Wealth is not just about having a full bank account, expensive houses, or hundreds of millions in income. The reality is that money shows its true value when it alleviates financial worries from your life.
Five Stages of Wealth
Financial experts believe that wealth can be observed in 5 different stages; from a point where an individual is only struggling to survive to a time when money gives them freedom and true peace.
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At the lowest level of wealth, the individual's entire focus is on meeting basic needs. Paying rent, bills, buying food, and medical expenses put so much pressure on the individual that there is practically no room left for saving and investing. In this situation, even an unexpected expense like car repairs can derail the individual's entire financial plan. Therefore, the first goal is to create at least minimal financial security.
Creating Financial Security
When income becomes slightly higher than essential expenses, the individual enters a stage where they can set aside money for unforeseen events. Having an emergency fund means that a car breakdown or temporary loss of income does not necessarily lead to a financial crisis. At this stage, money for the first time plays the role of a "buffer" in life.
As income and savings increase, more choices become available to the individual. A person without any financial backing may have to accept any job under any conditions, but having financial reserves allows them to resist an unsuitable work environment and seek to learn new skills.
At higher stages, in addition to income from work, the individual also develops investments. The goal is not for the individual to spend their entire life working more, but to allocate part of their current income to build future financial resources. Ultimately, the highest level of wealth means freedom from anxiety caused by financial issues, where money becomes a tool for buying time and peace.
Therefore, wealth is not just a number seen in a bank account. The ultimate goal of money can be to worry less about money and achieve peace and freedom of decision-making above all else.
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