Enable Your Money to Work for You
Enable your money to work for you and not the other way around.
Roughly 60% of Americans live paycheck to paycheck. According to data from Experian, the average American had a credit debt of $5,910 in the third quarter of 2022. This was at a time where the median household income was $74,580 according to data collected by the Census Bureau. That means credit card debt was about 95% of the median gross monthly income. That’s credit card debt alone! That doesn’t even include housing, utilities, and other necessities.
I believe that money is one of many tools that can assist us in living a fulfilling, happy, and healthy life. However, it also has the power to destroy your life under unfortunate circumstances or due to mismanagement of spending. I think one of the most important things you can do for yourself is to work for your money so that it can one day work for you. I think something that many Americans get wrong is they overspend their money before it has the time to grow and accumulate wealth. The accumulation and preservation of wealth is a crucial step before money can work for you.
Wouldn’t it be amazing if one day you could have $60,000 a year in your toolbelt to help you live a happy and healthy life without needing to work or touch the money you’ve saved? That could be something you can achieve with $1.5 million earning 4% in dividends and/or interest a year. With enough time and savings, this is entirely possible. If you had one dollar to start, you could accumulate $1.5 million in thirty years assuming a 7% annualized growth rate by saving about $1,323.29 a month. If you start earlier and give yourself 40 years to save, putting away $626.14 a month would get you to that goal. You might be thinking that’s a lot to save every month for 30 to 40 years, and you would rather use that now to buy something you want.
I think that living debt free with a healthy nest egg and emergency fund behind me will enable me to be happier with less stress than buying something for myself right now. We have so many different products and experiences around us nowadays that fight for our attention and tell us that they will make our lives better, but I don’t think our ancestors were that much more unhappy with their lives without all these products. Sometimes the sheer number of things fighting for our attention can be detrimental to our happiness and wellbeing, and sometimes it could be a better option to just turn these things off. We need to stop judging others for what they have or don’t have, and we need to stop judging ourselves on what we have or don’t have. If that means getting off social media, turning off the TV, or getting ad blocker, then do it. Help yourself maintain a balanced and healthy lifestyle that will allow you to accumulate wealth that will then ultimately enable you to live a better and more fulfilling life. The amount and how you achieve that will depend on you.
Mental health, physical health, and relational health are all very important to living a fulfilling life. Wealth and finance is a tool that can help you achieve these. A little bit of discipline and motivation can help us keep on track of meeting our financial goals. Come back for more on some of the things I do to help keep myself disciplined and motivated with building wealth and becoming healthier. I would also love to hear about your experiences and learn what you do. If you have any questions or would like to chat, send me a message via my Contact page.