Imagine a circle and in it all the money you will ever have. Hopefully, it's not a small circle. No matter the size of it, someone can still have more than you, and others less. The one thing we all have in common is that we all want our circles of wealth to grow. But, how do we do this? First, we have to understand what makes up the circle of wealth.
What Does the Circle of Wealth Consist Of?
Three types of money form our circle of wealth. They are:
- Accumulated Money
- Lifestyle Money
- Transferred Money
Accumulated money represents the dollars you already have saved and those you are currently holding. To increase the accumulated money, the focus is typically on finding better investments that pay a higher return, often requiring you to assume more risk in the process.
Lifestyle money is what you spend to maintain your standard of living. To increase your wealth through lifestyle money, you may assume you will have to cut back and give up on some luxuries you currently enjoy. Naturally, no one wants this. Unfortunately, the thought of having to give up today to have tomorrow can keep people from taking action.
Transferred money is comprised of money you may be transferring from your circle of wealth, either unknowingly and unnecessarily, through taxes, interest, and non-deductible debt.
Ways to Increase Your Circle of Wealth
There are at least two ways to increase your investment wealth potential:
- Finding better investments that pay higher rates of return than you are currently earning, but that often requires increased risk
- Being more efficient with the dollars you have today.
The circle of wealth helps you:
- Increase your wisdom - It gives you a new perspective on your finances and the effects of your day-to-day financial decisions.
- Expose your weakness - It exposes decisions that you are making that may unnecessarily drain away from your finances.
- Get a direction - By clarifying the impact of your daily financial decisions, it provides you with a focus to change unhealthy financial practices.
- Uncover opportunities - It helps you find new ways to increase your circle of wealth.
We believe that avoiding your losses can often have an equal or even greater impact on your financial future than trying to find the best investments, paying the highest returns. Our goal is to ensure you can maintain your current lifestyle and show you how to avoid unnecessary wealth transfers, how to increase your accumulated money, and reduce your exposure to risky investments.
Conclusion
When we think about financial planning, typically, the first thing that comes to mind is retirement. Our firm specializes in helping individuals develop sound retirement strategies. We educate our clients about financial concepts and products and take the mystery out of investing and preserving wealth.
Ready to get started saving money? Join our 7 Days of Finding Money Challenge and enjoy an extra $1,000 in your pocket by the end of next week.