What is wealth to you?
To many people wealth is a big number at the end of many years of saving and investing, and to others it is a yearly or monthly income. To us, wealth is a dollar figure that will allow a person to continue their quality of life to the end of their life. Because a person never knows how long they will live it is important to do one of two things. Either you save up a big number that will get you to an absurd age, or you create enough passive income that you have a comfortable yearly income that you will never exceed.
How Much Wealth Is Enough?
Wealth is a very relative term, and it is important to determine what you believe wealth is. For us, wealth is a number that would allow us to stop working, but there are some out there that can’t bear to think they’ll stop working. For this person they may not necessarily need to save a large number of dollars or have a huge influx of monthly passive income, this person may only need a little bit to supplement what they are making at their job, and that would be enough.
Figure out your wealth goals
But this isn’t everyone’s opinion, and it may not be yours. Many want an expensive retirement, and some people just don’t want that. If you are unsure of what your retirement may cost then you can use a retirement estimation tool such as this one over at Sharebuilder.com. It isn’t an exact science but it will get you into the ball park to see what you are faced with. You may be surprised at how much your “modest” retirement may actually cost!
Passive Income for Wealth Creation
If you have a general understanding of what you need to do but need some ideas of how to do it then we suggest looking into passive income generating methods such as writing online and here is a list of 11 ways to generate passive income online. If you aren’t into writing online then dividend investing may be just the thing you need. It won’t require as much work as writing online, but it will also generally give you a lower rate of return, unless you’re a fantastic investor or a terrible writer.
Our blog is very concerned with passive income as we believe that it is a highly disregarded field in personal finance, until people are finally retired. People are generally urged to get into high growth stocks that payout little to nothing in dividends, and then, as they age, move into the more stable stocks with dividends and bonds. The problem with this is that dividend stocks tend to do just as well as growth over long time periods!
Retirement isn’t an accident, it’s wealth planning
Retirement is an important and momentous part of life for many, but terrifying for others. Many people think they’ll just accidentally fall into retirement without a plan, and this is a dangerous thought. Others want to retire but don’t know how to do it, or where to start. Figure out what wealth means to you, set your goals, and reach those goals. No one will help you reach retirement except yourself, and the time to start is now. What is wealth to you and what are you doing to reach your goals? Let us know with a comment.
