Are You Wealthy?

By Jason Fittler

The GFC has taught us all a lesson on what real wealth is as opposed to perceived wealth. Everyone wants to be rich but very few understand what it means or what the word rich means.

There is, of course the super rich, these are the people who can spend what they like, live how they please and still have plenty of money.  Less than 1% of the population fall into this category, it may seem more as they are frequently in the news. Although most of us would like to part of this 1%, reality is that we never will.

Rich is normally defined based on overall worth. It is a normal assumption that if someone has a lot of money then they earn a lot of money. To some degree this is correct, to be rich you need to have large capital base. How rich you are depends on how you employ this capital base.

You have head of the saying “Work smart not hard” this is true for your assets as well. To truly be rich you must make sure that your capital is working hard for you. It is the income which this capital produces which determines your wealth.

My definition of wealth is being able to live the lifestyle you choose without having to work. To achieve this I need to make sure that my capital (money) is working harder than me.

So again, are you wealthy?

The test is simple, can you stop work today and continue to maintain your current lifestyle. If not then you need to continue to focus on saving, paying down debt and building your nest egg.

Growing and maintaining wealth is not a simple issue. You will need help along the way; all great people have someone providing the right advice and support along the way. Make sure you are getting the right advice; make sure you are focused on the long term.

Below is a table giving you an idea of how much capital you need to produce the income you currently live on.

Now you have a goal, let us help you achieve it.

Income pa

 Capital Needed 

 $    50,000.00

 $                833,333

 $    60,000.00

 $             1,000,000

 $    70,000.00

 $             1,166,667

 $    80,000.00

 $             1,333,333

 $    90,000.00

 $             1,500,000

 $  100,000.00

 $             1,666,667

 $  120,000.00

 $             2,000,000

 $  150,000.00

 $             2,500,000

 $  200,000.00

 $             3,333,333