The Difference Between Wealth and a Rich Life

Over the years, my idea of what it means to be truly wealthy has changed a great deal.

As a young man fresh out of college, I equated wealth with a high income - and soon found myself in one of the nation's highest paying professions: money management.

It turned out I had a knack for it. Before long I had the spanking-new lakefront home, the ski boat, the Jaguar XJ-6 and all the other toys. When my friends came over for parties - which were frequent - most of them assumed I was rich.

I was nothing of the sort. Wealth is not the same thing as income. If you earn a lot of money and blow it every year, you're not rich. You're just living high.

My perspective evolved. I recognized that wealth is not about what you earn or spend. It's about the financial assets you accumulate and the debt you avoid (or pay down). Your balance sheet - not your income statement - is the true measure.

Of course, idealists will tell you that money isn't important, that it doesn't really matter. I disagree. Money gives you the freedom to make important choices in your life. No one is truly free who is a slave to his job, his creditors, his circumstances, or his overhead. Money allows you to support worthy causes and help the less fortunate. It allows you to do what you want, where you want, with whom you want. In short, money gives you options.

It has its limitations, as well. Money doesn't buy genuine love or friendship. (In fact, it may bring you just the opposite.) It won't restore your health, fix your marriage, turn you into "a success," or even make you charitable if you're not already charitably inclined.

Money alone doesn't make anyone wealthy. True wealth is a life rich in love, friends, projects and interests.

Like me, you may know high-net-worth individuals whose lives are impoverished. They are so obsessed with competing, winning and having "more" that they have little time for anyone or anything else. Other economically successful people are less obsessive but remain trapped in stressful, hectic lives. They lack something far more precious than money: time.

This is a bit odd when you think about it. Our ancestors just a few generations removed walked or rode a horse to work (where they often performed backbreaking labor). There were no automobiles, airplanes, cell phones, or computers. They couldn't have imagined labor saving developments like dishwashers, microwaves, supermarkets, or the Internet. Yet they still found time for leisure - and would no doubt be mystified by those today who choose to live their lives in a perpetual rush, as if being busy every minute of the day is a sign of success.

If these folks slowed down a little, they might gain a deeper understanding of what is driving them. Is it the intrinsic and monetary rewards of their work? Or is it fear, greed, envy, reputation, status, or some blinkered image of success?

What does it matter how much you make or how prestigious your title is if you spend your days rushing from one appointment to the next, pressured by deadlines and continually interrupting conversations and meals for emails and phone calls? That is not a rich life. Nor is it a terribly attractive image. As an old Chinaman once observed, "man in hurry cannot walk with dignity."

True, we live in a competitive, 24/7 world. We all have responsibilities and obligations. We want to be productive and meet our professional goals. But that's just the point, really. It's a matter of balance - and making a priority of what matters most.

You may know from my other letters that I am a huge fan of Thomas Jefferson. He was a statesman, historian, surveyor, philosopher, scientist, architect, inventor, educator, lawyer, farmer, breeder, manufacturer, botanist, anthropologist, meteorologist, astronomer, paleontologist, linguist, Biblicist, mathematician, geographer, scholar, bibliographer, translator, musician, gastronome and the nation's first great connoisseur of wine. He authored the Declaration of Independence, was Governor of Virginia, served two terms as President of the United States , founded the University of Virginia and much more. Despite his many accomplishments, Jefferson noted near the end of his life, "Nothing really matters except your family and your friends."

Our most precious resource is the short, unknown time we have left on this little blue ball. It is perishable, irreplaceable, and, unlike money, cannot be saved. Americans live, on average, just 28,000 days. That gives us, if we're lucky, roughly 443,000 waking hours. (And most of them may be behind you.) So it behooves us to ask, "Am I using my time well?"

Surveys show that more than half of Americans feel rushed, stressed and pressed for time. How do you regain control? In much the same way we create investment capital...

You've probably heard that to become a disciplined saver you have to "pay yourself first." That means setting aside at least ten percent of your income before you pay the rent, buy the groceries, or hit the mall. If you wait until you've bought everything you want, there is usually little left to save. To avoid this, we pay ourselves first.

Time is similar. If you intend to spend more time on leisure, or with your closest friends and family, or in other high-value activities once you get everything done, that moment remains elusive. Important but less urgent activities take a back seat to urgent but less important ones. So we have to make first things first. (Follow through, of course, is everything.)

In sum, a genuinely rich life is not about income, assets, or possessions. It's about living your life your way.

Money helps. But that is a secondary consideration. How you spend your time is the first.