Issue 2: Infinite Wealth

Issue #2 - October 7, 2009
http://www.financial-freedom-guide.com/

This issue is about setting meaningful financial goals.

Financial Goals

"I want to be a millionaire."

If you ask the typical person on the street about their financial dreams or goals, they are likely to come up with a net asset goal with some such arbitrary number. To me this is not a meaningful goal. It is just a number in a vacuum.

What is my financial goal?

I just want to be infinitely wealthy.

Does that sound wacky to you? It probably does. I am sure being a millionaire sounds like a more reasonable goal than being infinitely wealthy! But let me explain what I mean by that and then perhaps you will want to be infinitely wealthy too.

Wealth Needs a Scale

To understand this concept, we have to go back to the 20th century American architect and genius R. Buckminster Fuller. He realized that wealth, purely as a figure, has no intrinsic scale to it. It is a number and that is all. What do I mean by that?

Cole Porter is one of my favorite American composers. I love his witty lyrics and complex harmonies. He wrote a song called "Who wants to be a millionaire?" for the 1956 movie High Society (which my whole family loves). The song talks about the life of this imaginary millionaire and his possessions: a jet plane, a chauffeur-driven car, a yacht.

Now think about today's millionaires. Do you think they can afford these things with their meager million dollars? They will probably need ten times that amount to own these items today.

Living expenses do keep going up, and as the famous saying goes, "A million bucks ain't what it used to be!"

How Many Months Rich Are You?

So how do you gauge the VALUE of a million bucks - or any other amount of money for that matter? The key is realizing that money is a medium of exchange and its value is in what it buys for you.

Fuller had a brilliant solution. He proposed that we measure wealth (net assets; i.e., total assets minus liabilities) by the number of months of our lifestyle it can support. For example, if my assets are $300,000 and I spend $5,000 per month for my lifestyle, then I am 60 months rich ($300,000 divided by $5,000).

Infinite Wealth

Since my net assets are not being depleted in this process, theoretically I will be able to live off of that portfolio forever! In fact, I think I could reasonably call myself infinitely wealthy if I used Fuller's definition.

And of course the same concept can be extended to the other sources of passive income (rental real estate, online business, network marketing, trading etc.) I explore on Financial Freedom Guide. The key idea is to literally "buy time" by leveraging ALL our assets.

I hope you understand this concept of infinite wealth. It is very powerful, and has the potential to revolutionize your thinking about money and your financial goals. It did for me.

Forming a Mastermind Group

Announcement: Vision Board Workshop

Update on My Progress

• My running average of passive income over the last 3 months is $422.92, of which $422.15 came from dividends - and a whopping $0.77 from my Amazon aStore.
• Our basic living expenses are $6000 per month. We are working on bringing this number down.
• Thus our passive income is 7.05% of our current basic living expenses.