Previous
When discussing financial success, many people tend to use the terms "rich" and "wealthy" interchangeably.
While being rich is often associated with having a lot of money or material possessions, being wealthy is about having financial abundance that is sustainable over the long term.
Being Rich
Being rich is often associated with having a high net worth, a large income, or significant assets. It's a term used to describe people who have accumulated substantial money or wealth.
However, being rich does not necessarily guarantee financial success. Someone who is rich may have a lot of money, but they may not have the financial stability or security that comes with being wealthy.
Being Wealthy
On the other hand, being wealthy is a more sustainable form of financial success. Wealth is often created through long-term investments, passive income streams, and wise financial planning.
A wealthy person has accumulated enough assets and income-generating investments to provide a steady income stream, allowing them to live comfortably without relying on external factors.
Financial success requires more than just having a lot of money… it is about having financial security AND freedom:
- Financial security means having enough money to cover your basic needs and some comforts.
- Financial freedom is the ability to make choices based on what you truly want rather than being constrained by financial limitations.
The path to financial success requires a good understanding of financial literacy, clearly defined personal values, a long-term perspective, and the ability to establish, and stick to, a strategic plan.
Financial Literacy
Understanding how money works, including managing, investing, and saving it, is critical to achieving financial success.
This knowledge will help you make informed decisions about your finances and enable you to take control of your financial future.
Personal Values
Successful people achieving financial freedom often clearly understand what is most important to them. They know their values and use them as a guide when making financial decisions.
This approach helps them focus on their priorities and avoid impulsive purchases that jeopardise their long-term financial security.
Long Term Perspective
True financial success and wealth isn't built on the back of "get rich quick" philosophies. There is no "magic pill" for financial success; it's a lifestyle, not an overnight fix.
Building wealth takes time. It requires focus, discipline, patience, and long-term commitment.
Strategic Planning
Achieving financial success requires strategies such as creating a budget, investing wisely, and building passive income streams. Again, these are all strategies that require patience and commitment. It is essential to stay focused on your goals and take the necessary steps to achieve them.
While the above factors each play a critical role in your journey to financial success, the secret ingredient lies in defining what financial success and wealth mean to you personally, as someone else's definition of financial success may look very different to yours.
Some ways to achieve this are to:
- Assess your lifestyle - Consider what your ideal lifestyle looks like; where are you, who are you with, what are you doing?
- Define your values – Figure out what is important to you and define your values based on this. Your values can then provide a framework to make decisions based on what is important.
- Set Financial Goals – Be clear on what you want to achieve in life. You can then define your vision further by setting specific financial goals.
If you are ready to start your journey towards achieving financial success, an RS financial advisor can help. They will assess your financial situation, identify your goals, and create a long-term financial plan tailored to your individual needs. With their guidance and support, you can take control of your financial future and achieve the financial security AND freedom you deserve.