setting yourself up for a more fulfilled life. Even small changes to your lifestyle every day can lead to good habits and big results in the long-term.
So start small in each category and you will soon begin to feel the benefits of an overall wealthy life.
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This information is my opinion and is for information purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.